Those of us who have known bitcoin at $ 3K after having reached $ 20K, can not say that it sank today at $ 30K. Buying or selling an asset like bitcoin is not about ups or downs, but about your EXPECTATIONS towards its performance over time. The crypto market has been and is a pump & dumps territory, where VCs (Polychain, A47z, A16z, Galaxy Digital, etc.) are at ease riding and dismantling emotions, situations and theories around the asset that best suits them, in fact they are the owners of almost all the most recognized altcoins, and therefore they own big piece of the market.
People like to buy high in value, let’s not deny it and the professional money, smart trader or institutional trader knows that. They know that people are motivated to compare at the highest point, where it has never been trading, therefore pain is a great travel companion for a high percentage of investors in this sector. Bitcoin like gold is not used as a payment currency, its use is speculative especially in the derivatives market, therefore to say that gold or bitcoin are useless as assets is a serious mistake, one thing does not invalidate the other.
If we go into detail, we will find charitable structures similar to those of bitcoin or other cryptocurrencies in other markets and with other assets, the pump and dump is always ready to be consumed. That said, it seems that value and price end up coinciding or at least tend to converge at some point in their relationship. Let us also be aware that many of the shares of technology companies that emerged during the post covid-19 phase will be the next to bear the market correction, as their share prices are 30% above their normal price in a totally illogical way.
Let’s give it time, let’s give serenity and space that it needs to develop, while we can always take advantage of the opportunities that this market offers us every day for the short term. Learn the market from manipulative whales to make uncomfortable decisions, because sooner or later you will have to face them, and it will be better that you already have them in mind together with a plan of execution. When the time is right, bots, news and intuition will do their job ruthlessly to create the perfect environment of mistrust and volatility, changing the way you act and think. Volatility of course helps us to be more profitable, but it has to be managed in the right way.
Whales know how to read and manage the market, they also start to connect markets in a dangerous way with the intention of generating the perfect deception to the small investor. One of the latest techniques and strategies is to strengthen the US dollar to create an effect of even greater fall for both bitcoin and altcoins, giving the feeling of being in free fall and bottomless. Please do not forget that both bitcoin and altcoins trade against USD, not against themselves, which means that a relationship is established through a simple division, where numerator and denominator have a fundamental role, because if the denominator (USD) grow faster than the numerator (bitcoin) the mirror effect is served.
Apart from this effect, on this occasion and unprecedentedly, the whales have caused an algorithmically stable currency to not be as stable as it pretends to be, suggesting that everything has gone out of control, given that UST has a very dispersed liquidity, generating high rewards everywhere, being something very difficult to control (for example USDN suffered it recently), in its favor this stable waves currency did not have a market cap as large as UST, and a large % was in the hands of the Waves team at Vires Finance with no possibility of even taking it out, making a “rescue” easier and less costly, but there was still significant collateral damage.
UST is in wide variety of blockchains generating rewards in LUNA for a lot of Solend type protocols or in multiple DEX, where different pools were being rewarded with LUNA tokens, that in the case of Solend had an APY around 14% of which 11% was in LUNA, now they are giving only 2% due to the devaluation. There is a lot of UST not only in Terra but in other networks, so if the price of LUNA falls, the rewards fall at the same time that the risk in UST increases. This implies that some people stop farming UST and sell it, putting more pressure on the different liquidity pools and on the price of LUNA itself. If we add to this the unlocking period of the staking that has just been activated, in the next 21-24 days we can really see the real drama in LUNA due to the possible massive sales of a token that will already be generating millionaire losses in the sector, in particular to many investors who bought Luna above $50, prisoners of an excessive Fomo created by the same whales that were then going to knock it down and create a now excessive FUD.
No doubt whether it recovers or not, this has touched the reputation and confidence in the algorithmic system to create Stablecoins.
It’s time to review the investment thesis of each one and act accordingly, balancing percentages and market exposure. Accumulate only those projects that you have reviewed and that have not lost an ounce of their fundamentals, working equally well trading at 1 dollar or trading at 50 dollars for your token. Conviction must be your ally and must position you, for example in DOT or AVAX large infrastructures in very advanced stage of construction, it can also position you in CELO or ZILLIQA improved networks with a clear adoption of the retail sector, or position you in SAND or REAL consolidated metaverses with projection towards large alliances with the traditional sector or in layers 2 with ZK ROLLUPS technologies that guarantee parallel paths of work and security to those offered by Ethereum. You also have the option of doing nothing and waiting in protection mode for the storm to pass.
On the other hand, if you believe in Terra and believe that its Luna token will come out even stronger and reinforced from the drama it is suffering, it is the key moment to invest, since the pain that surrounds the market causes volatility and this in turn can help us to be more profitable.
The whales, apart from causing very dangerous domino effects in the market, also cause the investor the prolonged feeling of being in a tremendously irrational market, especially for allowing coins such as Cardano, Doge, Shiba, Tron or Ripple to remain in the top 25. It is true that we are in a more mature market, with new and more sophisticated players who are starting to become aware of hedging their risk positions with options, so asset selection and management become key.
Will there be changes in monetary policies, will cryptocurrencies be considered money being accepted as a means of payment in trade. Is a global economic reset already agreed with a digital currency to absorb the role of the US dollar. I do not know, but everything is possible after spreading a virus around the planet deliberately, to get us at home, indoctrinate us and vaccinate us to continue being a normal citizen, with their rights and freedoms.
Meanwhile, what I do know and what I can say is what I see:
1) Bitcoin continues to draw a quite dangerous bearish scenario, especially for the treasury of many companies such as Microstrategy (which is clearly intentional), dangerous for gamblers masked as traders who are leveraged and are liquidated in a fulminant way day after day in short or long looking for their buck. Personally I like to see the chart I show below, in market moments like this I resort to it hoping to see a clear signal as on May 4, 2020, September 4, 2020, May 21, 2021 or as now on May 9, 2022, where daily candles has confirmed that the institutions has entered, has left the unmistakable mark of being inside. His intentions to me are clear, every time he enters (pink circles) what happens is part of bitcoin price history.
2) Standard & Poor ‘s has assigned a credit risk to the Compound Protocol. This is the first time a rating agency has rated a decentralized protocol.
3) The state of Virginia is investigating the most optimal way to use decentralized finance to manage the pension system.
4)The bank of Spain is preparing crypto regulation, creating new divisions and signing up technology profiles given the increased weight in operations and adoption of cryptocurrencies.
5)MEGA and POLYGON team up to start testing digital collectibles on Instagram, allowing us to display an NFT on our profile. Similar functionality is coming soon to Facebook also adding augmented reality through Spark AR, allowing us to place digital art in physical spaces as well.
6)The first Bitcoin spot ETF is launched in Australia.
7)A16z (Andreessen Horowitz ) is leading the Series A investment round of Irreverent Labs, a tech company developing advanced technology focused on unique software combined with the web 3.0 economy that plans to launch a cockfighting game in the coming months.
8)Dapper Labs presents a USD 725 million fund for the Flow blockchain, seeking to add talent and build innovative projects on its infrastructure and network.
9)Algorand and Hivemind buy Napster with the intention of revolutionizing the music industry, bringing both blockchain and web 3.0 to artists and fans.
Keep your convictions strong and intact, only that will guide you.