Report: It is too early to bet against Bitcoin, but caution is still needed

On March 3, Matrixport said in a research report released earlier Friday that it was not the time to be completely short of Bitcoin, but suggested that if the price of Bitcoin fell below $22800, it would reduce its exposure by 50%. According to the report, the US stock market has started selling again, and US bond yields are rising. The current yield of two-year US treasury bond is about 4.87%, higher than the peak of 4.8% in November 2022. The difference or interest rate difference between the yields of two-year and 10-year treasury bond is at an unhealthy level of -0.87%. The daily trading volume of cryptocurrency has dropped from about US $80 billion to US $60 billion, which indicates that traders’ interest in cryptocurrency market has declined, while the continuous outflow of BUSD stable currency has led to a decline of market value of less than US $10 billion.

Interpretation of this information:

The message released by Matrixport on March 3 suggests that while it may not be the best time to short Bitcoin completely, there are certain conditions that would make it appropriate to begin reducing exposure to the cryptocurrency. Specifically, if the price of Bitcoin falls below $22800, Matrixport suggests that they would reduce their exposure by 50%. The rationale for this decision is based on several factors.

First, the report notes that the US stock market has started selling again. This implies that investors are becoming more risk-averse, which could lead them to move their funds out of riskier investments like cryptocurrencies and into safer assets like bonds or cash. Additionally, the report notes that US bond yields are rising, with the yield of two-year US treasury bonds reaching a level of 4.87%, higher than the peak of 4.8% seen in November 2022. This indicates that investors are increasingly interested in bonds as a safe-haven asset, which could further dampen demand for cryptocurrencies.

Another factor cited in the report is the declining interest in the cryptocurrency market among traders. The report notes that the daily trading volume of cryptocurrency has dropped from approximately $80 billion to $60 billion, suggesting that traders are losing interest in the market. This is further evidenced by the continuous outflow of BUSD stable currency, which has led to a decline in the market value of less than $10 billion.

Taken together, these factors create an atmosphere of increased uncertainty and risk aversion. While the report does not suggest that Bitcoin is necessarily a bad investment, it does caution that the overall market conditions may not be favorable for the cryptocurrency at this time. As a result, investors may want to begin reducing their exposure to Bitcoin if the price falls below the specified threshold of $22800.

In conclusion, the message released by Matrixport on March 3 suggests that investors should be cautious about their exposure to Bitcoin given the current market conditions. While it may not be the best time to completely short the cryptocurrency, the report recommends reducing exposure if the price falls below a certain threshold. Ultimately, investors will need to carefully evaluate their risk tolerance and investment objectives in light of the current market conditions to make informed decisions about their portfolios.