Abstraction Capital’s Market Updates provide insights into the crypto market and strategy performance. Please enjoy Market Update #1.
High Time Frame
Bitcoin continues to range near previous cycle’s all time high of $69,000. The post-halving year is historically the best year for Bitcoin returns. The high time frame trend remains up and I see no reason why this should change.
Medium Time Frame
Post ETF hype, Bitcoin has corrected and been tracking global liquidity. Global liquidity has been increasing since April 30th, but is still in a downtrend that could persist for the rest of Q2. I fully expect liquidity to trend upwards heading into the elections end of year.
The yearly VWAP was tested and defended – the 20-week moving average front ran. Stablecoins are being deployed and it appears we could retest the top of the range around $75,000. Until liquidity gains momentum to the upside, though, I believe it will be hard for Bitcoin to fully break out. The summertime chop looks like it is going to continue.
Short Term Developments
It looks like Bitcoin has bounced in the short term and momentum should carry it up to the top of the range. Memecoins got destroyed last week but are bouncing nicely with Bitcoin pushing for $70,000. ONDO and LINK look strong, supporting a potential RWA rotation. This could be due to Chainlink’s recent news with the DTCC: https://www.dtcc.com/dtcc-connection/articles/2024/may/16/smart-nav-pilot-report-bringing-trusted-data-to-the-blockchain-ecosystem.
Cross-Asset Momentum Strategy
The strategy is current long SOL, LINK, IMX, and UNI. It is up over 6% since last Thursday when Bitcoin bounced off $60,000.
