Luna Devastation Card
Luna crashed exactly one year ago. Did it even feel like only one year has passed?
Weekly musing: selling off in May.
Bitcoin and ether are down roughly 5% since the last newsletter. BTC even briefly tested $25k, a key level of support, but has bounced a bit. On the daily, these look like healthy retraces but note both can fall more before the recovery continues.
To begin with, given that stocks stayed sideways, it seems the move was fuelled mainly by FUD associated with meme activity, with Bitcoin’s ordinals and Ethereum’s PEPE raising transaction costs and causing delays.
That harms the fundamental value of the network and given the negative funding rates displayed at the time, it is clear that traders betted hard against the leading cryptoassets. But remember such bearish times can also be inflection points.
If this scenario plays out and BTC bounces around $25k next week, then we can continue to climb higher. But note that if this higher timeframe uptrend is broken, then a slower market bleed over summer becomes more plausible.
Still, we can’t forget it’s one year since the definitive collapse of Terra’s UST and Luna. BTC first lost $30k in this cycle then, triggering the current winter we’re hopefully about to leave. And that’s why major players are back accumulating!
Chart art: holding on in May.
Three things: regulating in May.
Glassnode explains what happened with +60% of ETH’s validators this week.
Aleks Gilbert tells the story of the activist battle going over at AragonDAO.
Justin Slaughter explains why the US’s Custody Rule proposal is bad for crypto.