Ew, it's getting ugly - Market Update - 2-26-25

Performance Dashboard, Volatility, Correlations

*|MC_PREVIEW_TEXT|* Hello my tasty friends, please find our mid-week update below. Well that got ugly quickly. We went from tagging 99k on Friday, down to 89k as I write this, marking the third time since November that we've pulled back by $10,000 or more in short-order. Cause for concern? Maybe. What's worrisome is we've now lost the bottom of the 108-92 range we've been in. Bulls need to retake this or we could see low 80s before it's all over. BTC's weekly expected move is now pricing in a low near 82. On a positive note, we're not seeing a related rise in implied vol, and BTC weekly price momentum remains bullish. So this looks more like a correction within a bullish trend, driven largely by bearish macro factors in February, which have been on display across asset classes. See SPX, NDX, and RUT down on the month, while gold and bonds catch a bid. Sector flows signal defensive positioning as well with Consumer staples +7% and REITs +3% vs Tech -4.5% and Consumer Discretionary -6%.  Take solace in that if you will. Solana on the other hand is back to pre-election levels and has collapsed against both BTC and ETH on a relative basis. Bitcoin dominance hasn't budged off its multi-year highs, and the ETH/BTC ratio still looks trashy as hell. New ETF filings signal broadening institutional interest. While prices are under pressure, institutional appetite for new crypto ETFs continues to grow. Grayscale and 21Shares have both filed applications for Polkadot ETFs, signaling an expansion beyond Bitcoin and Ethereum-based products. Nasdaq has submitted a rules change request to allow Grayscale's Polkadot Trust to trade on its exchange, mirroring the approach used for previous approvals. This move also follows Grayscale's attempts to convert its XRP Trust into an ETF and launch a Cardano ETF.  Regulatory winds shifting. In addition to dropping enforcement actions against Coinbase and Robinhood, the SEC has officially closed its investigation into Uniswap Labs, the developer behind Ethereum's largest decentralized exchange. Uniswap had been under scrutiny since April 2024, when it received a Wells notice alleging that it operated as an unregistered broker and issued unregistered securities. The closure of the case removes a major overhang for the DeFi industry, reinforcing the notion that decentralized protocols operate under a different legal framework than centralized exchanges.  The macro environment hasn't been kind to crypto in February as the narrative has shifted to a "growth scare" in the economy. AI and crowded momentum names in equities are seeing a bit of an unwind, but this is off of fresh all-time-highs just a week ago. BTC is holding up better than most alts, while LTC continues to outperform on a relative basis.  As these are often 90-100 vol assets, corrections tend to be in the range of down 30-40%, which doesn't make it easy. For now I'm of the view this is a short-term correction within the longer-term bullish trend.  Keep a close eye on weekly price momentum. We'll have another update for you on Saturday morning. No significant change to implied volatility for BTC and ETH in the face of this quick selloff, which can be viewed as a silver lining. Zooming in on BTC... If we get a large bid in vol coupled with high volume to the downside - this would be my signal that recent weakness is likely to persist further into next month and we're undergoing a broader structural trend change. Relative performance (weekly): ETH/BTC  -1% SOL/BTC  -12% SOL/ETH  -12%   The tastycrypto Show: Mondays & Wednesdays from 4:30pm - 5:00pm Central BAG BATTLES: Mondays on the OTC Live Show from 11am - Noon Central LIVE on YouTube | LIVE on X | LIVE on tastylive Contact |  Blog  |   Learn If you no longer want to receive our communications, please click here. tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. and tastytrade, Inc. Neither tastylive, Inc. nor tastytrade, Inc. are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved, including volatile market prices, illiquid market conditions, lack of regulatory oversight, market manipulation, and other risks. tastylive, Inc., 19 N. Sangamon St., Chicago, IL 60607, United States