Bitcoin History just Broke! More cascading liquidations
Thank you. Glenn johnson, appreciate it appreciate everybody for being here. It is hey, capitulation event, so lets go into exactly what this is all about. Ive been asked as well for an update on celsius im going to cover that too, but its all related. This is all about cascading liquidations and lets jump in as usual. This is sponsored by strong caffeinated beverages and thats it. So we talk about history being broken, not financial advice, its entertainment in the story today well lets just talk about the story. This is a flush out of leverage. Every single step we go down. Something else breaks, consider a 100 story. Building all the floor levels are peoples, liquidation levels and they are hitting and theyre hitting faster and faster and faster. This is a monstrous flush out of leverage, sorry about the rude picture of a toilet but thats, basically, what it is now, a visual of what this looks like not as dramatic as actually whats happening right now is as bitcoin or ethereum or whatever people have staked. As assets and a lot of it is actually on the institutional side too, as they go down in value, they need to sell assets to cover which causes a spiral, and this causes the price of the assets to decrease, which causes more assets to be sold. Real simple cascading liquidations talking about it for a week now and its ugly. Now in terms of the outlook on the horizon, i covered this in the macro update, i think, was thursday uh.
We are in a recession, ill prove that to you in a minute there is no growth in q2, consumer confidence is in the toilet as well. Mortgage rates have doubled in six months. Mortgage payments are up 50 plus for many families. Single family homes starts have crunched to a halt. Mortgage demand has crashed, building permits, crashed credit card. Debt is up because things are so expensive inflation. We saw that print a week ago. Nasty uh technology stocks are in bear market and theres no consume. Consumption left, everybody bought all the stuff they wanted to buy in the year 2000. So lets talk about the gdp uh. The atlanta fed came out with a report that gdp is now at zero again, not in line with the rest, but you know weve been talking about a recession now for a while its definitely a recession. Now the government is beginning to realize its a recession, so lets look at some of the market indicators, a big thank you as well to sanjay for the inspiration for this one. This is the nasdaq versus the 10 year yield since the beginning of the year. The orange line is the 10 year yield went up from about 1.6 percent to now about 3.2 percent and the nasdaq tanked from about 16 000 to about 10 700.. That is basically whoops. I just hit mike. I shouldnt use my hands too much, but its basically a cross and weve seen a couple of those lately too hope.
This thing is still working lets go and now bitcoin dropped out of the top 10 assets. Uh, you can see now were down below the nvidia visa, united health, meta, johnson, johnson, etc, etc. Silver and gold are still up there and other tech stocks too, but youll see this was a radical change. The well talk about the size of the market cap, but now bitcoin has become a very, very small asset under 600 million, as we speak, 600 billion. Sorry um now lets talk about the dominance. Bitcoin dominance is tanked to 41.97 percent uh, which you know its been kind of its right. Now its approaching the floor, i always say ‘ to the floor and 50 of the roof. We came quickly down over the 48 level very fast in the space of five or six days. Uh you can see here. This is the price of everything valued in bitcoin. You can see that actually ethereum is falling faster than bitcoin at 0.05. Bitcoin b b is down too, but a couple of things are holding up. Well, forget the uh, stable coins, usdc and usdt youll see how big they have become on the map. Its been a while, since i showed this you got, tron is up which is amazing, its not deep, hegging cardano, xrp solana, polka dot near avalanche v chain. They are all holding relatively well compared to bitcoin, and the reason for that is is i ill talk about in a minute, as i believe these things are not having cascading liquidations so well, dig into that more now.
