The “BTC can only go up” narrative has taken a bit of a turn as BTC crashed from its highs close to \$60k back well below \$50k this week. This happened m,ostly as a result of a lot of liquidation on the BTC perpetual futures on Binance. During the rally, it’s been noted that these products (as well as basically all other derivatives across the crypto markets) have been at very high premia, paying a lot in funding to shorts. As a result, open interest sky-rocketed, and the positions getting opened were, on average, at very high leverage (as is popular in these markets). When there was a small downturn (led, among other places, on Coinbase spot), then, a lot of these positions got liquidated, creating liquidation cascades and a lot of downward momentum. Since then,. BTC has begun recovering, getting back to \$50k (amidst more continuation of the U.S. inflows narrative – e.g. rumors about Saylor – and also amidst the news that the NY Attorney General’s investigation into Tether is winding down).

Outside of BTC, many altcoins have continued to do quite well. Exchange tokens have been on a giant tear, as well as many DeFi tokens, and many of the tokens in the Solana ecosystem. The general pattern has been that coins with actual use cases and revenue models have been flourishing the most – for instance, exchange tokens derive actual value for customers via, e.g., buy-and-burns. ETH gas fees have been extremely high, which has generated a lot of renewed interest in projects like Solana which present viable and cheaper alternatives.