We have already discussed in detail the elements that led to a decisive recovery of the entire sector, and in particular Ethereum, in the last few days. From the date of the merger, which is now almost official, and the opposition to attacks, including legal ones, between the pernicious and the ridiculous. But are these really the only elements that allowed Ethereum to confidently rise above $1,500?
Always remember that the main risks come after you take the throne. In our opinion, part of the rebound is certainly due to the fact that we are also seeing in the main stock markets, although the worst is not over yet, i.e. macroeconomic conditions have not changed one iota, and, moreover, we are dealing with rather alarming deadlines that we will have to go through in the coming days and weeks. Well, is everything ready? No, but in order to understand what phase of the market we are in, it would be good to analyze the issue as soberly as possible.
- The lows were clearly affected by the chain catastrophes of Celsius, 3AC, etc.
And at the moment there is practically nothing to discuss. The cryptocurrency market has been behaving like a kind of NASDAQ with leverage for some time, so it was more than reasonable to expect proportionally greater losses than the world’s leading technology exchange.
At the same time, however, the chain liquidation of various positions led to possibly unjustified minimums, among which we can now easily single out the positions of Three Arrows Capital and many other companies directly or indirectly related to this collapse. Liquidation, which has met very little resistance in the market, is already scared by itself.
- The rise of Ethereum (and the entire sector) is also behind the end of bankruptcies
Since the reputation of “Three Arrows” has now been cleared in court, it seems that concerns about the further effect of “infection” by bankruptcy, which would bring other important names to the dock, have also been dispelled.
Of course, yesterday the news came about the termination of the withdrawal of funds for one of the funds managed by Anthony Scaramucci’s SkyBridge. However, there are additional issues that should be discussed before making incorrect and hasty conclusions. The fund in question has a very low percentage of AUM in cryptocurrencies, and most of its assets are in “private” stocks, that is, shares that have not been listed. In such a market situation, it is very difficult to sell and liquidate these shares, and this behavior of the fund is quite normal. There is no risk of bankruptcy, at least not yet, which should bring a sigh of relief.
Is it possible to calm down already? No, but it is in these moments…
One does the best business. This also applies to the world of cryptocurrencies. The fundamental law of financial markets is that risks and opportunities go hand in hand. And this is the time that we are going through — a time of great risk and great uncertainty. Without falling into FOMO, everyone should consider broader prospects.