Recurring market commentary on what's happening in the crypto markets, summarized by the Crypto Broker team at Crypto Finance AG.

Market commentary

Good Morning!

What a day...

Bitcoin BTC (daily)

Let's gather a few facts together about what happened yesterday:

Total amount of liquidations: $9bn
Term structure: We quickly moved from contango to backwardation and back to contango again
Downtime: This applied to most of the largest exchanges and some OTC desks
Chain overload: Mainly Ethereum (ETH)

News: Reuters posted a rather conflicting report saying that China is banning its citizen from holding, trading or transferring cryptocurrencies.

China bans financial, payment institutions from cryptocurrency business
Explainer: What Beijing's new crackdown means for crypto in China

I must admit that I, along with many others, was in the wrong camp, and thought that the leverage before the crash was "normal". Obviously, this was not the case given the nearly $9bn of liquidations over a span of only 24 hours. You can read a good thread from Sam Trabucco (trader at Alameda) here.

The bottom line: We can call this a proper reset.

And the most important thing over the coming weeks will be to observe the market and analyse on what (new) ground (or basis) we will be moving forward on.

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