Investors relax while Bitcoin blows up
Cryptos have taken a beating this last week
The story of this week is definitely about the price crash in cryptos. After a stratospheric rise during the last 6 months (Ether went up almost 11x, while Bitcoin did a relatively modest 4.6x) we have been seeing a sharp sell off. The chart below shows this wild rollercoaster ride (prices normalized to 100).
The selloff has been vicious. Coinbase estimated that around USD 8 billion of leveraged trades were liquidated last week. Social media feeds were full of horror stories from retail investors who had recently taken leveraged bets on the market .
Investors remained calm
Compared to the ‘crypto carnage’, our investors are quite calm. As mentioned last week there is already a significant slowdown of activity since retracement #3 in late March. That pattern continues.
This might change, but as of the moment, we are not seeing signs of outright panic. In fact we saw a little bit of buying emerge (see chart below). This investor activity is in sync with the price action in the broader equity markets. S&P500 and NASDAQ were more or less flat for the week and Eurostoxx 50 is showing signs of a breakout.
As you can see from the chart
- There is a clear slow down in trading volumes
- There was some selling a few weeks ago, but it is very small compared to the outright panic we saw last year
- We actually saw some buying last week
The buying was predominantly technology and communication stocks
- Cryptos are having a very bad week
- As mentioned previously, investor activity has slowed down significantly, but there are no signs of panic at the moment
- We will continue to monitor the situation as it evolves
Please note that this newsletter is just a data analysis of actual investor behavior and does not constitute investment advice in any form.