LNX

[Jukov @JukovCrypto]

🌐 Some thoughts about "Crypto Culture" and why you should reject it

If you consider yourself a trader, you’ve probably made good profits in the past and have at least some confidence in what you're doing. You’ve likely also experienced the frustration of missing out on a pump because you were too defensive for too long, and (on the flip side) buying too early, catching falling knives, and getting wrecked. It’s all normal and part of the long-term process, but it’s not glamorous to talk about it – even though it’s completely unavoidable, without exception.

But people on Twitter want followers and admiration. At the same time, people want to see their personal biases confirmed and crave a strong leader figure they can trust and rely on (and – at least subconsciously – shift the responsibility for their actions to).

Over time, this has led to Crypto Culture becoming the most toxic and unprofitable environment imaginable:

> You must take extreme risks, regardless of whether you have a solid strategy or not. High risk equates to high confidence and great skill. It's macho, powerful and very sigma, even if the whole world is risk-off.
> You can’t really take profit publicly. This is even truer if you're holding any "conviction bag." -- You held onto $XYZ from $0.01 to $0.42 and now you sell 5%? Clearly, you're a beta male dumping on your followers. A scammer, even.
> Not buying alts right now? HFSP. You’ll stay on the sidelines and miss the entire bull market.
> Asking questions about a bag that the whole group chat holds? Fking fudder, GTFO. What do you mean the team is selling? That’s bullish. We all hold this shitcoin bag – it’s the future of France.

...The list goes on.

The point here is: Not only have we created a toxic and nonsensical culture based on emotions and attention-mechanics, but it’s also the most unprofitable and irrational one you could imagine. If you can’t clear your mind of all this nonsense and put yourself in a position where you can ignore the noise, you’ll never be a consistently profitable trader.

Find your edge, develop your own thesis based on whatever data you choose, and act on it. The moment you rely even slightly on the opinions of others, the likelihood of getting wrecked increases exponentially.

Even though it's not a groundbreaking discovery, this is possible one of the biggest Alpha I've ever shared to be (and stay over long time) a profitable trader.

[Jukov @JukovCrypto]

🌐 Weekly Update / Market Outlook

What a week.

It's crazy to think that the big flash crash was just 6 days ago, once again proving how quickly the market can turn. Looking at it on a weekly basis, the deleveraging event from Monday is barely noticeable, with the major indices even showing slight gains (Nasdaq +0.4%) or closing neutral (S&P500 ±0.0%).

At the beginning of the week, things looked different, and especially the atypical, steep VIX movement was a warning sign that worried many analysts and traders: The VIX shot up past the critical level of ~40 (a historic level indicating a high risk of recession if not retraced quickly) and even spiked to around 65. This is the third-highest level the VIX has ever reached. Understandably, many renowned analysts responded with cautionary words, predicting an extension of the sell-off, as the other two intraday jumps of this magnitude had massive economic implications – the great financial crisis of 2008 and the COVID crash of 2020:

The context was also serious, as recession fears were significantly heightened by macro data, and the Yen carry trade caused panic in the markets, which in turn collided with an already technically challenging market situation (after “bad” Earnings & fears about the “pop” of the AI bubble), where highly allocated trend followers sold off in the generally low-liquidity regime of the summer.

The perfect storm, indeed.

But is this storm really over? The markets—especially Bitcoin—seem to be in the process of staging a classic V-shaped recovery, and the previously mentioned indices also appear to be taking the aftermath in stride. But is the sell-off and its potential aftermath truly over?
Goldman analysts are optimistic here, seeing the carry trade as largely "unwound" already. The trigger was the surprising announcement not only of a rate hike but also the intention to continue as long as the BoJ deems it "necessary." The context is important: the BoJ hasn’t raised rates since 2007 and even cut them when the rest of the world started hiking rates in response to COVID’s inflation wave. A 0.25% hike is very minor and likely manageable for the affected economic units, especially because it wasn’t a surprise. However, the hawkish stance (and the announcement of further hikes) was unexpected, and the market initially reacted dramatically. Immediately after the big dump, the BoJ backpedaled and reassured the market that it places great importance on market stability and would only continue hiking if they are very confident. This was enough to calm the market and possibly prevent a cascading effect.

At the same time, new macro data (including initial jobless claims in the U.S. and the PMI) suggested that a recession might still be averted, and the feared trend-following strategies are likely mostly done with their sell-offs. Additionally, bond buybacks are starting in the U.S., and the blackout period for stock buybacks is over, which could mean up to $8 billion in buybacks per day.
Global liquidity is increasing.

