The News From Planet Ruby—Friday, August 25, 2023
The Earth is literally and figuratively on fire. Aside from the actual burning fires, things are heating up in the markets as the apes digest the unexpected implication that "higher for longer" might mean "higher for longer". We suspect a psyop by the Black Rock they venerate as a conduit to their principle deity, the Dollar: A brilliant double-bluff by this cabal at the heart of their priesthood.
Markets Swiftly Rethink
"Higher for longer" has been the mantra from the Fed for months now, but the markets didn't believe them. And why should they, when the Fed has such a poor track record?
This week, though, the message finally filtered through. Perhaps they really mean it. Perhaps the data backs it up.
USD strength has driven stonks and bonds down, causing 10-year US Treasury yields to soar to a 16-year high. Some analysts have expressed concern that China will deliberately weaken its currency further to boost exports (à la 2015), de facto strengthening the dollar and putting downward pressure on risk assets. All of this will, no doubt, be discussed in detail at Jackson Hole over the weekend.
Not wanting to miss out on all the crashing, Russia's Luna-25—the first moon mission for the country in nearly 50 years—"moved into an unpredictable orbit and ceased to exist." India's Chandrayaan-3 spacecraft made the same attempt on Wednesday, successfully achieving the soft landing that will make both the Kremlin and the Federal Reserve jealous.
Bitcoin Loses Support
It was a brutal week for bitcoin. Having consolidated for the better part of two months in the $28-30k range, we were overdue for some serious volatility, and that's exactly what we got. Dollar strength and falling optimism about the odds of a Bitcoin ETF being approved any time soon saw BTC plummet last Thursday to $26,000, and put in a new local low just above $25,000 this Tuesday.
A head-and-shoulders pattern for the entire crypto market cap on the weekly chart points to a potential 25% drop from here. Should BTC lose its next major support at $25k, $20k isn't out of the question. Data from Glassnode suggests that 88% of short-term speculators (those who hold for 155 days or less) are already underwater as a result of the recent crash. This could get really nasty.
#Bitcoin bulls were caught off guard with the largest sell-off in 2023 sending $BTC below $25k
— glassnode (@glassnode) August 21, 2023
A deleveraging in futures markets is the likely catalyst, however a bigger concern may be the 88.3% of Short-Term Holder supply now held in an unrealized loss.https://t.co/Nhr6WkW0CY pic.twitter.com/YqOp4o9nRE
However, it's not all doom and gloom. On-chain metrics suggest that new money is still coming in, and that this could be the kind of pullback that is normal for bitcoin in an early-stage bull market.
Pullbacks = opportunities in bull markets.
— Philip Swift (@PositiveCrypto) August 22, 2023
h/t @cburniske #bitcoin Realized Cap HODL Waves showing that the recent price dip is in the context of a much bigger bull trend.
3-6 month band trending up as new money comes back into the market = new bull cycle. pic.twitter.com/Tq04ROW2x6
ETFs Dominate Developments
Reports from insiders suggest that the SEC is about to approve one or more ETH futures ETFs. This seems a bizarre move from an agency which has had such an unclear approach on ETH in the past, refusing even to say whether it is a commodity or a security.
There has been a warning that Wall Street will muscle out crypto firms whose business model is built solely on access to the asset class. Bitcoin ETFs may render a large percentage of exchanges' revenues obsolete.
On which: A verdict on the Grayscale vs SEC case is expected any day now. Grayscale wants to convert its trust, GBTC, into an spot ETF. The SEC refused its application, prompting Grayscale to pursue its goal in the court.
Aave's decentralized collateralized stablecoin, GHO, continues to trade beneath its peg. It has gained a little over the last 24 hours and is currently changing hands at $0.98, though (like so much else) potentially still on a downward trajectory.
Lastly, a mystery wallet has accumulated $3 billion in BTC, leading to a raft of conspiracy theories on Twitter about BlackRock front-running an ETF decision. Information later surfaced suggesting it belongs to Robinhood.
What's New In The SKALEVERSE?
The Ruby website has been updated. We've added more popular indicators to the Advanced Trade page, so users can employ their favorite tools to inform their trading. The StableSwap page has also now been deprecated. Stablecoin swaps can be made through the main swap interface.
That's all for this week!
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