Bull market

The bull market has faced it’s first real test

The bull market has faced it’s first real test as we saw $1.9b in liquidations yesterday on a ~10% downward move for BTCUSD. Got a ton of questions on whether to take profit and this was my general answer:

  • Zoom out a bit for perspective; MTD +25%, QTD +70%.
  • Who’s been buying recently? Look at the rallies for names like XRP, ADA, XVG, and etc.
  • Has the big picture narrative changed in any way?

Before the dump, it looked like average joes were going to CMC front-page and buying the “cheapest” names (with no perception of market cap nor of the fundamentals). The problem is that this is the perfect definition of “weak hands”; buying with limited understanding.  We were due for a shakeout and honestly with the liquidations, I’m surprised we stopped at -10%.

With Thanksgiving in play, we can’t be sure the bleeding is over just yet. Would like to see an uptick in OI before making any moves. Eyeing 15,700 for next entry.

During the sell-off, there was also significant damage done on Compound. The platform oracle looks to Coinbase for DAI pricing; and this figure shot up to $1.3 momentarily (from experience, the orderbook is generally thin). Those who borrowed DAI suddenly didn’t have “sufficient” collateral and were liquidated. One wallet suffered a loss of nearly $50m, which hints it may have been a calculated attack.

Exploits much worse than the above example are becoming daily news in the DeFi space. There was no mercy against Pickle’s DAI jar when the attacker drained 99% of funds (worth ~$20m). Issue lies in the code and shows audits are pretty meaningless. So what is 30% APY worth to you when the probability of -100% is non-zero?

In effort to solve this, platforms are coming together (literally). Yearn announced its mergers with Pickle and Cream + an upcoming product, StableCredit. The post hints at integration with AMMs and the obvious partner looks to be Sushiswap. Another candidate would be Andre’s side project, Deriswap, which is like Uniswap but includes derivatives like options and loans.  

今期值得關注嘅新聞總有:

  • OKEX withdrawals are back
  • Interest spikes for Grayscale BCH and LTC products
  • ETH 2.0 deposit contract surpasses target; launch set for Dec 1
  • Coinbase is trending but faces outages
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