2022 in review

Dec 29, 2022

Note: Musk is shutting down Twitter’s Revue. That's too bad, but we’ve also come to understand this product doesn’t work great, with many users complaining of deliverability. We’ll move to Substack in the new year!

Weekly musing: reviewing.

2022 was a wild year. But it was also familiar. Yes, 2021's double top was the first in a cycle. And the rise and fall was faster. But the vibe has been similar to 2018: the top of both cycles happened the year before, and there was some hope by April which was crushed by December. Let's dive in.

Mar. 2020-2022 is in white, while the yellow line shows us bitcoin from Mar. 2016-2018.

The first quarter of 2022 saw US stonks failing to print higher highs for the first time since the recovery from March 2020's COVID-induced dump. While crypto and the Nasdaq had found their tops in November 2021, the rest of the global market peaked on Jan. 4th.

Here we see the Nasdaq 100 peaking in Nov., just like BTC, and the S&P 500 in Jan.

By Q2 everyone was hopefull, with BTC rebounding from $30k - a key support level which held strongly during the May-July 2021 crash. Most were believing $100k was next as $69k wasn't really a double top. But it was, and Terra's collapse dragged BTC from $48k to $17k.

Q2 saw a +60% crash in BTC and higher in alts, with Terra's LUNA destruction.

While in Jan. I was still bullish, by Mar. I was making analogies to 2018, warning about the impending inflation crisis and the perfect storm on top of the war in Ukraine. All-in-all, even before Luna's depeg, which I anticipated, by April it was clear a short was right.

Surprise, surprise, the bear flag broke in May even before Luna's downfall.

Then summer came. BTC had a relief bounce in Aug., with some alts posting interesting gains, but the original cryptoasset failed to break upwards of $25k. That, paired with the bearish macro backdrop, meant not even the strongest bulls could hope for a swift recovery.

The rise of interest rates around the world dried up all liquid markets.

This correlation began after the COVID crash, jumping from 0 to 0.4 in a matter of days.

Meanwhile, by Q4 the consensus was that the bottom was in and that we were going to crab before lift-off. Analysts argued on-chain data indicated the bottom was in, as few anticipated an exchange like FTX could fail like it did - at least before that Coindesk article came along.

Now, 414 days have passed since BTC's all-time high in November 2021 and it still feels like we're experiencing the infamous HTTP error. But, before "year ahead" issue comes up next week, let me leave you with a bit of hopium: we tend to bottom around the 400 days mark!