From the desk of Louis Sykes @haumicharts

Following the collapse of Luna's stablecoin, TerraUSD $UST, it's called into question the validity of its counterparts.

Tether $USDT and USD Coin $USDC have experienced notable volatility since this event.

We recommend you read Glassnode's latest report 'Unstable Coins' -- it's a great primer on what's happening.

But when it comes to down to the question "is Tether safe?", the consensus can get awfully confusing. Tether FUD has always been present, but it particularly ramped up in response to an anonymous post published on Medium, "The Bit Short: Inside Crypto’s Doomsday Machine". In fact, this piece was so significant that Bitcoin sold off over 10% in day following its release.

From the desk of Louis Sykes @haumicharts

The level of transparency in Bitcoin and crypto as an asset class allow us to gain deep and actionable insights that aren't possible in traditional markets.

As we begin incorporating more of this high-level, sophisticated data as a supplement to our technical analysis, it often allows us to express greater conviction when the setups emerge.

In what's become common in our weekly letters we publish on Monday, a good portion of our crypto macro thesis is being driven by the signals we're seeing on-chain.

Whether we're whale watching, analyzing HODLers, looking at coin maturation, studying spending habits, measuring profitability, or using a wide number of other metrics, we're learning a ton of valuable information we'd kill for in traditional markets.

As any good technician, when it comes to equities, we take a lot of data sets with a grain of salt. Often, the CEO, management, or the auditors themselves are lying or simply overlooking important details.

Sentiment is at its worst in a long time, traders are taking heavy losses, and supply has essentially transferred from weak hands that capitulated to stronger ones.

It's hard for us to expect significantly lower prices in the wake of the events of last week. As such, in yesterday's letter, we asked,  "Was that it?"

But, looking over shorter time frames, the overall picture is still a messy one.

From the desk of Louis Sykes @haumicharts

It's been almost a joke at this point to cover Bitcoin from an analytical perspective when it's been nothing but representative of the Nasdaq, US growth stocks, and long-duration assets in recent months.

People often ask what it'll take for correlation to macro to die out.

Here's a take.

Bitcoin has its whole separate supply dynamics taking place on-chain away from macro.

The reality of the situation is that there's a small group of highly sophisticated traders utilizing perps and the traditional calendar futures market in great size bounding price action to the US indices. But under the surface, there's a new group of investors and a cohort of preexisting ones that are laying down support.

Zhu Su of 3AC likens it to a supply "gentrification" to convicted crypto natives, institutional buyers, and HNW individuals, that when complete will see a significant dislocation between equity markets and Bitcoin. The price action of the last week is an extreme example of this transfer.

From the desk of Louis Sykes @haumicharts

We start the week as markets look to stabilize from yet more volatility. Supply dynamics show the dust is beginning to settle from the Luna collapse, as traders absorb and process the events of the last week.

Since the writing of our last letter, Bitcoin briefly dipped below 30,000, reaching an intraday low of around 25,000.

The market is in a state of panic, with the highest losses being realized since the Covid crash.

With the LFG capitulating their Bitcoin arsenal and Bitcoin still hanging around 30,000, it's got us asking, "was that it?"

This is the video recording of our May 13, 2022, All Star Charts Crypto Weekly Strategy Session.

It goes without saying the market's been carnage all week.

There's no shortage of noise out there.

So we want to keep it simple and share three key charts and the stories they're all conveying.

From the desk of Louis Sykes @haumicharts

This week has seen one of the largest blow-ups in crypto history.

I think the severity of the Luna collapse, in relative terms, can't be understated.

From trading at $100 a month ago to 2 cents today.

From being the 3rd largest coin in the asset class two weeks ago to currently testing support at zero.

From an 80% drawdown in a "stable" coin that's supposed to be pegged to $1 USD.

There's an incredible amount of wealth that's been lost in this blow-up.

From the desk of Louis Sykes @haumicharts

The last few days have seen one of the largest unwinds and destruction of wealth in crypto history.

By historical standards, the collapse in the Terra ecosystem will go down as some of the most wide-reaching, systemic stress the asset class has endured.

We want to dedicate a good portion of this week's crypto letter to why UST failed, how it impacted other assets, and our outlook following this event.

I was talking to some people this morning about how you can technically say that Bitcoin is still in a structural bull market.

It really depends on your time horizon.

Because when you zoom out, the past year has been really messy. It looks like a big giant consolidation.

This can either be massive distribution and a major top, or it can be a consolidation within an ongoing uptrend.

Here's how I see it.

This is the video recording of our May 6, 2022, All Star Charts Crypto Weekly Strategy Session.

We couldn't help but notice the relentless bid in Bitcoin $BTC yesterday morning while equities had a flat start. Leading up to the FOMC announcement, Bitcoin front-ran the rally in US equities.

The two have been heavily correlated in recent months; evaluating the co-movement between the two is proving to be an insightful data point for stock and crypto investors alike.