For weeks global risk assets have been facing various headwinds, and BTC and other crypto has fared relatively well in the face of turmoil. As we come into a large options and futures expiry tonight, and as we come into the quarter end in equities, the resilience is starting to show cracks. The strong bid in the US Dollar, reversing months of decline, along with a significant increase in risk-off mentality that has gripped markets this week is finally taking its toll.

Turkey’s central bank interference has decimated the Turkish Lira. A Tanker stuck in the Suez Canal is disrupting shipments and adding to oil volatility. Vaccine rollouts across Europe are not going particularly well, and countries are reinstituting various degrees of lockdowns. China continues to underperform and has been selling risk every day for weeks. And finally, US markets are faced with a rebalance in debt-equity funds, where over performing equities are for sale while bonds that have been under pressure recently are bid as funds look to rebalance their exposure.

Throughout all of this, crypto has held relatively strong and relatively steady. But support only holds as long as there are a multitude of large buyers willing to step in if prices decline. As all of the above events have eroded other risk assets, it seems as though buyers are stepping back, and instead of buying the dip are simply waiting on the sidelines to see what happens. Perhaps they will step in after the crypto options and futures expiry tonight, but perhaps not. Perhaps they will step in after the quarter end next week, but perhaps not. We’ll all have to wait and see, but this is a time to make sure that you have some dry powder and are not overextended.

CrossTower Inc. provides this content for general information purposes, to better inform you on your digital asset investment journey. We do not provide investment recommendations or provide tax advice. Please consult your investment professional or tax advisor if you require assistance in these areas.