Crypto Bloodbath: Analyzing Scimitar Capital's Liquidation and Bullish Reversal Analytics π©Έπ₯
Crypto market is in a bloodbath.
Could @ScimitarCapital liquidation of $2b of alt coins be the beginning of a contagion that is more painful than FTX?
Here I'll present some contrarian metrics, where we could be in for a bullish reversal π§΅
1/ On Friday night, @ScimitarCapital initiated a crypto wide sell off.
But of all days, they chose the most illiquid timings to do this sell off. π€
(If you are wondering, this is a joke, just for laughs here)
Getting to the main crux....
2/ $350m was liquidated due to SEC crackdown on major exchanges for trading securities.
A security is an investment product that is bought or sold with profit expectations but involves some degree of financial risk
i.e. stocks, bonds
3/ But how do you know if tokens are considered securities?
They will have to pass the "Howey Test"
4/ Howey Test says that for tokens to be securities, it has to have:
βͺ Monetary investments
βͺ Profit expectations
βͺ Team having an impact on the organization's value
βͺ Pooling of money from multiple investors for shared profits, losses, and risk
5/ Seems like quite a number of tokens have passed this test, except being common enterprises if they are considered to have a truly decentralized team.
Deep down we know that many of these team could be centralized.
So effectively, many tokens can be considered securities.
6/ Some may argue that tokens can be utility tokens instead.
However, these 19 tokens (possibly) passed the Howey test, hence leading to this lawsuit.
7/ In the lawsuit against Binance, the SEC identified the following tokens as securities:
β’ $ATOM
β’ $BNB
β’ $BUSD
β’ $COTI
β’ $CHZ
β’ $NEAR
β’ $FLOW
β’ $ICP
β’ $VGX
β’ $DASH
β’ $NEXO
β’ $SOL
β’ $ADA
β’ $MATIC
β’ $FIL
β’ $SAND
β’ $MANA
β’ $ALGO
β’ $AXS
There's still turnaround
8/ Metrics that I found shows otherwise and its an opportunity that we can captialize.
Traditionally, SEC have been attacking crypto. Could this time be any different?
I am inclined to think that they are just out there to shake the market and all will be back up again.
9/
TLDR: BUY THE DIP (metrics from @santimentfeed)
πΉSocial
When these discussions drop off, it could be a sign that we're approaching capitulation.
Traditionally, this has been a bullish sign for crypto.
https://twitter.com/santimentfeed/status/1667008482091098112
10/
πΉETH on exchanges
The amount of $ETH available on exchanges is reaching record lows, currently sitting at only 9.47%.
This is a positive sign because it suggests a lower risk of a big sell-off in the future. However, we should also note that...
11/ there is an increase in number of active deposit addresses has recently reached its highest level since March.
Buckle up for we may see a roller coaster weekend for $ETH.
https://twitter.com/santimentfeed/status/1667209538884497408
12/
πΉWhales
Wallets that have a significant amount of USDT aren't selling but are shifting from CEXes to self-custody.
This is reminiscent of a CEX to DEX narrative we saw when the FTX contagion broke out.
Trust is increasingly lost to these CEXes.
https://twitter.com/santimentfeed/status/1666911034467319808
13/
πΉBTC
BTC seems to be gaining interest and increased interaction with the network.
Number of unique addresses actively involved in the BTC network has exceeded one million, since April.
Source: https://twitter.com/arndxt_xo/status/1667569975371137024