➡️What’s Ahead for Next Week?

The upcoming week brings new macroeconomic data, which the market will undoubtedly try to interpret in the context of recession fears, giving them more weight than usual:

◽️ On Wednesday, we will see the U.S. CPI inflation numbers. The headline is expected to show a decrease from +3.0% to +2.9% year-over-year, although the month-over-month price changes could rise from -0.10% (deflation!) back up to +0.20%. Core inflation is also expected to fall from +3.3% to +3.2% year-over-year, while the monthly data should see a small uptick from +0.10% to +0.20%.

Overall, these are solid numbers. However, it remains to be seen how the market will react to this information. Currently, the futures for the Federal Funds Rate suggest that the likelihood of a rate cut in September is evenly split between a 25-basis-point cut and a 50-basis-point cut. This indicates uncertainty in the market regarding the Fed's future actions.

◽️ In terms of Earnings, Thursday’s reports from Alibaba and Walmart will likely be the most interesting for the broader market. Walmart is generally considered an important indicator of the U.S. consumer's condition, making this report particularly relevant.

➡️What About Crypto?
Bitcoin / $BTC was able to reclaim the crucial $60k level with significant strength. The entire recovery seems to be spot-driven, with open interest being massively flushed, putting us on much stronger footing than in recent months. Combined with inevitably rising liquidity, it should be clear that the medium- to long-term outlook, in my opinion, is extremely bullish. In the short term, however, I don’t believe we’re back in a clearly bullish trend. Rather, we’ve reclaimed the neutral zone. From a technical perspective, I would consider a clear bullish trend to begin at around $63.3k. We are in a very healthy re-accumulation phase, which likely puts the cycle back on track and could even strengthen the eventual breakout.

Altcoins look significantly better than in previous weeks, but they are still far from an alt-season or any general outperformance compared to Bitcoin. However, the price levels of many fundamentally strong projects offer, in my opinion, a very favorable risk-reward ratio from a long-term perspective, so I’m slowly starting to DCA more heavily to accumulate conviction holds. For short-term trades, I currently only see scalps as interesting, a view further supported by the BTC.D & TOTAL3 (Total Crypto Marketcap minus ETH/BTC) charts:

That's it for the week.
Cheers.

[Jukov @JukovCrypto]

🌐Update: Panic in the market -
a small summary for you to make up your own mind

Four weeks ago, the market was still pricing in an 80% probability for a maximum of 3 rate cuts. Today, four weeks later, we are at over 93% for 4 rate cuts (100 bps+) in 2024. To say that nothing drastic has changed would be a lie.

> Let' start with 🐻-Glasses, they are easier to reach right now:

The VIX peaked over 20 today, hit for a second 29 - you see this when big money starts to gets into panic mode… Thats why a good indication of what big money is thinking about the situation can be derived from watching the VIX (here's a post from 2022, explaining what the VIX is (https://t.co/ulxCY0x45S)).
However, we're not quite in recession-territory if we want to compare it to past events: all recent significant recession events have caused the VIX to peak at levels in the 40s:
If on the other hand, the VIX retraces and then stays at low levels, it can be seen as an indicator that CTAs are mostly done with selling off their volatility strategies – so, if you’re looking to buy the dip but don’t want to catch a falling knife, that might be a good indicator to watch on daily timeframes as a signal if the dust has settled/bottomed might be formed.

Simultaneously with todays the VIX pump, the "Sahm Rule" came into effect with Friday's unemployment report, another similar indicator to the inverted yield curve that predicts a recession.

Preceding all this, most megacaps had relatively poor earnings to show. In an important common aspect: their growth sector (AI) performed worse than expected. And although the data was not bad from a rational standpoint, slight negative deviations are enough to upset the huge narrative around AI and the balance between growth miracle and bubble.

At the same time, the Bank of Japan not only raised interest rates but also did not rule out further hikes. This is causing the yen to pump and Japanese stocks (risk market) to dump massively. If this movement continues and Japan steers into "its own 2022," it would certainly negatively affect the rest of the global/US markets as well.

Overall, all signs indicate that a "hard landing"/recession is becoming more likely (or we are already in one).