In addition, this from plan b, bitcoin rsi, is at an all time low. It has smashed the records, as bitcoin is over 70 from all time highs. The 200 week average 200 week moving average is also smashed. You can see here. The greenish line is heat map. Ish of where we are – and we are way way below that, in fact, when i put this chart together, we were at 18 835. Now, as we speak, we are approaching 18 000 fast because 18 200, because these liquidations are not stopping so is there any glimmer of hope lets keep on going another visual from plan b for the importance of the 200 week moving average over history. You can see this has always held up as really really good support, but never before in the history of bitcoin have we had so much leverage in the system this dot painted, which represents the color blue, represents the distance from all time high over 70 percent. It is smashed to the 200 week moving average. Another visual, why this is historic for us right now now lets talk about the liquidations here you can see. The liquidations are not that high on exchanges, you know, bitfenix, ftx, etc, is only 140 million. Over the last 24 hours, 69 million of five million of solana, two million of cardano its a chain link really very nothing. So something else is going on here, and this is why we believe the liquidations are happening elsewhere, not on exchanges, so the fear and greed is also at six a new record low.
I have i do not recall a time where ive ever seen fear greed at the level of six before so it is a terrifying time to be out there now ive been asked uh about a celsius update. I am not the face of celsius. If anybody is misunderstanding, uh celsius has 1.7 million customers. I had a referral link. I mentioned three times it brought in point: zero: zero, zero, two percent of all those customers – if even that so just to put things in perspective, but i will give you a celsius update as to what i know – and i know a lot of people are worried. I have bitcoin, i have ethereum and i have solana on celsius right now. I didnt take anything off now there was a full on attack on celsius. This is true. Uh celsius are managing risk. You can, i watch them adding collateral to prevent liquidation, especially on staked eath and wrapped bitcoin thats. What s t e t, h and wbtc stand for. Celsius are radio silent and they have to be lawyers orders. Hence the ama yesterday was very brief at 13 seconds. Basically, cancelled celsius have lots of collateral on chain thats easily verifiable. Please go out there check out the celsius. Walls youll see that um celsius is talking to citibank about some plans forward celsius. Also hired attorneys, aiken gumpstraus howenfeld for financial guidance and celsius is mulling. Probably i dont know the nexo offer over that does expire very shortly.
I think it expires on monday, im, not sure exactly the day. I think its the 20th and per on chain data all is not lost not by any stretch. Even the biggest detractors of celsius say theres a good chance. People get 80, maybe as bad as 50. But the last point here is the most important thats. What were going to dig into right now? Liquidation risk remains out there. So lets look at what that actually looks. Like first of all stake death uh over eighth pool is disjointed. You can see the stake to ethans blue line going up and to the right nearly at eighty percent and the ethereum percentage is down about 20. The ideal ratio is a perfect balance between both, so that imbalance will cause a depending beyond probably what were already at. Let me check the current state eath story as we speak, because it is very important to watch that carefully steak to eat is at 0.935, so its its hanging tight, actually heres. The current chart. I forgot to put it in there. This is the state eath activity since the beginning of the year. You can see it was holding the peg, but it was very volatile, did go up to 1.07 and fell down as low as 0.93 back in january and we are at 0.935 right now or a little bit above the bottom. But look at the volume activity here. So it has been traded very heavily and again.
Staked eath is not like other assets. There will not be a death spiral, its just about a waiting game, so arbs will come in and pull that arab opportunity out very quickly. I think if it gets anywhere near the 0.9 level were safe, but well talk more about that. This is what is important, for everybody to know is celsiuss risk increases, as the state eath falls. So if you have a staked, eath ratio of going to say 0.7 and that combined with the fact that the ethereum price is falling, that can bring about increased risk for celsius, remember that very important. Now the liquidation price right now for bitcoin on their wbtc volt. As you can see here, let me read some of these numbers for anybody who is not looking at the actual screen, but they have been adding to this wallet building up their collateral and they have removed. They have moved the liquidation price from about fourteen thousand. Fourteen thousand eight hundred down to thirteen thousand six hundred and uh the total debt is about 224 million, so its substantial and the collateral is about 23 963 bitcoin again, it is not all by any stretch of all the bags, but it is an exposure for uh Celsius, if there is liquidation in this area now another news as well maker dao, they did vote to reduce the uh celsius exposure and that is in the event that celsius becomes insolvent and gets a margin call.
