Rapid Profit Memes Are Back

Market Report: 13th May 2019 — Subscribe to our newsletter.

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OUR TWO SATOSHIS

The daily view from our desk

Accidents were aplenty in public settings this weekend; first, a conductor plays an adult film over a trains tannoy and then a horror film is shown to unsuspecting children instead of the Pikachu film. In news of a disappointing variety, this woman received a loaf of bread containing just the end crusts. Meanwhile, in Russia, the Navy Seals are learning some new tricks.

RAPID PROFIT MEMES ARE BACK

WHY DID BITCOIN REIGNITED PARABOLIC MEMORIES THIS WEEKEND?

What a weekend! This might well be the best couple of days of 2019. Last Friday, we left you with bitcoin at $6.35k (£4.9k). We analysed the parabolic run so far and the likelihood of its continuation. And so it was. Yesterday, at 8h45 BST, the original cryptoasset reached a new yearly top of $7.5k (£5.8k), climbing 18% in a couple of days, and 36% since the beginning of the week. What happened?

In brief, there was a clear inflow of new money into the cryptosphere that triggered a slow short squeeze once BTC hit $6.4k (£4.9k). Why now? To begin, as the growing trading volume proves, interest in crypto was revived at Christmas and recovered by February — following the 3x to 10x gains some IEOs achieved a couple of days after being listed. This quick profit narrative brought new — or old — retail traders back into this space. At the same time, traditional institutions were confidently decrypting their plans — from Bakkt to Fidelity without forgetting Facebook. Lastly, as we covered last week, the neutral reaction to Bitfinex and Tether’s woes, paired with the lack of dump following the clever hack of Binance, further instilled bulls to finally go long with confidence. Perhaps aided by the use of bitcoin as a hedge to the falling stock market?

BUT REMEMBER THAT WHAT GOES UP FAST ALSO COMES BACK DOWN

IF YOU SURVIVED THE RECENT BEAR MARKET, USE WHAT YOU LEARNED FOR YOUR ADVANTAGE

All this means you don’t need a bull market to make money. May is currently the best month since the last major rally went parabolic in November 2017. But now you must be thinking what’s next. Mr. Chief paints the picture we identify most with. For bitcoin, that is. However, note that even if BTC continues to consolidate above $7k and prints a higher high this view is not validated — as the “falling domino” seen after 2017’s parabolic move perfectly exemplifies.

Additionally, looking back to 2016, bitcoin also experienced a fantastic parabolic break of the bear market. But it then went sideways for seven months while alts joined the crypto carousel, as Horn Hairs shows. However, back then the general public were less aware of digital assets. Even though, as Alex Krüger points out, the recent recovery happened without their involvement — which is very bullish! For tomorrow, look out for how alternative cryptoassets react to Binance finally resuming deposits and withdrawals, and for what BTC does!

WHAT YOU CAN’T MISS TODAY

DON’T LEAVE FOR THE WEEKEND WHAT YOU SHOULD READ TODAY

▪ If you need some respite to the bullish narrative, check Preston Byrne’s post from May 3rd claiming this bull run was coming because Bitfinex is in trouble.
▪ If you need somewhere to spend this weekend’s profits, check the great “Shitcoin Survivors” — 2018 Capitulation Pack. What a wonderful card game!

▪ If you are freaking out about the losses posted by your alt bags, consider Avi Felman’s analysis of Bitcoin’s dominance and how it can trend down sharply.

▪ If you want to make BTC without trading, then you must look for Satoshi’s Treasure — a great marketing ploy by Primitive Ventures, explained by Leigh Cuen.

▪ If you are confused with how the financial markets are pricing Bitcoin, check Chris Burniske’s latest talk — which distils the expectations of crypto investors.

QUOTE OF THE DAY

THE CRYPTO CAROUSEL IS ABOUT TO START

“Reflexivity, a crucial trait of crypto, can be an absolute monster.

We’re experiencing that now. 17.7mm BTC. 58% hasn’t moved in a year and a couple mm of those are lost.

If the world all decides at the same time they need some BTC, there’s not nearly enough to go around.”

• By Travis Kling