> Now the 🐮Counterpoints:

On the other hand, it can be argued that most of these signals were recognizable earlier & (especially) simply overridden by the AI hype for the last 8 months, and if this hype reignites, the same could happen again.
Or that the market will now finally get the rate cuts it has been hoping for. 100% for September. After all, it always pumped when the probabilities for faster/more cuts increased. The fact that we are not reacting to this increased probability with a pump right now could also simply depend on the regime (and the fact that trend followers mechanically "finish selling" without paying attention to any macro events/FA). Next week, along with the restart of Stock Buybacks it could very well turn into a Beartrap.

➡️Conclusion/What I think
The truth is: In a week, everyone will know why the market fell (or bounced) and will have the best answers ready. But in the midst of it, it's quiet.

Personally, I am holding long spot BTC and ETH mainly, but overall still positioned relatively defensively and am rather pleased about the big dips in the stock market rn, as I can use them to gain more exposure in ETFs and stocks. At the same time, I see crypto as okayish still. I would describe the situation as "On the Edge." tbh - A little bit deeper, and the lights could go out for a while. But we're not there yet.

It has become more and more difficult to predict the market, thanks to 0DTE and the massively reduced latency. That's why I think TA and charting the most useful tools for such moments. Looking at major indices, they seem to underline my personal positioning/bias as all of them somehow have hit a support and sit "on the edge":

$VTI

$NDX (Nasdaq 100)

$BTC's structure is also still intact - however, I would say it's make or break time.

Keep an eye on the charts and the VIX, and we’ll know where the journey is heading.

Godspeed.

[LNX @rootLNX]

Verifying my Twitter account for my #GalxeID gid:opq9ce7MrtfMrHZM9nGcoP @Galxe

https://t.co/zYCRwoJkNg

[LNX @rootLNX]

@doodlecoineth 0x79751B632155eDB146521859541c4A45E24849e3

[LNX @rootLNX]

@themomocoin ErmEXKzV5PoorwRebLNh8FCEGoQxw435wn6SCDoLYQDf

[Jerome @criptic_jerome]

Mark your calendars and set your alarms!⏰

Join us on April 15th at 3PM EST for an exclusive AMA with experts at the forefront of the AI-powered NFT movement as they share their groundbreaking insights into the future of NFTs 🖼

See you there! 🤖💥 #AI #NFTs #DigitalArt

👀👇

[LNX @rootLNX]

@MIM_Spell @GMX_IO @Uramaki_io Probably nothing....

[LNX @rootLNX]

@lyrafinance @arbitrum @GMX_IO LFG @Uramaki_io

[LNX @rootLNX]

@riskharbor @arbitrum @GMX_IO @mycelium_xyz @StargateFinance @gains_trade LFG @Uramaki_io

[LNX @rootLNX]

@ArbitrumDevs check out @Uramaki_io

[LNX @rootLNX]

@IcedKnife gm @Uramaki_io

[LNX @rootLNX]

@corleonescrypto @LensProtocol @readwise

[ZKsync @zksync]

Baby Alpha is here! We are proud to announce that today we hit our Baby Alpha milestone and have begun the march to Fair Onboarding Alpha and Full Launch Alpha.

https://t.co/8PBC9sRNPS

What we've accomplished and what's ahead 🧵 (1/6)

[ZKsync @zksync]

We’re excited to share, we have:

1) Raised $200M and now have a total of $458M in mission-driven funding
2) Decided to go FULL OPEN SOURCE at our next milestone
3) Reserved ⅔ of a potential future token for the ecosystem
4) Formed a partnership with @OpenZeppelin

👇1/8

[Timeswap ⏳ @TimeswapLabs]

Supernova 11.0 has started so it's your chance to participate in the dawn of permissionless liquidity ☄️

$100-500 worth liquidity -> Mystery keeper 🪐

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$2000+ worth liquidity -> Secret keeper 🌏

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[Timeswap ⏳ @TimeswapLabs]

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[Timeswap ⏳ @TimeswapLabs]

Gm 👨‍🚀

With the FTX debacle at the forefront of CT and billions gone missing, we wanted to share some thoughts around DeFi 🚨

🧵

[Fusion (by IPOR) @ipor_io]

Have a look at IPOR Labs' original research pieces to learn:

🎓 Why is IPOR the heartbeat of #DeFi?
🎓 How is the IPOR AMM pricing swaps?
🎓 What quant models does the Protocol incorporate?

Questions? 👉 https://t.co/vtQCyLLUD6

#IPORresearch
https://t.co/cEkxTmoog1

[Fusion (by IPOR) @ipor_io]

Another major milestone was reached by the #IPOR community! 🥳

On the background of industry-wide uncertainty, we stay calm and #buidl.

#DeFi primitives are here to stay.