Justin d’Anethan

Jan 28, 2021

2 min read

Morning‌‌ ‌‌Update — January ‌‌28th — Macro and Crypto Markets

With disappointed earnings from major tech companies and obvious concerns about valuations, investors, it seems, are starting to doubt the incessant bull run we experienced across assets — and the advertised economic recovery.

Yesterday, the S&P and the Nasdaq both fell 2.5%. The dollar bounced amid the sell-off. This morning, in Asia, S&P e-mini futures continued the move down while the VIX (volatility index) jumped the most since June of last year (surprisingly).

In the past few months, crypto markets moved at a pace of their own but, in the last session, the bearishness permeated — at least momentarily.

BTC had intraday lows down 10% and is closing the day down 6.5%, currently at $30,350.

Alts were rattled by the move and suffered, both in USD terms and relative to BTC. ETH is down 9%. LINK, DOT, LTC, ADA, XMR and most of the other coins followed and fell about as much, down around 9%.

In previous briefings, we talked about the growing inflows to exchanges along with reports of miners selling on the way down from the 40K’s. The resemblance to traditional markets, though, seems to point at a more general risk-off sentiment that might just have been exacerbated by that ongoing selling pressure.

Interestingly enough, futures funding rates, which remained elevated throughout the whole bull run, seem to not only have cooled off, but actually dipped below zero on major exchanges, suggesting a general — and continued — bearish tilt.

While this is happening, I remind you of tomorrow’s massive option expiry, for about 100K worth of Bitcoin, and the max pain level at $28,000… It looks like we might be going for just that level.

On a more bullish note, however, the activity on Coinbase is suggesting that institutional investors are unphased by the downward move and are currently buying large amounts of BTC, probably enjoying the discount.

Let’s see where all that takes us.