April Showers Brought Us May Flowers

Market Report: 31st May 2019 — Subscribe to our newsletter.

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OUR TWO SATOSHIS

The daily view from our desk

What were you doing when you were 18? Were you scoring 9 goals against Honduras? Or were you an Instagram influencer, with over 2 million followers, struggling to sell 40 t-shirts. Maybe you spent 6 days worrying about your cat? Or maybe you were dreaming of being an airforce pilot so you could do this in the sky?

APRIL SHOWERS BROUGHT US MAY FLOWERS

BUT THEN THE MARKET FELL JUST 6% IN 24 HOURS

This will be a very interesting weekend. The month ends tonight, and yesterday we anticipated two diverging scenarios for June. Curiously, the past 24 hours offered a very interesting preview to the most bearish of them. As bitcoin climbed for the first time above $9k since it last saw that level one year ago, bears attacked and its price is now down 9%, sitting at $8.2k.

In the cryptic scheme of things, this is still higher than any day last week. Note this was just a natural retrace after appreciating 2.7x since February — 2019’s lowest point. However, the parabola that followed that hyperjump is now more flimsy — meaning few people will feel safe longing at this level. Additionally, as Dave notes, parabolic moves always correct — at least in Bitcoin’s history.

SO, WILL A GOOD LEAK IN JUNE SET ALL IN TUNE?

THE MARKET HAS BEEN PUMPING FOR TWO MONTHS. CAN IT DO IT A THIRD TIME?

To continue, Crypto Medius reminds Bitcoin cycles are getting longer. But this recovery has been very fast — and so it seems unsustainable. Naturally, as Panda notes, this doesn’t mean the bear market will return anytime soon — even if we see a 30% retrace over the coming months. Moreover, to add to the cautious narrative, yesterday’s low-volume move had all the signs of a blow-off top.

But we don’t want you to depart for the weekend in a sad mood. Mike Novogratz — a former Goldman Sachs partner who made $250 million with ETH bought back in 2015 and 2016 — believes BTC “probably consolidates somewhere between $7k and $10k” over the next months”. This would be great for alts. However, before that happens, the monthly close fireworks can evolve into full carnage.

WHAT YOU CAN’T MISS TODAY

DON’T LEAVE FOR THE WEEKEND WHAT YOU SHOULD READ TODAY

▪ The futures market has surprised us with fireworks before. But Skew’s team believes we’ll have a calm transition once May contracts expire at 4pm BST.

▪ The banking industry has surprised us with fireworks before. But The Block’s Isabel Woodford details how LBX — and others -are helping bank crypto firms.

▪ The bearish theses against Ethereum have surprised us with fireworks before. But Multicoin Capital’s Kyle Samani latest take on the dApp platform being “unbundled” is unconvincing — but it’s still a must-read for the weekend!

QUOTE OF THE DAY

IT’S SMART NOT TO BE SMART

“They’re not smart, and they’re not contracts. Let’s all adopt Vitalik Buterin’s suggestion and call them “persistent scripts” from now on. Unless someone has a better name, of course”

• By Dave Birch