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- 🥜 When in doubt, zoom out
🥜 When in doubt, zoom out
PLUS: US Dumping BTC
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GM to all you crypto nuts. Crypto Nutshell #369 goin’ to work… 🪛 🥜
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What we’ve cooked up for you today…
🏦 US Government selling Bitcoin
📈 When in doubt, zoom out
🤷♂️ Bitcoin capital outflows
💰 And more…
MARKET WATCH ⚖️
Prices as at 6:50am ET
Only the top 20 coins measured by market cap feature in this section
US GOVERNMENT SELLING BTC 🏦
BREAKING: Bitcoin Falls After U.S. Sends $240M Worth of Silk Road-Related BTC to Coinbase
Here comes more selling pressure…
The US government just sent 3,940 Bitcoin to a Coinbase wallet. ($240 million)
Data from Arkham Intelligence confirms that this Bitcoin was linked to a Silk Road vendor:
Did you know that the US government is also one of Bitcoin’s largest holders?
Data from Arkham shows that they own 213,546 Bitcoin. ($13.48 billion)
The timing of this selling from the US government is a little suspicious though…
In the past week, the German government has also been unloading Bitcoin.
Currently they’ve moved over $425 million in Bitcoin to exchanges over the last 7 days.
And according to Arkham, the German government currently holds 45,264 Bitcoin. (there could be more selling coming in the next few days)
So, right now we have:
US government selling Bitcoin
German government selling Bitcoin
Mt. Gox distributions starting in July
Miner capitulation
That’s a whole lot of selling. 😱
And Bitcoin is still hanging on at around ~$61,000. (which is pretty impressive)
Once all of this selling pressure finally ends, it’s only a matter of time before Bitcoin starts to rip up again.
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WHEN IN DOUBT, ZOOM OUT 📈
The recent Bitcoin “crash” had people a little worried…
But sometimes you need to zoom out a little and look how far we’ve come.
That’s the latest message out from Anthony Pompliano.
In his latest interview, Anthony Pompliano put Bitcoin’s recent price action into context.
First things first, Bitcoin is up 46% year-to-date.
And up over 100% in the last year.
Previous bull markets have also seen 4 - 6 drawdowns of 30% or more.
And right now we’re only down ~20% from the all time high.
The bars coming down from the top of the chart below indicate how “deep” cycle corrections have been.
The black area refers to the current Bitcoin cycle.
And as you can see, the corrections we’ve seen so far are nothing compared to prior cycles. (last cycle saw corrections of over -50%)
Things don’t seem that bad when you put it like that…
“What occurs is that when an asset goes up a lot, people start taking profits. So what we’ve seen is this explosive rally to start the year, and people naturally take some of that profit.”
Pompliano then refers to the popular adage “Sell in May and go away”.
Typically stocks trade sideways during the summer months and begin picking up again around Halloween.
That’s exactly what is happening to crypto right now.
Pompliano explains:
“People are seeing these really explosive moves at the beginning of the year and then also Q4 tends to be a big quarter for crypto as well. Q2 into Q3 tends to go sideways and thats what we’re seeing now”
Closing out the interview, Pomp raises the question, “if you have cash, where do you put it?”
His answer?
Obviously - Bitcoin.
“If you still have cash, where else are you going to put it? You could put it into the stock market or you can put it in Bitcoin. But again if you look over a long period of time, what is beating inflation? Naturally Bitcoin ends up being one of the only solutions.”
During times like these it’s always best to zoom out.
Bitcoin is still hovering around ~$61,000…
It’s far from over. 😎
BITCOIN CAPITAL OUTFLOWS? 🤔
Today we’ll be taking at look at short-term holder capital flows.
To do that we’ll be comparing the cost basis of two cohorts:
🟠 Holders with 1-week to 1-month old coins
🔴 Holders with 1 to 3-month old coins
By comparing the cost basis of these two cohorts we can gauge changes in capital flows.
(cost basis refers to the average purchase price of coins within these time frames)
During bull markets, the costs basis of short-term holders tends to increase as new buyers acquire coins at higher and higher prices.
The chart above visually breaks down market momentum.
🟦 Capital Inflows: cost basis of 1w-1m holders is above 1m-3m cost basis - positive momentum in demand 🐂
🟪 Capital Outflows: cost basis of 1w-1m drops below the 1m-3m cost basis - diminishing momentum in demand 🐻
Here’s the main takeaway from this data.
During previous bull markets, negative capital flows (purple area) have occurred up to five times.
And so far this cycle, we’ve seen this happen 4 times already…
The most recent being from May into early June.
So past performance would indicate we’re likely to see negative capital outflows at least one more time this cycle.
What we’re trying to get at here is that recent price action isn’t anything out of the ordinary…
HODL on. 😎
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