The Wolf Den #32 - Bitcoin's Worst Day Ever, Covid-19, Markets And More
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In light of the events of yesterday, I decided to send out another quick newsletter to share all of my thoughts. I know that everyone is in pain at the moment, but there's always a light at the end of the tunnel.First, Bitcoin had it's worst day in history on historic volume - that was the most selling that the asset has seen on a single day since it's inception. Price dropped from $7,900 to $4,600 - over 40%. Insane. Then price continued to drop on today's daily candle, reaching an ultimate low of roughly $3,850. Bitcoin, at that point, had lost over 50% of it's value in just over 24 hours.Then it bounced. HARD. Price rose over 50% from the bottom in a single 12 hour candle - also the the largest 12 hour gain in history, on the largest BUYING volume in history. So what happened?There are a million theories, most completely unsubstantiated. Were whales liquidating their holdings to cover margin calls on legacy assets? Was a single whale exiting the market completely? Were whales using the opportunity of global unease to sell some of their massive supply into a frictionless order book? One of these is likely to have started the process. People always say that whales manipulate the market. This is true, but more accurately, WHALES ARE THE MARKET. Enter Bitmex. Please read my piece on this below. Basically, the Bitmex liquidation engine likely started selling into an empty orderbook, causing the end of the crash. The minute that Bitmex mysteriously went offline, the price reversed. Read below.I have also received a number of calls and tips from people stating that yesterday's price action has forced a number of crypto related projects to liquidate their funds to cover expenses. It is VERY possible that we will be seeing a number of projects go under in the coming weeks and months. This is not FUD, this is just reality. Be mindful when trading alts or trusting your favorite crypto companies that they could be going out of business in the near future. This was the worst case scenario for many of them. A side note before we move on - I know that everyone is hurting right now, both with global events and their portfolios. Yesterday was probably the single worst day for my net worth in history! As you know, I hold about 50% of my crypto portfolio in Bitcoin (the other half was cash until I filled on XTZ and more Bitcoin), and most of my money is in US equities. I am shorting to hedge, but not nearly enough to offset these losses. None of us are immune to the maximum pain being inflected on the market. That said, I am supremely confident that this will all be in the rear view at some point. It may take a while, but markets will rise. Don't do anything STUPID. Remain calm.Side note - I put out 5 newsletters this week, which is not common but something I am willing to do when the situation calls for it. Paid members literally received one every day this week. If you would like to join the paid side, you can do so here: https://www.getrevue.co/profile/TheWolfDen/members. This will give you access to everything that I have ever written. If you cannot use a credit card, please contact me directly to pay with crypto. I would like to offer a special thanks to Voyager for sponsoring both my podcast and the newsletter! More information on them below!Let's dig in.
The Wolf Den #32 - Bitcoin's Worst Day Ever, Covid-19, Markets And More
The Wolf Den #32 - Bitcoin's Worst Day Ever…
The Wolf Den #32 - Bitcoin's Worst Day Ever, Covid-19, Markets And More
In light of the events of yesterday, I decided to send out another quick newsletter to share all of my thoughts. I know that everyone is in pain at the moment, but there's always a light at the end of the tunnel.First, Bitcoin had it's worst day in history on historic volume - that was the most selling that the asset has seen on a single day since it's inception. Price dropped from $7,900 to $4,600 - over 40%. Insane. Then price continued to drop on today's daily candle, reaching an ultimate low of roughly $3,850. Bitcoin, at that point, had lost over 50% of it's value in just over 24 hours.Then it bounced. HARD. Price rose over 50% from the bottom in a single 12 hour candle - also the the largest 12 hour gain in history, on the largest BUYING volume in history. So what happened?There are a million theories, most completely unsubstantiated. Were whales liquidating their holdings to cover margin calls on legacy assets? Was a single whale exiting the market completely? Were whales using the opportunity of global unease to sell some of their massive supply into a frictionless order book? One of these is likely to have started the process. People always say that whales manipulate the market. This is true, but more accurately, WHALES ARE THE MARKET. Enter Bitmex. Please read my piece on this below. Basically, the Bitmex liquidation engine likely started selling into an empty orderbook, causing the end of the crash. The minute that Bitmex mysteriously went offline, the price reversed. Read below.I have also received a number of calls and tips from people stating that yesterday's price action has forced a number of crypto related projects to liquidate their funds to cover expenses. It is VERY possible that we will be seeing a number of projects go under in the coming weeks and months. This is not FUD, this is just reality. Be mindful when trading alts or trusting your favorite crypto companies that they could be going out of business in the near future. This was the worst case scenario for many of them. A side note before we move on - I know that everyone is hurting right now, both with global events and their portfolios. Yesterday was probably the single worst day for my net worth in history! As you know, I hold about 50% of my crypto portfolio in Bitcoin (the other half was cash until I filled on XTZ and more Bitcoin), and most of my money is in US equities. I am shorting to hedge, but not nearly enough to offset these losses. None of us are immune to the maximum pain being inflected on the market. That said, I am supremely confident that this will all be in the rear view at some point. It may take a while, but markets will rise. Don't do anything STUPID. Remain calm.Side note - I put out 5 newsletters this week, which is not common but something I am willing to do when the situation calls for it. Paid members literally received one every day this week. If you would like to join the paid side, you can do so here: https://www.getrevue.co/profile/TheWolfDen/members. This will give you access to everything that I have ever written. If you cannot use a credit card, please contact me directly to pay with crypto. I would like to offer a special thanks to Voyager for sponsoring both my podcast and the newsletter! More information on them below!Let's dig in.