Technicals; We take a look at Bitcoin, the total crypto market cap, and how the crypto contagion has effected the market as a whole.
Since FTX filed for bankruptcy on November 11th there has been a growing list of companies that have announced exposure to FTX and Alameda Research. The latest being Genesis Trading who announced they had $175 million locked in an FTX trading account.
Genesis had also lost $1.2B in in bad loans to Three Arrows Capital in May. This hole was plugged by Digital Currency Group (DCG), Genesis’ parent company. Facing another hole, DCG is seeking an emergency loan of $500 million, reduced from $1B and says they could also be facing bankruptcy.
DCG subsidiaries include Genesis Global Trading, Grayscale Investments, Coindesk, Foundry (a bitcoin mining operation), and Luno (a London based cryptocurrency exchange).
Bitcoin continuing the markdown started by FTX saga. One line at around 10.1k may end up being our bottom, the bullish retest that signaled to the world that up only was coming may come full circle.
Two other levels to note on the CME futures chart is two gaps at ~11k and ~9700. It’s DCA season soon and no one should be leveraging up long right now. Let the fud play out, let the news play out.
The bottom will likely last for months. There is no rush to get into position. Tradition is 80-85% correction and given the state of affairs between the Fed and Crypto Contagion, this is getting worse before it gets better.
Total Marketcap Overview Minus $BTC
Total2 (everything except BTC) is also looking equally awful. Our 2018 bear cycle took us down 92% and so far we’ve only done about half of that.
Possible the metric is now broken with the rise of altcoins spread out across more tokens now. Either way, until this chart starts showing some action or tests real support, I would be hands off. Let the news play out. No one is coming to save us in these economic conditions.