GBTC Discount, BTC's Surging Dominance, & Crypto Hell Week

Chart of The Day: GBTC Discount Hits New Lows

The GBTC discount deepened late last week to a new low of -30.8% on Thursday. The steepening discount reflects waning demand for GBTC as better alternatives emerge, namely exchange-traded funds, which allow redemption and creation to alleviate such dislocations.
GBTC’s price has underperformed bitcoin, returning -42.5%, while bitcoin’s price has fallen by -37.8%.
Separately, GBTC’s parent company, Grayscale Investment LLC launched its first European ETF tracking a basket of digital asset companies rather than the price of a digital asset directly. This comes as the company is still in talks with regulators to convert its bitcoin trust into an ETF.

Bitcoin Dominance Spikes Amidst Price Pullback

Crypto markets tumbled last week, with bitcoin trading as low as $25.3k. Bitcoin dominance spiked amidst the sell-off and is sitting at its highest this year, indicating an even worse time for altcoins.
Bitcoin’s price has closed negative for the 7th week in a row, a new historical record for its price performance.
For more, Delphi Pro members can revisit our video flash update on markets here.

Crypto Hell Week: Crypto Market Update

[Excerpt from a Delphi Insights Report]

Earlier last week, we put out a video flash update on market price action and key levels we were watching as BTC started breaking towards $32K. Delphi Pro members can watch the full video here.
Zooming out, we can see that BTC is now retesting its 200-week EMA (~$26,990), which historically has served as a key area for prior price bottoms. That’s not to say BTC can’t hover below this level for some time, as we saw back in 2015 and more recently in late 2018/early 2019, but it does imply that most of the drawdown is likely behind us.

The latest break below $30K now puts BTC’s price nearly 60% off its all-time high.

But just because BTC has experienced a big drawdown doesn’t mean an immediate reversal is imminent. Looking back at historical instances where BTC’s price dropped more than 55% after putting in a new ATH, its average price performance over the following six months was relatively muted at best.

Piggybacking off of the dynamic support level provided by the 200week EMA illustrated in the previous examples, Bitcoin is also teetering just above long term weekly support areas. The support area currently being tested is the $28K-$30K price range that we have been discussing for several months.
Lurking just below this weekly support range is a Low Volume Void below. Low volume voids are synonymous with low volume nodes that have been prevalent in our previous Market Insights analysis. Should Bitcoin fail to attract enough buyers to stage a relief rally, price will likely be prone to ‘slip’ through these low volume areas before finding footing at the next structural support levels.

Zooming in a bit, we can see Bitcoin’s price action year to date. We have broken then composite profile into two profiles, one for Q1 and the second for Q2. We have seen Bitcoin breakdown from its 2022 price range as relentless spot selling provides little room for relief. Volumes spikes have started to emerge as liquidations begin to stack up.
An interesting observation is that there has been lack of excess at the extreme end of this price move. In other words, instead of very aggressive forced selling resulting in liquidation cascades and ‘candle wicks’, we are seeing measured selling and signs of Bitcoin being accepted at these lower prices. This can be visualized by the high volume node forming below the established 2022 price range.
The absolute best quality entry points are often governed by what is called time opportunity. Said differently, the best opportunities or ‘deals’ in the market are not around for long. The longer we see price build in these areas, further continuation becomes more likely. In the event this happens, look for the following levels.

1. Weekly Structure and Volume Structure Support at $22K-$24K
2. 2017 ATH retests of $19K-$20K

For more, Delphi members can see the full Market Insights here.

Notable Tweets

SCREAM Drained?

Early days but it appears @Screamdotsh has become insolvent; so people can’t withdraw their funds 😬😱

They accept $fUSD as $1 collateral (but it’s off peg); seem to have accidentally set the deposit limit to ♾; millions quickly borrowed against the bad debt… 💰

$FTM $SCREAM

—The Fantom Ecologist 👻 (@ftm_ecologist) May 16, 2022

Reasons You Don’t Enough Ethereum Thread

14 reasons you don’t own enough Ethereum

A thread by🧁…

—Pastry (@PastryEth) May 15, 2022

Luna Foundation Guard Remaining Reserves

8/ As of now, the Foundation’s remaining reserves consist of the following assets:
· 313 $BTC
· 39,914 $BNB
· 1,973,554 $AVAX
· 1,847,079,725 $UST
· 222,713,007 $LUNA (of which 221,021,746 is currently staked with validators)

—LFG | Luna Foundation Guard(@LFG_org) May 16, 2022