Market Musings - A Bad Break For Bulls... What's Next?

Welcome to Market Musings, a weekly publication designed to keep our readers informed about the most important and timely developments in the crypto market. We will continually improve this product, so please provide any feedback or suggestions for topics you’d like to see covered in future editions.

Crypto Market Structure Takes A Turn

In the midst of the market wide pullback over the last 2 weeks, the question on people’s minds was simple; ‘is this the bottom?’ This question was also a talking point of our previous edition of market musings, with BTC trading at $58.6K at the time of writing. We noted a few important market dynamics unfolding that may be signs of a local bottom forming for BTC:

1. BTC liquidations finally rolling in → backwardation
2. BTC market structure/positioning reset
3. Altcoin – BTC intraday dispersion

Up until last week, BTC liquidations were mostly absent as the price unwind was rather organized, with altcoins facing the brunt of the price action brutality. This changed as BTC crashed into the $60K range low support region on the back of over $150M in liquidations.

Since then, things have only gotten worse for the bulls with BTC sliding through support and multi month range lows, accompanied by another large wave of liquidations. We’ve even seen the first glimpses of backwardation (perp/futures prices below spot prices).
Total liquidations across the board have continue to spike as well, hitting their highest levels in months as many altcoins have been utterly devastated.

Most sectors are down 20%-50% over the last few weeks, with many names retracing the entirety of their YTD moves so far.

It truly has been an altcoin bloodbath.

And wi