Crypto's bloody weekend

www.zerohedge.com

Bitcoin - finally?

Is bitcoin finally breaking out of the boring range that has been in place since mid May? Current weekend px action is not happy. Note the 50 day coming in right at the 32k resistance. The 200 day is way up, pointing sharply lower. First bigger support is down at 24k, while the resistance is the old range with 32k being the big level.

Bitcoin volatility surging

Weekend action in cryptos has seen volatilities move sharply higher. Obviously the biggest move is in the short term maturities. Noteworthy is the move in skew across maturities (chart 2). People are back to paying up for puts on a relative volatility basis. Third chart shows the August and September skew. We continue to find ratio put spreads as interesting downside hedges if you believe in a moderate move lower.

ETH - the new web "connection"

If ETH is the new web or not we leave to you to decide, but is there a connection between "old" and "new" web? As we wrote last week: "...if ETH is to catch up to FDN, things could get "dynamic" again."

ETH volatilities exploding

We are seeing a huge move higher in ETH volatility...and people are paying up for puts in a "desperate" way (see skew).

The inflation connection

It looks like ETH has little to do with inflation expectations. US 10 year break-evens down, ETH down...US 10 year break-evens up, ETH down. Time to abandon the fallacy, or?

Crypto on chain volume

Both down, but ETH is under performing here as well.

I'd rather it just sits there

Digital over physical gold has gone one way only this year. We can't say gold has been overly exciting, but it has definitely provided a better store of wealth than the digital versions YTD. A lot of people are down money in their crypto speculation, and unfortunately they missed the first part of risk management, the stop loss, and are now most probably in buy more in order to get the average price down mode...the strategy that eventually kills your p/l.

Still waiting for the institutional bitcoin investor?

Looks like you will have to wait for much longer. Inflows have remained depressed, and given the weekend px action, we doubt people are desperate to add to assets with surging volatility. After all, most asset managers are trying to figure out how to manage equities (and other asset) volatility.

ALL HODLers should see this

Draw downs suck for a reason. Why? It only takes one big draw down to destroy a good performing portfolio. We have shown our "p/l management" tables before and we will show them again. Go figure how much ETH needs to gain in order to reach the level where it started the year...