Theories on the current bloodbath?

[The_Krakenite]

Last night I came home and noticed the crypto markets were crashing down 10%... red across the board. I wasn't surprised, as Tuesday (Canadian markets were closed on Monday) the markets shot up so high and fast that was certain to be leveraged positions.

My theory on Tuesday was that there would be a big upswing regardless, due to the first day of the new year that Canadians could shove their $ into crypto for their TFSA. I'm sure a lot of Americans were doing so with the Roth even though they had a heard-start.

Looks like a lot of liquidations started happening when the deposits stopped and all that leverage back-fired when the steam ran out.

Second night here, I'm still watching the whole red board, and ETH is close to falling into the $2K-3K range... so close to collapsing right this moment.

Any theories on how much worse this one may get?

 

[Concinnity]

Last night I came home and noticed the crypto markets were crashing down 10%... red across the board. I wasn't surprised, as Tuesday (Canadian markets were closed on Monday) the markets shot up so high and fast that was certain to be leveraged positions.

My theory on Tuesday was that there would be a big upswing regardless, due to the first day of the new year that Canadians could shove their $ into crypto for their TFSA. I'm sure a lot of Americans were doing so with the Roth even though they had a heard-start.

Looks like a lot of liquidations started happening when the deposits stopped and all that leverage back-fired when the steam ran out.

Second night here, I'm still watching the whole red board, and ETH is close to falling into the $2K-3K range... so close to collapsing right this moment.

Any theories on how much worse this one may get?

Ideally if you're a bull you have this area 39,600 to 41,000, if bulls are still in control this would typically be a pretty decent probability area we could stabilize and would be looking for a close above 41900 ish on the Daily chart asap. Also, markets moving back up asap, will also likely help and be needed.

If we lose this 39600, next place is around 35200 to stabilize. As always no one knows the future 100% only probabilities, but if we trade below 35200 for too long, the probability of a sharp move down / liquidation goes up dramatically. At that point it's anyone's guess. I mean 27k, 23k, 17k, even 12-15k could come very quickly. 12-15K is where I'd personally be willing to look at a long position. May never happen, but I missed the boat on crypto and currently have no positions.


EDIT: Based on probabilities that I see I am currently bearish on BTC and the equity markets in general. I focus mainly on day trading though and don't just blindly short. I will also take long setups too, just overall leaning bearish. But if BTC starts closing above and regaining levels or the market does, I will adjust my view and trade appropriately, as this doesn't mean we necessarily go down tomorrow, this could take several weeks or even months to develop.

 

[Concinnity]

Last night I came home and noticed the crypto markets were crashing down 10%... red across the board. I wasn't surprised, as Tuesday (Canadian markets were closed on Monday) the markets shot up so high and fast that was certain to be leveraged positions.

My theory on Tuesday was that there would be a big upswing regardless, due to the first day of the new year that Canadians could shove their $ into crypto for their TFSA. I'm sure a lot of Americans were doing so with the Roth even though they had a heard-start.

Looks like a lot of liquidations started happening when the deposits stopped and all that leverage back-fired when the steam ran out.

Second night here, I'm still watching the whole red board, and ETH is close to falling into the $2K-3K range... so close to collapsing right this moment.

Any theories on how much worse this one may get?

Also pull up a BITO Monthly chart (The ETF) for another perspective and look how hard longs are getting squeezed since inception.... So you basically have buyers who bought in really low and comfortable, but equally you have buyers who bought in high and are just at the same level of nervousness that other longs are calm. BITO went from 44.29 to as low as 26.80 now. Virtually thee straight down monthly candles. All those buyers are primed to be forced out if don't start closing above and regaining some levels soon.

 

[maxinger]

Last night I came home and noticed the crypto markets were crashing down 10%... red across the board. I wasn't surprised, as Tuesday (Canadian markets were closed on Monday) the markets shot up so high and fast that was certain to be leveraged positions.

My theory on Tuesday was that there would be a big upswing regardless, due to the first day of the new year that Canadians could shove their $ into crypto for their TFSA. I'm sure a lot of Americans were doing so with the Roth even though they had a heard-start.

Looks like a lot of liquidations started happening when the deposits stopped and all that leverage back-fired when the steam ran out.

Second night here, I'm still watching the whole red board, and ETH is close to falling into the $2K-3K range... so close to collapsing right this moment.

Any theories on how much worse this one may get?

actually, the drop 2 days ago was not much (only 3800 day range),
someone started to call it a bloodbath.
Then many people including you also called it a bloodbath.


on 19 May 2021, the drop was huge ( 13500 day range).

anyway, 2 days ago, BTC moved in tandem with the US market.

 

[Concinnity]

actually, the drop 2 days ago was not much (only 3800 day range),
someone started to call it a bloodbath.
Then many people including you also called it a bloodbath.


on 19 May 2021, the drop was huge ( 13500 day range).

Yeah, but you can't view the market just from one perspective as if you bought at 8k, 15k, or even 20k. Again, pull up a monthly chart of BITO and look at Crypto from the other perspective as well. Tons of trapped buyers going for 44.29 to 26.80. Is it possible they already squeezed enough of weak buyers out? Sure, but until the equity markets recover and we get a decent close again on the Daily chart, the pressure is certainly on a lot of the new longs.

 

[The_Krakenite]

I'm not too terribly worried, left myself a big cushion of excess liquidity under me... just need to hold my margins until my shorted PUTs expire in the next 1.5-3 months out. I'll re-evaluate what to do by then if I'm still ITM. Of course, looks like everything blew right past my strikes on the way down...

https://www.coinglass.com/LiquidationData

Kinda interesting to watch the horror show there. Feel sorry for the guy who just lost over 8 Million in ETH on Bybit right now.

Guess he won't be having a good day tomorrow morning...

 

[Specterx]

Crypto trading is still dominated by gambling and speculation. Now that the liquidity tide is going out, prices will trend lower and dip-buyers will get shredded over and over until either the Fed reverses course, or we reach the point where genuine sponsorship exists from big money rebalancing out of other assets and into BTC/ETH.

Could be a long way down and a long time to wait. After 1980, gold went into a 20-year bear market.

 

[jys78]

Last night I came home and noticed the crypto markets were crashing down 10%... red across the board. I wasn't surprised, as Tuesday (Canadian markets were closed on Monday) the markets shot up so high and fast that was certain to be leveraged positions.

My theory on Tuesday was that there would be a big upswing regardless, due to the first day of the new year that Canadians could shove their $ into crypto for their TFSA. I'm sure a lot of Americans were doing so with the Roth even though they had a heard-start.

Looks like a lot of liquidations started happening when the deposits stopped and all that leverage back-fired when the steam ran out.

Second night here, I'm still watching the whole red board, and ETH is close to falling into the $2K-3K range... so close to collapsing right this moment.

Any theories on how much worse this one may get?

If you think this is a bloodbath, you must be pretty new to crypto.

 

[maxinger]

When there is a bloodbath, there is also great fortune.
And it happens at the same time.

those who longed it would suffer.
those who shorted it would be laughing all the way to the bank.

so,
Theories on the current bloodbath

--->

Theories on the current bloodbath & great fortune

 

[longandshort]

Fed is speeding up its timetable to remove liquidity and raise interest rates. Risk assets, especially long duration stuff like crypto, get whacked during this phase.