December 30, 2021
Waiting for December to End
With crypto prices still in limbo and susceptible to erratic price swings due to the super-low volume on exchanges, at this point, most crypto holders are probably longing for the beginning of the new year. Not just can we then put all tax harvesting FUD to rest, but we can focus on the likeliest short-term hopium for crypto: Institutional reaccumulation.
It’s clear, looking at prices hasn’t been particularly pleasurable as of late. While the weakness in crypto prices is pronounced, so far, we haven’t broken the “flush lows” of the last major liquidation event. Thus, patience is key to assessing where we go next.
The current “sketchy” outlook is reinforced by the fact that BTC exchange deposits have been increasing significantly in the last hours. Is that a precursor to more pain or a sign that capitulation is near?
On the bright side, we can still observe rather strong hodling behavior by long-term holders, likely putting a floor under Bitcoin’s price. That doesn’t mean that we have to shoot straight back up (since for that, you also need buying pressure), but at least it should limit downside risk to a degree.
As we mentioned yesterday, our biggest short-term bull case right now is that institutional investors who have been aggressively rebalancing their portfolios in the last few weeks will start reaccumulating crypto with fresh books in the new year.🤞🏻
Deribit Insights @DeribitInsights1) Santa rally fading, BTC Dec31 46k Puts bought, anecdotal rumblings of Tradfi LP allocation audits into EOY, making for a captivating finale as Dec31 Options roll and completely detach into Jan bullishness: Jan7 50-53k Call spread, Jan28 55k Calls + Jan 1x2 Call spreads bought. https://t.co/n0zVf65DMw
One way or another, at this point of the cycle, some real talk for anyone who missed out on the gains in 2021 and wants to “make it” next year is appropriate…
At the same time, crypto rewards the brave more often than not. So with seemingly maximum fear in the markets right now, it’s likely a more opportune time to DCA into the market compared to the euphoric bull run phases in spring and autumn.