October 27, 2021

Flushing out the Leverage – Will the Dip Keep Dipping?

Oct 27, 2021

Introduction

What we warned you about yesterday and the days before, has played out today: While everyone got extremely bullish, opened leveraged longs, and bought their favorite altcoins, the risk of an imminent washout was getting higher and higher by the day. Now, we are seeing the result with hundreds of millions of dollars of longs being liquidated in a matter of minutes.

Hsaka @HsakaTrades

Someone got hit hard on ETH on Bitfinex. Liquidated for ~35k ETH ($130m) Cant' remember the last time I saw something of this size get liq'd on finex. Insane.

Ninja @Ninjascalp

New funds joining crypto must realize the cycles of rekting the leverage traders it has and will always be this way no entry is safe $BTC

juthica @juthica

liquidations keep the system from accumulating too much leverage relative to realized volatility a healthy feedback mechanism that does not exist in other markets

Charles Edwards @caprioleio

Basically Bitcoin looks incredible here on most metrics, but leverage traders have gone out of control. We won't get sustainable price rises until that changes.

Benjamin Cowen @intocryptoverse

Feels like #Bitcoin wants to get higher, but longs keep getting wiped out first lol.

Market Outlook

Does today’s dump mean the bull market is over (again) and it’s time to pack your bags? Of course not. Medium and long term, things are still looking positive with no macro top signals insight.

Santiago R Santos | #9159 🦇🔊 @santiagoroel

There's something calming when the market panic sells. Has there been a fundamental change? Let's see: 1. BTC futures ETF is a key approval nod to the industry 2. Web3 apps getting serious traction 3. NFTs leading mainstream adoption Just the ol' over-leverage rinse & repeat

However, be prepared for some more downside before upside in the short term. Especially when everyone is talking about “buying the dip” we oftentimes get another shakeout. Then it’s time to buy!

Will Clemente @WClementeIII

Shakeouts are over when most people no longer think it’s a shakeout

Rekt Capital @rektcapital

#BTC is dipping deeper into the old resistance area in an effort to flip it into a new support area Weekly retest attempt still in progress $BTC #Crypto #Bitcoin

Rekt Capital @rektcapital

Last week, #BTC Weekly Closed above a historical major resistance area (red) This week, $BTC may be dipping towards the same area but this time to turn it into a support Weekly retest may soon be in progress #Crypto #Bitcoin https://t.co/j8yGm7g5bt

The Meme Coin Frenzy Continues

In other price-related news, we get reminded of the jaw-dropping power of memes and retail frenzy… 🐶
It really feels like meme coins have decoupled to a large extent from the rest of the crypto markets with two of the top three performers today being meme coins… Or it’s a precursor for more short-term pain which will put a bigger damper on the whole market – including meme coins.

Blockworks @Blockworks_

Last 24h: #Bitcoin: -5.99% #Ethereum: -3.86% #BNB: - 5.98% #ADA: -8.30% #Solana: -7.56% #XRP: -7.44% #Polkadot: -4.22% #DOGE: -8.62% And then we have #Shiba: +37.46%

Ansem🃏🃏 @blknoiz06

the timing of these meme coin pumps is really throwing me off i cant tell if we're in mania phase or they really have their own cycles now

Ivan on Tech - Moralis Web3 Operating System 👨‍💻 @IvanOnTech

SHIB is soon bigger than Doge 😅 Lesson? Don't be too smart in crypto, too much money is lost on sophisticated analysis - embrace the power of the ape

Ansem🃏🃏 @blknoiz06

shib +30% doge -6%, crypto boomers in disbelief

sassal.eth 🦇🔊🐼 @sassal0x

SHIB has been 1 of the top ETH burners over the last 30 days

Ethereum Altair Upgrade – The Warm-up to the “Merge”.

Without many noticing it (which is arguably a good sign), Ethereum performed another important hard fork today, paving the way towards the “Merge” next year. The Altair hard fork has likely been the last upgrade before the Merge!
Because the Altair upgrade introduced improvements to the Beacon Chain (the new proof-of-stake chain), Altair won’t lead to any frond-end changes for Ethereum users right now.
On a more technical level, the upgrade brought support for light clients, pre-validator inactivity leak accounting, a rise in slashing severity, and clean-ups to validator rewards allowing for simplified stated management. 🤓

terence.eth 🦇🔊 @terencechain

Successful Altair upgrade! 💫 Next stop Merge! 🐼

The First Super Bowl Crypto Ad Is Coming

In the last few years, the idea of seizing one of the biggest marketing opportunities in the world – displaying ads during the Super Bowl which gets watched by almost 100 million people – has been fantasized about many times. It’s no surprise that FTX is the crypto company to finally achieve this major publicity stunt!

Blockworks @Blockworks_

Superbowl ad Tom Brady Miami Heat E-sports league MLB Kevin O'Leary Mercedes-AMG Petronas All in 1 year

Don’t Miss These New Crowdloan Opportunities!

After a short break, Kusama parachain auctions have resumed this week, presenting exciting opportunities to get your hands early on the next possible Polkadot gems. There are two interesting contenders with ongoing crowdloan campaigns: Picasso (which we presented a few days ago) and Bit.Country Pioneer, an ambitious Metaverse project which caught the attention of Acala’s Dan Reecer and got the backing of NFT powerhouse Animoca Brands (never a bad sign!)

Dan Reecer 🅰️🕊⚪️ @danreecer_

Next up for @kusamanetwork parachains is a metaverse chain. Excited to see the team at @BitDotCountry win an auction and begin to launch! https://t.co/TN2h3r5Ilq

Bit.Country Metaverse Portal of Polkadot & Kusama @BitDotCountry

Join our crowdloan on #Kusama and let the ❤️canary's song echo across metaverses. ⚡️https://t.co/uZLcYgLPGd https://t.co/kd4KZ5vyej

Both Picasso and Bit.Country seem to be very solid projects offering token bonuses for anyone participating in their crowdloans. As of right now, Picasso is likely to win the next parachain slot, with Bit.Country following thereafter.

EllioTrades