The market punishes uncertainty over risks.
It’s often better to fully realize a risk than to have it pending.
When risks are uncertain, modeling their impact on an asset is theoretically open-ended, which means an asset can potentially be worth nothing and can’t be properly hedged either.
Realizing a risk brings clarity, leading to more accurate and truthful modeling. It also allows for a shift in the narrative.
In essence, the best bottoms are formed against the prevailing consensus, often in times of deep fear or anxiety, following a significant positive price reaction to the worst news.
Times simply can’t get worse, thus they can often only get better, especially in prevalent market trends and themes seeing underlying growth.
In this case we saw a week packed with the worst news possible, we failed to pass the clarity act and looked down at a break of support. Instead of failing, it held, and a day later the CFTC and SEC stepped in to support the growth of blockchain technology.
All of this appreciation happened in the worst seasonality period, despite breadth crashing down to levels we haven’t seen since the start of the war.
Sometimes the opportunities need to be seen out of an optimistic view, when the crowd is so bearish, yet the markets shrug it off and a narrative of growth appears.
Ride the growth trend, with contrarian entries or adds on confirmation.
@RasterlyRock wrote:
We’re one week out from the Clarity Act failing.
- SEC publishes Innovation Exemption
- CFTC ships crypto rules to the White House
- CFTC updates FAQ on crypto activities
Crypto assets and equities tell the story. https://t.co/D4mPEiPQ6w
