Transcript
A (0:00)
Foreign.
B (0:07)
Welcome back to Consensus live from Consensus Hong Kong. The markets are on edge. Everyone is asking what's next. Joining us to break down the data is Marcus Thielen, founder and CEO of 10X Research, known for his pinpoint accuracy and institutional grade analysis. Marcus is here to tell us if this is just a dip or a deeper trend. Marcus, welcome.
A (0:27)
Yeah, thanks for having me.
B (0:29)
All right, we all have to ask, I mean, the last weeks have been kind of crazy in crypto. Some people were blaming actually this region for some of the, some of the challenge that was going on. What's your take of what's happened over the last couple of weeks?
A (0:41)
Yeah, I mean, of course there's a long story and a short story, right. I think the sort of medium story is that since the summer we have seen a lot of the OG wallets selling, but the ETFs were still buying. And that has really reversed sort of like end of last year. But what also happened is actually a lot of the crypto hedge funds were Underwater really in Q4. And that usually means within a one month to three months lag, you're going to see a lot of redemptions. And of course these hedge funds need to liquidate some positions to kind of, you know, fulfill those redemptions. And that's when we have seen the Coinbase premium. So where Bitcoin trades on Coinbase basically in negative, so in discount really. So we can see a lot of institutional investors worth selling relative to global investors. That was how we really came into like the new year. But then really beginning of this year we expected that the ETFs would start reaccumulating again because investors have new money really to deploy. But that didn't really happen. So ETFs had two days of inflows and then bang, outflows again. And I think that really brought the imbalance really again to the negative side. And then, you know, towards the end of kind of January, we had actually better U.S. economic data. You know, the ISM manufacturing survey came out, you know, about 50, so an expansion for the second time only in the last three years. And that's when people start to reprice actually gross expectations in the US and that means less rate cuts. And when you look, you know, the last two times when the Fed unexpectedly cut, usually in September 2014, 2024 and 2025, Bitcoin had a big push up. But with stronger economic data that means less rate cuts. And then, you know, similar time period, you know, the probability that Kevin Wash would be named as a new Fed chair, you know, really shot up and it was confirmed. But that's when we started to sell off, you know, at the 87,000 level. And the 87,000 level was a very big important level for trend funds. So the trend signal turned negative. And then basically there was a new downtrend in place and what was really, really crucial, and I think a lot of people actually have noticed this, that when Trump was elected in November 2024, Bitcoin ramped up from 70,000 to 90,000 within like 10, 12 days. So there was very little trading activity happening. So there was a big gap, a big liquidity gap. So when bitcoin went to 87,000, it fell into the liquidity trap. And then what happened is that at 75,000, there was a lot of negative option gamma happening. So the market makers needed to hedge themselves and just sell futures and futures and futures with the large, with the last negative gamma hitting at 60,000. So it's almost like, okay, the last market maker is hatched, now we can reverse. So that's what we did. And then our expectation is, and sorry for going on for long. Right. But I think that's what we kind of, you know, go to. We expected kind of Bitcoin stay above 70,000 for around three weeks, but we think we might actually go now lower and take out the low because there's no real buying happening. And usually when you see these cascading liquidations, it's not the end of the downtrend, it's actually the beginning of a downtrend. Because as a trader, you're really naturally long. And when you lose money, it's not that you suddenly say, oh, let me put more money into crypto, it's rather the opposite. I need to find a level to get out. And so that's kind of the scenario where we're in right now.