🔎When to buy the dip?
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🔎When to buy the dip?
📊 On-chain alpha
😂 Crypto meme of the week
🗞️ The latest DeFi news
🔎When to buy the dip?
Almost every token has been dipping for weeks.
If you have lost a lot of money recently, my advice is to take a few days off from crypto, make a new plan, and avoid revenge trading at all costs.
The goal for now is to just survive and protect the capital you have left.
As long as you don’t lose everything and stay in the game, you’ll get another shot.
With that being said, I’ll start this newsletter issue by trying to answer the following question:
Why does the market keep dipping?
We can all just speculate, but in my opinion, there are 2 primary reasons:
There’s a lot of macro uncertainty - Stocks have also been crashing, and crypto has always been correlated to the stock market.
As crazy as this might sound, I think there’s a good chance that this is deliberately caused by the US government. Why?
Because Trump wants to force the FED Chair to cut interest rates.
By constantly threatening to impose tariffs and making last-minute major changes, the Trump administration is creating a lot of fear in the market.
In this way, they are crashing the markets and pressuring the FED Chair Jerome Powell to cut rates, as he is more likely to lower rates when market conditions are bad.
The bad news is that until either the Trump administration stops doing this or Powell accepts to cut rates, financial markets will continue to suffer.
Especially cypto is negatively affected by this as it’s considered a high-risk asset class.
White House’s first Crypto Summit and the National BTC Reserve didn’t live up to the hype - Don’t get me wrong, the fact that the US established a National Bitcoin Reserve is a big deal and has huge implications in the long run.
But this news has already been priced in, as the first time when Trump said US’s current BTC holdings will be stored in a national reserve was a long time ago.
However, many expected Trump to also announce a concrete strategy that would enable the US government to increase its BTC holdings over time.
This didn’t happen, and that’s why the launch of a US Bitcoin Reserve ended up being a sell-the-news event.
Despite this, I believe the current macro uncertainty is the primary reason for the recent market crash.
So when to buy the dip?
I don’t give financial advice, but the one thing I can do is to tell you what I’m personally doing with my own money.
Before buying the dip heavily, I want to see some of these things happening:
The FED cuts interest rates - This is historically bullish for financial markets, and the Trump administration might also stop creating so much market uncertainty after this finally happens
A new major upcoming crypto catalyst emerges - The biggest market rallies we’ve seen this cycle were fueled by 2 past important events: The launch of the spot Bitcoin ETFs and Trump’s election win
BTC and altcoins start showing strength even when bad news drops - This will indicate that the sellers are running out of coins
Until then, I prefer to use my spare capital for yield and airdrop farming rather than buying the dip. The market has been bleeding for weeks, and I think it’s wise to wait for it to show signs of recovery before buying anything.
I’m highly confident that crypto will eventually make a comeback.
If the collapses of FTX, Three Arrows Capital, and Terra Luna weren’t enough to kill crypto, then I doubt that something else can.
But there are times when it makes sense to take high risks and other times when the best move is to play defense and protect your hard-earned money.
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On-chain Alpha🔎
The total stablecoin market cap hit a new ATH
Crypto Meme😂
The latest developments in DeFi
Michael Saylor’s company is raising $21 billion to buy more BTC
AAVE Labs introduced Project Horizon - a new initiative focused on building institutional DeFi products
VanEck registered for an Avalanche ETF in Delaware
Beraborrow released Auto-Compounding Vaults, which are generating APY rewards of up to 230% on LP pairs such as WBERA-WETH
GMX has officially expanded to Solana
Solana’s proposal to cut SOL inflation by up to 80% has reached quorum
Starknet announced plans to become the first L2 to settle on both Bitcoin & Ethereum
Offchain Labs announced a strategic plan to purchase $ARB tokens
Backed, a tokenization protocol, issued Coinbase's COIN stock on Base
Solv Protocol raised $10 million for its Bitcoin Reserve Offering
Sui Network introduced Passkeys, enabling its users to sign in with biometrics
Fluid has been deployed on Polygon
MegaETH, a highly scalable Ethereum L2, launched its testnet
Movement, a Move-based Ethereum L2, launched its public mainnet beta
Trump ordered the US government to explore pathways to acquire BTC with no taxpayer cost
Velodrome Finance went live on Uniswap’s Unichain L2
That’s all for this week!
Until next time,
The DeFi Investor
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Great post, have some input to go deeper... The FOMC focuses on tracking jobs and inflation, not the markets. In reality, its influence over the market is a side effect rather than a direct objective. This is a crucial insight because the FOMC essentially dictates the crypto market’s trajectory. However, for significant shifts to occur, the market needs a deep crash that forces widespread layoffs. Even Elon Musk is cutting jobs in an attempt to pressure the Fed.