TradFi Liquidity Stress Indicator Surges. What Does It Mean for BTC?

The sharp rise in liquidity stress in the traditional finance (TradFi) market is raising concerns about the future of Bitcoin (BTC). Recent signs of tension in the US banking system could negatively impact risky assets, including BTC. On Monday, the overnight borrowing rate for securities-backed loans (SOFR) reached 5.4%, matching a six-year high.

This indicates tightening liquidity and issues with short-term borrowing, similar to those observed in September 2019. However, some analysts believe that the rise in SOFR is temporary and will soon subside. “This is a short-term issue for the market,” notes David Brickell of FRNT Financial. In the long run, the Federal Reserve is likely to resume liquidity injections, which could once again positively impact BTC.

#BTC As mentioned earlier to start entering positions we need to wait for a weekly close as it’s pivotal week 08.07. Waiting 56K to start opening positions with a stop below 55K.

Right now it’s best to refrain from excessive trading and just wait for conclusion to unfold. Closing of this week will show us what’s coming for the upcoming months. The entries are very close. Stay tuned and focused.

https://www.tradingview.com/x/g1Oy2SdE/

Sigma Crypto Chad

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Bybit | BingX | Million Dollar Pattern |

#BTC We are coming to the important support of 51,700-52,600$. Good place to start building position around the support. Finally, Altcoins start getting interesting for spot buys, so depending on the weekly close we will start increasing our altcoin exposure this or next week! Stay focused and don’t make unnecessary trades now.

https://www.tradingview.com/x/txgkxs9J/

Sigma Crypto Chad

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Bybit | BingX | Million Dollar Pattern |

#BTC As long as we remain above 51,300$ nothing critical has happened and the bullish case remains! As noted many times it’s a pivotal week for bitcoin and the beginning of new quarter and half year.

Let’s watch the weekly close, but overall the situation looks like a manipulation in the new quarter and potential extension to new all time highs. Stay focused and wait for weekly close, market might start getting hot soon 🚀

https://www.tradingview.com/x/g4qUmcas/

Sigma Crypto Chad

Some long read for newcomers into crypto

So as I’ve promised for everyone who’s completely new to Crypto here’s an explanation on how does the market works.

Everything mentioned in this post is for educational purposes only, it is NOT any type of advice & I would encourage ya all to still go & DO YOUR OWN RESEARCH.

Let’s get into it… ✍️

Go to CoinMarketCap. Just google it!

For this example we will use the 1st crypto ever - Bitcoin, because why not! 😌🙌

For the start, let’s cover some of the key words, that we are going to use quite a lot:

MC: Market Cap - total capitalisation of the financial asset.

In example with BTC (Bitcoin) it is $1,141B currently

FDV: Fully Diluted Valuation - or in other words Fully Diluted Market Cap.

It means: if the price of the token remains the same, but all the tokens will be in circulation, then that will be a total valuation.

Or in other words - amount of money that have to be in the market for it to be at this price per token.

In example with BTC it’s $1,215B currently.

Which means: for Bitcoin to remain at the same price as now there will have to be $74B of value added to the market.

Total supply - The maximum amount of tokens that will be in existence.

For BTC it’s 21,000,000

Circulating Supply - the amount of tokens in circulation. For BTC it is 19,7M tokens, which is 93% of total supply.

So 100% of FDV - 93% of circulating supply = 7% of the value that has to be added

Which is: $1,215B - $1,141B = $74B

Make sense now?!

Now let’s dive into it a bit more:
You know what’s inflation, right?!

Inflation is when there’s more “tokens” has been added to the market, so for it to sustain the price, there shall be more money pooled into it, or otherwise the tokens will go down in price.

in our regular world “printing” of money will be literally the same thing :)

When “Money” become cheaper.

And then you think that the “price” for products gone up, but actually, the money went down in value instead.

In case with Bitcoin we have limited supply of 21M, 93% of which has been “printed” already.

So the “inflation” won’t hurt Bitcoin much as you can see. that’s what makes it scares :)

Anyways, now let’s talk about Liquidity.
Or as I call it - A Hot Potato Game 🔥🥔

Liquidity is the amount of money that are available in the pool.

The reason Crypto is so volatile, which means it has a lot of movement, big spikes up & down in price. Is because there’s usually a lot of tokens, crazy valuation & not enough liquidity.

So the moment when everyone pulls the liquidity out, you don’t want to be left with “hot potato” 🥔 in the hands.

To see the liquidity you would use Websites such as Dextools for example.

Let’s say the Memecoin has $40M Market Cap (MC), but only $2,6M in liquidity.

Which means if someone will sell $1,3M worth of token, it’s liquidity will go down 50%, which will result in similar thing with the price :)

Because now 98% of all token can be valued only at $1,3M as the other 2% has been sold for the same amount at the market value.

So 98% would be left with the “hot potato” in the hands 🙌🥔🔥

But if someone let’s say will buy the tokens at the open market at the same price, $40M MC & $2,6M liquidity, for let’s say $2,6M worth of liquidity, the MC will likely go to $80M & total liquidity will be $5,2M now.

You follow?!

So less % of liquidity will produce more volatile price action.

Now, important thing.
Holder count - amount of total holders.

The higher the distribution rate & higher the holder count, the less volatile the asset is.

So if there’s 100,000 holders who each controls on average 0,001% of a supply it will take a whole army to move the price.

If there’s also a lot of liquidity available, the price of a token won’t plummet down -80% if even 10,000 of them sell.

Now imagine, Notcoin Airdropped most of its supply to the community. The team also was farming NOT by playing :)

They have 2.45M holders.

And there’s also not just a 10% of liquidity available, but much more!

It’s different…

#BTC Update 📈

📅 Weekly Pivot Close: The weekly pivot close was decent. As noted previously, the final squeeze looked very manipulative.

🔍 Market Insight: Manipulation at the start of a new 6-month period is common in this market, and many indicators are pointing to it.

📈 Outlook: We are expecting higher prices in the near future, potentially even reaching all-time highs.

💡 Altcoins: Starting to look at altcoins as many have reached critical support levels. This could be a great opportunity to enter positions.

Stay tuned for more updates and potential altcoin recommendations!

https://www.tradingview.com/x/tpv8eNbe/

Sigma Crypto Chad

Alts. What to watch on the market right now?

The market is trying to stabilize at current levels. Growth is currently hindered by the hype surrounding the sale of bitcoins by the German government. At Alpha, we are not rushing to work with speculative positions and are considering more long-term deals.

However, I believe it is time to start paying attention and forming a watchlist of alts for future trades.

What to look at?

1. #SOL — blue-chip of the market, the main contender for the next ETF, strong community, most active blockchain.

2. #Taiko — L2 on Ethereum, small capitalization, good technical situation, got listed on Bithumb today, fits the narrative of launching an ETH ETF.

3. #Bonk — meme coin on Solana, has a chance to repeat PEPE's success.

4. #STRK — L2 on Ethereum, competitor to Taiko, but with a larger cap, plus it has an important addition — the asset is under heavy FUD, which increases the chance for future performance.

5. #EDU — CZ will soon be released from prison. Before he was imprisoned, he announced his new product in the "education" sector in partnership with EDU. This asset may front-run his release.

6. #DRIFT — DEX exchange on Solana. The asset is fresh and has weathered market volatility well. We are in accumulation, and if there is movement on Solana, ecosystem mid-cap projects might also perform well.

DYOR 🔫