The Market is cowering in fear right now...
And honestly that is the correct response. None of this looks good. Our supply lines are fucked. Politicians are threatening World War Three. Inflation is out of control, and everyone is blaming the Federal Reserve like they know what they are talking about.
Can devs do something?
Yeah okay so now the FED will raise interest rates.
That's going to fix the problem, right?
LOL, it's going to make it worse.
To be fair a recession has been brewing since March 2020, and it's actually super surprising that the powers that be have delayed it this long. But it will be delayed no longer. I think we are basically guaranteed to go into a hardcore worldwide recession within the next 12 months. Crypto, as a risk-on asset, is bound to get absolutely wrecked if and when that happens. So yeah, be afraid, be very very afraid (of being greedy).
Again, it's all about balanced positions.
You wouldn't be upset about the market crashing if you had a ton of dry powder in the keg ready to buy the dips. Whose fault is it that we go all in on crypto and yell things like HODL and DIAMOND HANDS and then get wrecked on the way down while we celebrate and justify our stupid decision? Let's take some responsibility for our actions, shall we?
In any case, yesterday I was testing out MEXC exchange and the utility of longing and shorting the market. I've since closed my short on Hive after like 16 hours. Lost 45 Hive, serves me right. Their interest rates are atrocious, and the market was at the bottom of a minor flash crash. Meh, whatever. I can afford such losses. It only takes one win in crypto to make up for 100 other stupid mistakes. I know from experience; it's just like poker.
Where are the support levels?
2022 Bitcoin Doubling Curve
| Jan | Feb | Mar | April | May | June |
|---|---|---|---|---|---|
| $27733 | $29867 | $32,000 | $34133 | $36267 | $38400 |
| July | Aug | Sept | Oct | Nov | Dec |
|---|---|---|---|---|---|
| $40533 | $42667 | $44800 | $46933 | $49067 | $51200 |
Bitcoin is the ultimate support
As a store of security, we can't go wrong with Bitcoin. This is the problem with a potential recession on the horizon. A recession can be viewed as an attack, not only against super risk-on assets like cryptocurrency, but also to the entire legacy economy itself.
We've already seen what happens when Bitcoin grinds the bottom.
Altcoins will get hammered... hard. In the case of recession this doubling curve will likely hold up, but most altcoins are going to bleed into Bitcoin and take massive losses just like they did in 2018/2019.
Looking at Dominance levels
Bitcoin dominance is only 41% right now. I guarantee if the entire economy get's flushed down the shitter this number could skyrocket to 60% all over again. That's a huge amount of bleed of the alts into Bitcoin. This is why we all need to hold some Bitcoin, to hedge against the inevitable recession on the horizon.
Bitcoin might be boring and there are no more 100x gains on the table to be made, but it is the best network in terms of risk vs reward. A coin that can go x1000 can also lose 99% overnight. Neither of those things can happen to BTC at this point. The risk vs reward for Bitcoin is superior to all other networks. Meaning: the reward is lower, but the risk is even lower than the reduced reward. This is especially as we hover right above the doubling curve at $34k.
But enough about Bitcoin already.
Alts also have some interest support lines:
- Hive has support from 50-80 cents.
- Ethereum has support from $2000-$2500.
- BNB has support from $250-$300.
- RUNE has support from $3.50-$4.
- Monero has support from $125-$150.
- ETC ETC.
So yeah.
Bitcoin might crash 15%, but something like Hive can still crash like 40%. Ethereum can crash 13%-40%. BNB can crash up to 35%. RUNE can crash 50%. Monero can crash 33%. And so on and so forth. This should not be surprising to anyone; it's the way things have always been. It's just been a long long time since crypto has scraped the bottom and stomped on the alts to maintain the doubling curve (rising to 60%+ dominance in the process). It can and likely will happen again during the next impending recession.
But it's not all about the money.
Why do I store six figures in networks that could be equated to penny stocks? Is it because I'm greedy and I think they are going to go x1000? No. I'm simply not a member of the community on any other platform but Hive, and I am heavily motivated to park my value on this network to support it and increase my reputation and status within the community. Money talks and bullshit walks.
Security matters
- I don't trust my phone.
- I don't trust exchanges.
- I don't trust corporations.
- Thus, hardware wallets are also not trustworthy.
Know what I trust more than all of that noise?
Timelocked Hive Power secured by twenty nodes with account recovery activated. I can't leave my life savings on an exchange or my phone or even a hardware wallet. That's crazy. You really trust Trezor corporation or Ledger corporation? Who even are those guys? What kinds of deals have they made with the government? What kinds of backdoors have they installed into the hardware? Seriously though: blind trust is blind.
Best way to short Hive?
Yesterday I was talking about shorting Hive on MEXC. I tested it out and it was a terrible deal. @geekgirl brought up a great point in the comments that the best way to short Hive is obviously to buy HBD. This is definitely something worth mentioning, especially now with 20% interest rates (and 34% yield on the pHBD/USDC pair on polycub).
pHBD/USDC pair literally just moved to 50% yield.
A governance vote on polycub has legit moved the multiplier for yield from 34% to 50% while I was writing this. Very interesting development. We'll see what it's at during the next halving event at the beginning of next month.
So yeah in any case not only does buying HBD boost the underlying value of Hive (by increasing demand to hold the network's debt), but also instead of getting charged out the ass for shorting the market on a centralized exchange, Hive will actually pay you 20% to hold HBD (and polycub will pay you 50% to hold pHBD/USDC). These are some pretty wild developments that haven't even come close to fruition yet.
Summer is still earning season.
I think the market may have overreacted quite a bit to the FEDs actions. People are always trying to price things in before they happen, but this strategy hardly ever actually works. Even with a looming recession on the horizon, May and June can still be great months for crypto and the economy in general. Trying to price in a recession that might come at the end of the year is a fool's errand. Again... buy low, sell high. The market is getting stomped right now. Why would we sell into it?
Hive support 50-80 cents.
Obviously that is a gigantic range. So far 80 cents has been pretty damn consistent, and we only had 2 flash-crashes down to 70 cents during the rough patches. We'd have to bleed quite a while to grind down to 50 cents, but then again that's the entire purpose of DCA. Don't try to time the market, just average out prices and lower the volatility for a free win. A market this volatile doesn't need more volatility with margin trading and the like.
Conclusion
Economic headwinds are here. Bitcoin has almost fully deflated to the doubling curve support. If we get there, I highly suggest you buy some Bitcoin. Not Not Financial advice. At this point Bitcoin can only crash like 15% but it can stomp on the alts really bad and increase its dominance level in the face of a recession. Don't be caught off guard when it happens.
At the end of the day Bitcoin is the best risk vs reward asset in the world by a wide margin. Number just keeps going up, and the downswings are not nearly as bad as the paper-handed cowards on Twitter make it out to be. At this point the only reason to be messing around with altcoins is to financially support the communities you believe in. Stop speculating for x100 gains. If there's any fat to be cut in your portfolios, I suggest you do it now before you feel like you're locked underwater.
On the other side of the coin, summer is coming, and it's been 18 months since our last real bull market, with a solid pattern of 18 months between bull markets. Surely, given these economic headwinds, this potential bull run could be very muted or completely non-existent, but at the same time, how often are the alarmists on crypto Twitter actually correct in their predictions? Betting against the fear/FOMO is almost always a winning play. Pay attention to the fear/greed index.
