There have been two meaningful Tweets from two big players in the institutional crypto space about what is happening with Bitfinex. To us, both comments are very telling.
The first came right after the AG announcement from Galaxy Digital’s Mike Novogratz. He said, “GLXY has zero exposure to Bitfinex or Tether. My own sense is that they are less integral to the crypto community than they once were. That said, it’s not a positive thing that has happened. The herd won’t come until we all operate with transparency and professionalism.”
Our rhetorical follow-up question is this: “Who constitutes the herd?”
For us, the “herd” doesn’t mean retail momentum chasers. In this case, we think the herd is institutions that might come in via proposed products like Bakkt. An institution that has not touched crypto to date probably can’t touch it now. They won’t be able to touch it until there’s a perp walk and/or a panic in the crypto market that marks prices down so low they become irresistible.
Next up is a recent comment from Kyle Samani from savvy crypto hedge fund Multicoin Capital. After watching the recent uptick in Bitcoin (BTC), he tweeted, “It appears the market is *rewarding* Bitfinex for lying and defrauding investors. Expect more Crypto businesses to follow Bitfinex’s example. This will not end well.”
That comes from a guy who outperformed during the 2018 bear market and was an early buyer of Binance Coin (BNB).
To drive the point home, if this is what a crypto portfolio manager thinks, what makes anybody think a traditional portfolio manager is going to take a positive stance on crypto? If a PM buys Bitcoin (BTC) now, and it retraces to $3,700 or makes a new low, that PM is fired.
For the chart picture, we offer our version of the Bitcoin (BTC) monthly chart. Bitcoin (BTC) is right at a major monthly resistance point on a Fibonacci speed line analysis (Figure 1). It seems like a lot of buying would be required to push Bitcoin (BTC) through this resistance.
Bottom Line: A bullish counter-argument is that enough bearish sentiment has built up to allow Bitcoin (BTC) to “climb the wall of worry.” That saying refers to a phenomenon where scared buyers pile in one at a time as prices grind higher. We would love to be right about that. As we all wait, we can only hope that a mass selling incident is not in our future.
The Crypto.IQ Trading Desk is so well positioned in this environment it can’t be put into words. They are set up to make a lot of money.
Join me there.