Market Dump Thoughts & Weekly Round Up
499: Bitcoin Trades Below $95,000, PLTR interview, Zcash strength
Hope everyone’s Friday got off to a good start. My 3 year old woke up at 4:30am so I ended up sleeping on the floor in his room with a stuffed Giraffe as a pillow while I mindlessly scrolled twitter/x and watched my crypto portfolio nose plummet.
Markets are skittish to say the least and crypto is leading the nose dive lower right now.
Despite news that the US government is re-opening it would appear that there is still a good degree of uncertainty in regards to macro and the health of the US economy.
There are likely a few key factors driving this sell off. For starters, the lack of transparency into US government economic data. The shutdown froze key releases like jobs data and CPI, leaving the entire market flying blind with no real read on growth, inflation, or labor trends. When you strip out that visibility, traders default to caution.
Additionally, crypto has seen a big trend of deleveraging. According to JPMorgan, the latest sell-off was driven less by institutional spot withdrawals and more by “crypto‐native leverage” blowing off. Natives in crypto are getting wrecked and there is some evidence that OG’s in the space are selling or shifting their focus. This leads to widespread panic in addition to sustained sell offs that don’t seem to end.
And on top of all of that you have people shouting that we are going to the see the AI bubble burst and to be fair, there are signs of excess. Valuations are stretched, expectations are euphoric, and the market has priced in perfection across an industry that’s still in its first real cycle.
If there’s one thing markets are good at, it’s convincing you the world is ending right before things turn. Sentiment looks horrific, positioning is scared, and every headline is dripping with doom, but this is exactly what the early stages of a shakeout feel like.
We might look back on this stretch as the moment the weak hands were forced out, leverage was flushed, and the groundwork was laid for a far healthier move higher. The setup doesn’t guarantee a bottom, but it absolutely raises the odds that we’re closer to better days than most people (and the terminally online goons) think.
These were all themes discussed in this week’s post How to Get Rich While our System Unravels which discusses why you should largely ignore the short term noise in markets.
Swiss Block had a great X thread on where I think we stand:
Bringing it all together
Macro sensitivity → regime → BTC risk signal —
is where the true edge lies.
When all three align red, like now, you’re not in a simple “buy the dip” environment.
You’re in a macro-driven fragility window where upside is capped, rallies fail to sustain, and profit-taking dominates.
Importantly, this weakness didn’t start from crypto fundamentals:
• It began with an idiosyncratic crypto shock (Oct 10)
• Then expanded into a broader macro Risk Off regime
• And has been confirmed by rising sensitivity and the risk signal
Zooming out clarifies the entire environment:
The macro-structural cycle remains intact, sensitivity is behaving exactly as it does ahead of transitions, and the risk signal once again fired before the market felt heavy.
Short of it: we are in the storm before the break in the clouds.
I get it. Times like these suck, you check the portfolio it’s down, good news doesn’t do much for price, and things just appear to be bleeding non stop.
Getting bombed on Friday night doesn’t feel as good when you’re down a sports car or new Rolex Daytona on paper.
But we have to power through.
Today we’re quickly going over my thoughts on this recent crypto price action, the fear present in the stock market, defense names/crypto I am focused on accumulating, and some general thoughts on how to make it to the other side in this market.
Let’s get it.
It makes no sense for individual investors to jump in and out of the market. People who trade in that way rarely die rich, whereas the patient investor often does.
Philip Carret