Original | Odaily Planet Daily (@OdailyChina)
Author | Azuma (@azuma_eth)
Another new day, another round of crashes.
OKX market data shows that BTC once fell below 77,000 USDT (lowest to 76,600 USDT), getting closer and closer to the 70,000 mark that BitMEX co-founder Arthur Hayes has been calling for a long time. As of around 9:15 (the same below), it is temporarily reported at 77,451 USDT, a 24-hour drop of 4.46%.
As for Altcoins, the words "heartbreaking" and "bloodbath" that have been overused in the past few days are no longer enough to describe their miserable state. As an old Hodler who has experienced the last bull-bear cycle, I personally feel that the overall sentiment of Altcoins is even worse than when ETH hit $881 in 2022.
ETH hit a low of 1,752 USDT today, and is currently reported at 1,809 USDT, a 24-hour drop of 10.87%;
SOL hit a low of 112 USDT, and is currently reported at 115.85 USDT, a 24-hour drop of 8.49%;
Other Altcoins and on-chain memes need not be mentioned, as most popular Altcoins have hit new historical lows.
Alternative data shows that the Fear & Greed Index is currently at 24, still in the "Extreme Fear" zone.
In terms of derivatives data, Coinglass data shows that over the past 24 hours, the entire network has seen $925 million in liquidations, the vast majority of which were long positions, amounting to $743 million. In terms of currencies, BTC had $311 million in liquidations, and ETH had $239 million.
In addition, the funding rates on major platforms have generally turned negative, indicating that the market as a whole has currently shifted to a bearish stance.
Reasons for the crash: Recession ➡️ US stocks ➡️ Crypto market
As the process of cryptocurrency mainstream adoption progresses, the correlation between the market and US stocks is becoming stronger and stronger - Looking back at the market performance from last night to this morning, the cryptocurrency market has almost started to decline in sync with the US stocks.
US stock market data shows that the Nasdaq index closed down 4%, the S&P 500 index closed down 2.7%, and the Dow Jones index closed down 2.08%; in individual stocks, large tech stocks suffered heavy losses, with Tesla down over 15%, Nvidia down over 5%, Coinbase down over 17.58%, and Roblox down 16.68%.
Looking at the market analysis, mainstream institutions seem to generally attribute the current crash in US stocks to the expectation of an economic recession, and with the escalation of panic, the entire market seems to be shifting from risk assets to safe-haven assets.
Kobeissi Letter also mentioned in its analysis report this morning: "The trade war is just an excuse. The real reason for the market decline is the sudden change in risk appetite. In just a few days, we have gone from extreme greed to extreme fear. This polarization is so extreme that the market has turned completely in the opposite direction."
This shift in tendency is also reflected within the cryptocurrency market.
Defillama data shows that the total supply of stablecoins on the network has reached a new high of $227.11 billion, and at the same time, the scale of stablecoin deposits in the Aave lending market is also at a historical high - Interpreting it positively, this means that there is still ample liquidity in the market; but interpreting it negatively, the trading appetite of the market seems to be extremely low, and the whales seem to be more inclined to "collect rent" and wait and see in DeFi.
How do institutions/big shots predict the future market?
Has the correction ended? What will the future market be like? Although the market is currently full of uncertainties, by combining the predictions of top institutions/big shots on the future market, we may be able to capture some clues for operation.
Arthur Hayes, the co-founder of BitMEX who has been bearish for a long time, posted again this morning, reiterating his prediction that BTC will bottom at around $70,000, and advised retail investors to "buy the dips" aggressively after major central banks turn to loose monetary policy.
You have to have patience! BTC will likely bottom around $70,000. A 36% drop from the all-time high of $110,000 is very normal in a bull market.Then, we need to see the stock market ($SPX and $NDX) go into free fall. After that, the "puppets" of the traditional financial market will also collapse. Then, we will see the Fed, PBOC, ECB and BOJ all start easing policies to revive their respective countries.
Finally, you can go all-in. Traders may try to buy the dips, and if you are risk-averse, you can wait until the central banks start easing before putting in more capital. You may not catch the absolute bottom, but you won't be mentally tortured by prolonged sideways and potential unrealized losses.
Raoul Pal, founder and CEO of RealVision, predicted in X that given that M2 is returning to high levels, this round of correction may be nearing its end.
These growing pains will pass...By Q4 2024, due to a strong dollar and rising rates, cryptocurrencies have been impacted by tightening liquidity. This trend has almost run its course, financial conditions are easing rapidly, and M2 is returning to new highs. This is just a normal correction...
In summary, combining the predictions of several top big shots, this round of correction seems to be entering the latter stage, and the downside space may not be too large... But in such a fragile structure and highly volatile market, please operate cautiously, keep your powder dry, and restrain leverage, as only those who remain on the table have a chance to laugh in the end.
