The quantitative cryptocurrency trading firm Alameda research is betting on a market recovery, even as Bitcoin fails to recover the $40,000 level.
Sam Trabucco, a trader at Alameda, tells his 64,300 Twitter followers that crypto traders appear to be overreacting to news events.
He references the presence of prevailing bearish crypto narratives over the course of the past two weeks, such as the mining crackdowns in China, conversations surrounding Bitcoin’s environmental impact (and Elon Musk’s opinions on that issue), and the impact Bitcoin’s price dip has had on certain institutions like MicroStrategy.
Trabucco says he doesn’t buy into the actual impact of any of those stories, however.
“None of that is concrete, though, and people vacillate between over-stating the pieces of news they want to hear and under-stating the ones they don’t…
It seems like MAYBE today marks yet another paradigm switch? We’ll have to wait and see – Alameda’s new long positions are sure hoping so.”
The trader notes that news fuels liquidations, which in turn exacerbate the population’s overreactions to price changes.
I think different kinds of news were dominating price action for each period.
June 9 – 11: El Salvador / reversion from Elon dump
June 11 -13: China/U.S. FUD / reversion
June 13 – 15: Saylor or something / reversion
June 15 – 23: China FUD / "Is Saylor fucked?" / reversion— Sam Trabucco (@AlamedaTrabucco) June 23, 2021
“Each of these, I think, constituted an over-reaction – that’s why I included ‘reversion’ as an effect for all of them, because I think probably none of them *really* mattered in the first place for BTC’s ‘value,’ or where people should be pricing it medium-term.
– Can you tell me where El Salvador is on a map?
– The China FUD is new-ish, but China has always had FUD and we knew China would do *something*.
– Warren is FAR from regulating crypto away.
– We *know* instos are *in*, this TWAP doesn’t move that needle.
– Saylor isn’t fucked.”
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source https://dailyhodl.com/2021/06/24/top-crypto-trading-firm-alameda-research-betting-on-market-recovery-heres-why/