this probably started today, not that AI won't do well at all but a clear vibe shift if we see this dispersion continue for a few sessions

at the minimum, the performance difference confirms where consensus is overweight (AI) vs. underweight (memes)

candle was bc job openings and ism data came in better than expected - "economy's doing better than we thougt, NUKE EVERYTHING" lol. On a real note tho its just the interest rate game again - pricing in more probability of higher for longer and pricing out probability for out more cuts. Either outcome isnt a big deal imo, but the big vol associated with the fx / rate swings is what creates the shakiness intra-day. This also somewhat confirms something i was thinking lately - that people have been levering up through the carry trade again over the last quarter or so. It's probably y things like crypto majors and semi's are once again rly sensitive to these big intra-day swings in dollar/rates

look at the correlation between btc/nvda and then the the dispersion micron's showing - if u were adding back on the carry trade to long crypto and semi's again, youre probably adding to nvda first at these prices before u move out the curve onto something like micron (i.e. micron isnt as sensitive to the shapr moves in dollar/rates bc models arent overwiehgt)

we just need fx and rate volatility to cool off then things will settle down a bit. I'm not sure if the data today is enough for big continuation on the vol side - doesnt mean i think majors / semi's ramp to turbo up only mode, just thinking that the aggressive sell will chill out and majors will base out and relax a bit --- for where most of us play (onchain) this is all we need

whats funny about CT and macro is that while Marco’s important, also plenty of ways to not rly need it at all and focus on "what u own" (just know the v big picture & keep in the back of ur head vs. hyperfocused on the details [most on CT - not all don’t @ me - are usually doing their analysis on macro as it pertains to price wrong anyways]).

There are coins that every smack down in the mkt it draws down to a Higher Low and every rip in the mkt it makes a Higher High even while the majors are in a range. Identifying those vs. googling what rrp is would to most on ct a favor

found this interesting - https://x.com/2Based_6900/status/1885766405196283906

what i've been thinking. We're at the crossroads now. Time to make a prayer circle

ya, nvm. ETH is actually ass, worst technology ever created

axiom is actually pretty good (not ashamed) - https://axiom.trade/@bgc

Seeing a lot of ppl flip bearish now that sol and btc dropped, but weren't bearish while on chain was getting gaped for over a month straight.

I think denominating in sol is very one sided at this point and a lot of the crowd that just flipped bearish are the same ppl that capitulated into sol later in 2024 when it was around these prices, meaning most of them round tripped or are underwater now. I can imagine that clouds their judgment and is why they're flipping bearish now vs being bullish just a few days ago before the drop in btc sol and some alts

The other Cohort that's been bearish onchain are mostly CEX participants that capitulated to participating here since alt/major volatility has been tame overall and almost no alts besides Sol and some dinos like XRP and HBAR did anything the entire cycle so far. This cohort are onchain tourists for the most part and chase momentum. Not that trend/momentum is a bad style, but its A Single style, not the end all be all. They're not good at asset selection during the consolidation / accumulation phase nor do they claim to be. If you're an onchain player trying to identify opportunities to accumulate this is also the last type of person you should be listening to if you're operating on timeframes longer than a few weeks. Especially don't pay attention to their opinion on memecoins when most of them can't differentiate something like SPX6900 from Libra. They play the trend game, not the asset selection game which are two different approaches to to the market

The other Cohort that's bearish, particularly on memecoins are mostly midcurvers - nothing rly to say here, its not even that they hate memecoins they just hate on whatever makes people money bc they can't make money. Easy to identify this crowd, most are still stuck thinking TIA is will ramp to ath soon. They also fell for AI and bought Zerebro at 700m thinking the binance listing was bullish. The other big claim they make is more coins = bad. Anyone actually participating understands 90% of these coins have a life cycle that's 1hr or less before going to 0, they're not diluting or creating dispersion in liquidity.
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Onchain gets mini liquidity cycles w/in the broader macro cycle and comes in waves. After each wave you get large drawdowns and consolidation, this is by design. You need the majority of assets to get wiped and liquidity to consolidate into quality, the market essentially votes for what resides in this basket. The first major wave was in 2023 on eth. During that wave there were 49 coins on my watchlist. From that wave there are barely 10 now. These 10 or so survivors of the first wave on eth have made macro higher highs within each consecutive wave that's come while the others are essentially sitting at 0. I don't doubt a lot of sol onchain is about to go through this same type of cleanse throughout a consolidation period which is a net-benefit longer term. One area i could see a lot of ppl may get burned is assuming low caps = higher return, it does not - also particularly talking about native sol coins here, esp ones that have been through multiple waves on sol (mark 90% of cat coins to 0, there will be like 1-3 max, if that). At this point in the cycle an asset has a higher mkt cap/valuation bc more liquidity has voted for it to. It's also where liquidity will flow first. There are outliers ofc, but you have to be good at identifying the few

I remain bullish, I do not think this cycle is over. Are we potentially going to go through consolidation coming out of this last wave? 100% possible but that doesn't equate to a cycle end. Long periods of nothingness are common, esp since i don't think volume will ramp meaningfully on pf anytime soon because of the recent events. Its a good time to hunt/identify assets to accumulate on sale, but selection is important. To think this cycle is over is to claim this time is different with the collective alt market not making a new high. Ofc this time could be different, but hard to make that base assumption

also wild how it just "knifed" vs. being more gradual

Yep, risk was to the upside.

observing

thinking out loud

leaning top 2 vs. bottom case

idt we get the bottom case unless a new shock blindsides the mkt. Tariffs as is prob wont do it, most of that shock's been likely been absorbed. Most of the move was unwinding positioning from funds, esp foreign funds. They were all long the same stuff that comprises >30% of the index. Deepseek (for nvda, 8% of Q's) + Trump Policy blindsided ppl & made the growth scare come early. For now all incremental data has calmed ppl (growth can be an issue later but its not one now).

no matter what angle u choose to approach why we experienced the drawdown at that speed, all signs point to the action driving things down was unwinding overcrowded positioning. breadth throughout the drawdown was good, Risks r still here but if theres no big new shock, i think markets should calm for a bit (we'll have a better view after aprl 2)

there's more that can be said but that's the tldr

thread of interesting charts/data points - https://x.com/BlueLightCapit1/status/1902721495933071767