It would be forced to dump the staked eth, causing a d peg further from eath. This in turn would make make a dials hundred million dollars and die loans to celsius irrecoverable, so in order for them to protect themselves, uh their lending position and further prevent borrowing of dye using staked eth collateral maker dao voted temporarily to pause, d3m so and theres. Something similar is happening with ave, i think as well right now. They are looking to freeze the stake d that uses collateral on the platform according to a recent proposal, i think its p3 or 83, or something like that anyway. So this means the silver lining here is: maybe the cascading liquidations are soon to stop, but think of that number about thirteen thousand five hundred for bitcoin liquidation price lets, pull it up one more time. Thirteen thousand six hundred is an important number to look at. The question is: how low can we go so lets talk about? Maybe there might be a glimmer of hope or two lets cover them right now, real quick, first of all, adam back, who is an og in the space, knows exactly whats up uh. He does have a permeable case for bitcoin going to 100k this year. It might seem unbelievable, but remember this asset can move very fast and he believes uh a us physical, bitcoin etf, which is the catalyst ive been talking about for a while uh could bring about a nice whip, saw and remember, theres, not a lot of supply out There, in fact, i was just looking at the wallets, and the wallets of a hundred thousand plus bitcoin have actually gone up of late uh.
Second uh. A second sign is ill couple of crypto. He uh spoke about. The new confluence for bitcoin is at 16 to 17 000.. Let me see if someone is messaging me here. I dont know if its for anything right now now this uh, according to el capo, who has been very good at uh, estimating things lately. He believes this is going to be an important bottom for bitcoin. Remember we are a thousand two hundred from they pull up the exact price right now, because this is all unfolding as we speak. Eighteen three were thirteen hundred dollars from that seventeen thousand level, so pretty close uh now a little bit of perspective. This is from wicked smart bitcoin. You will see here uh we. He believes well spend more time, uh more or less time between ten thousand and a hundred thousand uh its not going to be over 855 days so far. But if you look at the other layers 100 to a thousand dollars, we were there for 13’ days and uh 110 days between 1 000 and 10 000., so its funny just to break out kind of where we are and how fast this asset class has grown And again its just perspective, the question is: when are we going to get to 100 000? I dont know, but it looks like a pretty sure thing based on history as we go forward. In addition, this was uh got ta thank sanjay for the inspiration for this one.
He sent me over uh. You know a potential savings vehicle and lets call this dca into fiat for the next 10 years. Imagine you start with a hundred thousand today and you add ten thousand every year to your bag, so that means over the next ten years. You will invest two hundred thousand now if the annual interest rate is one percent, its currently zero, but if it is one percent of the bank call it two or three percent, whatever um thats included here number of years is ten. The tax rate remember when you get interest on your deposit you get taxed on that and thats. Typically, you know in the us state and federal tax about 35 for some higher for others, etc, and the rate of inflation take the current eight and a half percent. Eight point: six percent, whatever, because we know thats really a fake number, its always double that in terms of reality. The point here is: you would invest two hundred thousand over ten years. One hundred thousand lump sum today, your total nominal future value, is two hundred and fifteen thousand your after tax. Future value is two hundred nine thousand and your future value after taxes and inflation is 92 000.. So whatever you invest in over the next 10 years, fiat is not a good idea and thats kind of a little segue and kind of. I know its a really dark time right now, with the markets, the way they are and everything else, but we will come out the other side, that is for certain and in fact jim stack agrees.
The good news is that this will ultimately lead to one of the best buying opportunities in decades. He writes just yesterday, but for now patience is paramount. Wait for things to turn around and get ready to pull that trigger, because that trigger is approaching us really really quickly. So with that, everybody like to say happy saturday, but uh hang tough everybody a year from now. Hopefully, this will all be a distant memory, but in the meantime, just need to get to the other side.