Dgenz Crypto Weekly 056

Fear Meet Floor

We’ve hit that part of the cycle where even your group chat’s loudest bull is suddenly quiet. The memes are gone. The hopium tank’s running on fumes. And the Fear & Greed Index? It’s deep in “oh no” territory.

In fact, we dropped from full-on Greed to Extreme Fear in just a little over a month.

This is the lowest sentiment we’ve seen since the Terra-Luna meltdown back in 2022.
And just like then, it ain’t comfy here. But here’s the silver lining: when you’ve hit rock bottom, there’s nowhere to go but up (unless we find a basement, which… yeah, let’s not).

Now don’t get too excited, we’re not saying all-time highs are next week. Historically though, crypto doesn’t hang around Extreme Fear for more than a month. And we’ve already been here since November 10th, so if history tells us anything then we should only have to endure this bloody mess for another 2-3 weeks. Clock’s ticking.

Need a reminder? In 2021, arguably the wildest bull run ever, we spent three months stuck in Fear territory right before Bitcoin doubled and the market entered up only mode.

So what’s the takeaway?

Yes, this market sucks. Yes, there could still be short-term pain. But we’re near max fear and that’s usually where opportunity knocks (quietly, so it doesn’t spook the bears).

There’s a reason Coinglass marks “Extreme Fear” in green and “Extreme Greed” in red. An it’s the same reason Warren Buffett said: “Be fearful when others are greedy, and greedy when others are fearful.”

When Death Comes Knocking

Bitcoin has triggered a death cross and the first weekly candlestick close below the 50-week moving average, two technical but critical signals that hint at a potential start to Bitcoin’s bear market.

A death cross occurs when the 50-day moving average crosses below the 200-day moving average. The popular bearish indicator suggests that short-term momentum is falling faster than the long-term trend, potentially signalling the start of a bear market.

$BTC is down nearly 14% this past week and now chilling at ~$89K. That’s after dumping below its 50-week moving average, a level that’s basically the market’s long-term heartbeat.

Flatline? Maybe. But there’s context…

While that close is definitely not bullish, it doesn’t always mean we’re diving into a bear cave. Let’s rewind:

• 2020: 2 months under the 50W MA… then BTC said “hold my beer” and 16x’d

• 2021: Closed under it again… then boom: a 2x and new ATHs

• 2022: Yeah, that one was rough. No recovery. Bear mode confirmed.

3 Newsletters That Are Worth Cluttering Your Inbox

We don’t shill often, but when we do, it’s bangers only.

Here are three free crypto newsletters worth your precious email real estate.

Stimulus. Liquidity. Fresh Cash.

So what’s the difference between the good timelines and the doom ones?

In 2020-2021, central banks around the world were basically firehosing money into the economy. Stimmy checks, rate cuts and QE everywhere.

The perfect cocktail for risk assets to send it.

Fast forward to now… and we might be back in that zone soon:

• The US is preparing $2,000 stimulus checks

• Japan is preparing a $110 billion stimulus package

• China has approved a $1.4 trillion stimulus package

• The fed is officially ending QT December 1st

• Canada is restarting its QE program

• Global M2 supply at a record $137T

• 320+ rate cuts globally in past 2 years

So while a close under the 50W MA is spooky, it might just be the pre-game stretch before BTC gets off the bench again.

This could be 2020 vibes in disguise. Or 2022 again. Too early to say. But the macro tailwinds are starting to shift in our favour.

Copium? Maybe.
History repeating? Also maybe.
But in crypto, maybe is often enough.

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