Insuring The Ashes
Futures traders went short, and options traders bought tonnes of downside put insurance when the price was $60k. They bought insurance on the ashes, sending an intriguing contrarian signal.
G’day Folks,
As the initial shock value of the $60k sell-off wears off, we can now start building a clearer picture around how investors have responded to it.
The move below $80k was an important one, because it was the event which forced the average Bitcoin holder into the final ‘acceptance’ phase of grief about us being in a bear market.
Three weeks ago, many didn’t even believe we’re in a bear.
This week, they are revising their price targets down to $10k…
Last Monday’s report was titled Capitulation, and I showed how the move below $80k clearly caught a lot of people off guard. The sell-off precipitated the largest capitulation event in history, with investors locking in over $2B in realised losses in a single day.
Now that the dust has settled, the key question shifts to whether the down-move was sufficiently savage that it has truly shaken out all the weak hands on the long side…
…and for bonus points, has it inspired the bears to get too-bearish, creating a contrarian signal for the patient long-term investor.
Become a Premium subscriber to access today’s Video Update (42 mins), Written Article and TL;DR Summary.