Flash Market Update: Back In The 80's

Bitcoin is back in the 80's, a tonne of longs were liquidated (again), and the infamous supply air-pocket between $70k and $81k still stands out like a sore thumb.

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G’day Folks,

Bitcoin has sold back down into the high $80ks, with the bears taking a bunch of leveraged long traders out to the woodshed.

Few things in life are certain, but leveraged Bitcoin longs having their accounts liquidated on every move lower is definitely one of them.

Around $260M worth of leveraged bull energy have just been vaporised as Bitcoin sold off to around $87.8k.

View Chart

Today’s post is a flash market update assessing this sharp move lower, and will focus on the following key topics:

• The role leveraged futures are playing in this move, and whether there is heightened risk of a further downside liquidation cascade.

• Exploring where this sell-off fits into my longer-term base case for the months ahead, and how I am thinking about the supply air-pocket between $70k and $81k.

• Assessing whether we have seen investor behaviour switch from the classic ‘buy-the-dip’ mode seen in bulls, into a preference for ‘selling-the-rip’ we see in historic bears.

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