Historically, when bitcoin is trading hands in that size, it signals some sort of market top or bottom, some significant change in market structure. What we can see is various volume spikes. “This is Coinbase spot volume, being the dominant American exchange, and the Perp volume aggregated over a bunch of different derivatives exchanges. This is a monumental shift in market dynamics and will likely lead to much more stable prices for bitcoin, because less bitcoin will be forced to liquidate in the hyper-speculative shitcoin bubbles. In the past, the most important trading pair for any altcoin was versus BTC, which has changed to being versus a stablecoin like USDT. In other words, the dominant trading pairs and cash deposits on exchanges have changed from bitcoin to stablecoins. Lastly, on the market-cycle timing questions, LeClair points out a very underappreciated market development: the collateral type on exchanges has mostly switched from bitcoin in previous cycles to now being stablecoins like Tether (USDT) and USDC. All in all, there is significant support under the current price and it remains to be seen if there is enough bear momentum to break to new lows. LeClair also adds that the average user cost base was hit by the wick to the recent lows. He points out that the upswing of this cycle did not have the typical parabolic blow-off top we’ve seen previously in bitcoin, as well as there being more technical and fundamental support in the mid- $ 20,000s up to $ 30,000 – so drawdown pressure will also likely be limited. LeClair responds by saying we are in a classic bear market, not necessarily a classic bitcoin bear market. I ask, somewhat facetiously, if we are in a bear market, because we are definitely not in a typical 80-90% drawdown. Market Cycleīefore we get into the awesome charts that LeClair brought, I want to get an idea of where he sees bitcoin in its market cycle timing. Each episode, we discuss current macro events from across the globe, with an emphasis on central banks and currency matters. “Fed Watch” is the macro podcast for Bitcoiners. You can find the slide deck we use for this episode here, or you can see all the charts at the end of this post. Bitcoin Magazine Pro’s “May 2022 Report” is what we are covering for the most part in today’s episode. Each week, he and Sam Rule write near-daily updates for subscribers, and once a month they release a large Bitcoin market report.
In this episode of the “Fed Watch” podcast, Christian and I sit down with Dylan LeClair, head of market research at Bitcoin Magazine Pro.
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