Algorithma Crypto Weekend Musings - Consolidation Post Mid May Mayhem?
Crypto market structure, capital flows, market movers & narrative in crypto land
El Salvador adopting bitcoin has been talk of the crypto and non crypto town.
Negative news still continues to hit with Silvergate terminating all relationships with Binance. Chinese have also dropped crypto influencers from all major platforms aka Baidu and Weibo and arrested 1000+ people related to crypto money laundering - continued FUD out of China. But this hasn’t had that effect what Mid May Mayhem saw. India couldn’t be left behind sending mixed signals - classifying Bitcoin (potentially) as an asset and then slapping a money laundering case against WazirX (details awaited yet)
As for markets, we believe that we are entering a summer of consolidation. The reopening trade is going to be huge and people are going to take a break from trading to spend their riches (stock and crypto alike) on games, beer, Booz and ……..We might see this tight range of 30-45K for a while, and any dips will be good opportunity to load back. price has stayed below the 200DMA for the longest time now and this is not bullish. Take a step back and try to read between the noise - there is no bullish narrative and everyone is nervous about one thing or another (ESG, China, US Regs, Froth etc). If we close next week below $32K, we might enter another extended consolidation period. Smart money and whales continue to build short positions every now and then. And as they say - follow the smart money. Scare tactics all over again. But stay hedged and stay careful. Load on dips, on your favourite coins for long term holds. However, if we close above above the 200DMA - comfortably, and we get one or two good narrative to push (ETF, or another South American country), game is back on and that is why we say, load on dips when you can here.
Market stays directionless as nervousness sets in what statements Biden might make over teh weekend G7 meetings - how CFTC / SEC intend to look at crypto, especially in light of colonial pipeline hacks. This is holding the price down for now. And there is no other bullish narrative either (except Volcanic mining in El Salvador :)).
My personal favourites are BTC ETH SOL MATIC FTT CRV YFI currently. I keep the right without informing you :) …….unless you are a part of Algorithma family :)
On a parting note……