Time To Panic Or Back Up The Truck?
523: Crypto Continues to Dump, Equities are Faltering
Morning and welcome back.
It’s been a pretty tumultuous week across all markets and asset classes.
Crypto might just take the cake, but we are also beginning to see equities, last year’s winners and metals endure some big volatility as we pass the middle of the week.
Yesterday there was virtually no asset class or company that was safe from bloodshed.
Palantir PLTR 0.00%↑ got knee capped.
HOOD 0.00%↑ is down over 30% in the last month.
Bitcoin and Ethereum continue to dump. Cramer is yelling dump it. There were over $700M in liquidations yesterday and over a $1B since the start of the week. Crypto market cap is down almost 20% since the beginning of the year.
Alt coins are cooked.
Software names were in free fall.
Some AI winners are looking a bit weak.
Silver started crashing again (-22% in 2 hours) with gold beginning to dump last night as well.
It’s a free for all everywhere you look and almost nothing seems predictable. Fear is growing that we are entering a bear market in crypto and pullback across the board in equities.
The question is quickly becoming: is it time to panic yet?
We began to cover that question in this weekend’s post (below):
Liquidity is thinning, positioning is getting exposed, people are quitting markets, and weak hands are being forced to make decisions they didn’t think they’d have to make this quickly. This is the phase of the cycle where narratives break, correlations go to one, and risk management starts to matter more than blind conviction.
But kings, moments like this are also where the market starts quietly separating temporary damage from permanent impairment. The difference between panic and opportunity usually isn’t obvious in real time to any of us, it only feels obvious in retrospect when you miss the eventual counter pumps.
So before you slam the sell button or swear off risk entirely, it’s worth slowing down and asking the right question.
Not “is this ugly?” that part is obvious.
The real question is whether this is the beginning of something that is now structurally broken OR the middle of a reset designed to flush out leverage and tourists before the next move.
My gut still tells me it is the latter.
Despite all the chaos and doomer headlines there are some positive developments that could turn the tide this year for risk assets:
We have the Crypto Clarity act that is currently reflecting a 70% chance of passing this year. Odds keep rising on platforms like Polymarket
There is Institutional capital waiting on the sidelines for legal clarity. You have pensions, endowments, and large asset managers that simply can’t deploy size until the rules of the road are explicit
Monetary conditions should continue to skew looser into 2026
Crypto sentiment is at all time lows
President Trump has mid term expectations to manage
Still based on what I am seeing so far this morning, this could end up being one of those wild days that we remember for years to come.
This is one of the wildest periods I have been through in markets. The volatility is enough to snap your neck.
People are convinced it’s over. That we are on the edge of another 2008 style meltdown.
This morning we have no time to waste.
We need to talk through the names and picks I am watching for fire sales, look into WTF is going on in crypto, and then review some thoughts on what is going to happen next.
It is times like these in the market where it’s super important to get a grasp on what might be going on underneath the surface. It’s either the start of a brutal god dump or the ultimate fake out before we go vertical.
What we do in this life echoes in eternity, and if you panic sell you are a coward unworthy of love
— Marcus Aurelius
What Can We Expect For the Rest of 2026?
Markets are starting the year in a far more fragile state than many expected just weeks ago. Bitcoin is trading near $69,000, back in a zone that has historically forced tough decisions as leverage unwinds and conviction gets tested early in the calendar.
At the same time, we have U.S. equities wobbling with the S&P 500 pulling back from recent highs, the Nasdaq showing clear relative weakness, and some leadership beginning to narrow rather than broaden.
When crypto and equities start repricing together this early in the year, it’s rarely just noise.
It usually signals a