As we write this update, Bitcoin is currently trading at ~$44K after recovering from the recent lows near $40K earlier this week. $40-$42K is a critical support line that we’re monitoring, but we currently believe the current risks may be skewed to the upside.
Below are a few key trends I’m watching in the Bitcoin market (as a proxy for broader crypto market health) and some thoughts on the altcoins:
Funding rates have remained largely negative or neutral as price declined, indicating that long traders have finally stopped trying to “buy the dip,” and shorts are paying longs to hold their positions. As Bitocin’s price held the $40k support level, short traders were not being rewarded while their PnL was being eaten by funding fees. In our view, this may establish the conditions for a short squeeze.
Venture funds poured over $30B into crypto startups in 2021, the growth of developers in Web3 has been record-breaking and fundamentals like the number of active wallet addresses and fee transactions continue to surge.
We’re seeing exciting developments within a few of these core holdings like Solana’s ($SOL) booming NFT ecosystem, Terra’s ($LUNA) decentralized stablecoin, and Avalanche ($AVAX) has cemented itself as one of the best EVM (Ethereum virtual machine) compatible blockchains, in our view.
Overall, we remain constructive on the outlook for the crypto market, and at this time we are making no changes to Titan’s Crypto strategy.
As conditions evolve, we’ll be sure to keep you in the loop on our team’s thinking. As always, let us know if you have any questions.
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