It is hard to believe that it has just been two weeks since the last newsletter. With the Luna stablecoin (UST) blowing up last week and with all what ensued to me it feels like it has been much longer. It has been a pretty wild week for the space.
UST losing its peg has led to a volatile time last week for the crypto market and has been particularly rough for people who where invested Luna and their stablecoin.
Albeit, it should be common sense to not invest the majority of your holdings in these risky projects it unfortunately appears to be the case, that some people have been heavily invested in that project and lost a lot of money. I hope that everyone of you is alright and made it through the last week.
No matter whether you have invested in this project this is a good time to revise your investment strategy and consider whether you are over invested in one asset. The altcoin you may be heavily invested in may be next and you should ask yourself am I okay with losing all of it?
Also bitcoin has shown once again why it is king. While it has been affected by last weeks events most altcoins have suffered much bigger losses.
Don’t be misled by astronomical profit promises and make your decisions with a cool head! And if you don’t want to worry about any of that just go with bitcoin.
In the following I will look at what last weeks events mean for bitcoin in relation to other assets, why fundamentals mater who has and has not been selling amid the high price volatility and provide some remarks on fund flows.
Bitcoin now performing worse than Nasdaq-100 and iShares Expanded Tech-Software Sector ETF
But correlation to other assets still high
Market absorbing 80k BTC selling pressure by Luna Guard Foundation well
Primarily short-term holders sold
Long-term holders unimpressed
Canadian Bitcoin Purpose spot ETF seeing pick up in activity
Bitcoin price correlation and a defence of fundamental analysis
I have already written about this topic in the first issue of the newsletter. Up until the Luna stable coin started to break its dollar peg on May 9 bitcoin’s price has been tracking the Nasdaq-100 and iShares Expanded Tech-Software Sector ETF (IGV) very closely and has not been performing worse than these two indices.
The fact that this year bitcoin up until the stablecoin by the Luna Guard Foundation has blown up has not been performing worse than these two indices is something I would not have expected. In particular considering the fact that bitcoin’s price usually is more volatile to the up- and the downside.
At the same time on-chain analysis and analysts claiming that the fundamentals are strengthening have come under criticism and many may be asking why this is not reflected in the price of bitcoin. While we have not seen bitcoin’s price reach new all-time highs or trading as bullish as on-chain data may suggest to my mind on-chain fundamentals might have prevented bigger drawdowns this year.