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We postponed the release of this report, as in typical crypto fashion, the unexpected wrecked everyone's expectations.

We knew volatility, liquidations, and red days were coming this month, as we stated last week:

As of today the market is at 175 days since the Nov '21 all-time high. Meaning next 30-45 days will be nothing short of fascinating to watch.

Days later, Bitcoin dropped nearly 25%, from about $39K to as of today hovering around $30K.

Alt coins drop anywhere from 25% to over 80%.

We expect some negative news to cause a temporary shock to the market. Alt coins will be hit harder than BTC.  

The trophy going to Terra Luna collapsing over 84%, due to its algorithmic stablecoin, UST, losing it peg from $1 to about $0.65.

This event is definitely going in the crypto history books.

The project is certainly being attacked at the peg mechanism.

The rest of the market showed signs of recovery, with many alt coins bouncing up 10%-18% yesterday.

Terra Luna however, continues to be crushed under sell pressure. The lowest it can go is $0.

ETH recovered from its 2016 hack. Sushi recovered from its 2020 rug pull by Chef Nomi. Time will tell if Terra Luna recovers.

The picture lesson of the Terra Luna catastrophe is like inflation, except UST value dropped in real-time. And the panic was in real-time.

Inflation is more of a silent devaluing. 7% here, 18% there.

Similar scenario, different time frames.
One happens over months, the other within hours.

If this is your first 20%+ drop rodeo, pay attention, you're watching market manipulation in real-time. There's no coincidences in crypto.
And no global rules - for now.

We expect regulations to hit stablecoins and exchanges the hardest later this year.

Even with the bloodbath that kicked off on Cinco De Mayo, and the nearly $2B in cumulative liquidations - across most exchanges, the sentiment is still 50%+ long/bullish.

Can't make this up.

https://www.coinglass.com/LongShortRatio

How long this sentiment will last and at what price point will the trend exhaust, is why we shared last week -

The deeper concern we have is that a multi-month downtrend tsunami is imminent after whenever the next run up runs out of fuel.

We're only 10 days into the 30-45 day window of wild swings and volatility.
The end of the month will feel like an eternity away.

Let's dive into what our on-chain metrics signal for the days ahead.

Bitcoin's Trend

Week 19 of 52

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