Bitcoin stuck in a boring market, Alameda trader Trabucco: Let me tell you what we're thinking

Quantitative trader Sam Trabucco from renowned trading firm Alameda Research expressed last night when Bitcoin dipped below $30,000 and then rebounded, that Bitcoin is currently stuck in a support zone and it's honestly a bit boring. He wants to share what Alameda is thinking with people.

Impact of Negative News

"Why the drop?" Sam Trabucco states he's not here to convince you what the answer is, but Alameda thinks this:

First off, the negative news roundup: Musk's change in attitude towards Bitcoin, renewed regulations in China, the negative impression from GBTC unlocking – these are bound to have an impact on the market.

But Trabucco believes the market is bound to overreact and see reversals in both the short and long term; however, currently, it's just a straight downward trend, so could there be a more impactful reversal on the horizon? Or is the market already there? He doesn't know.

What's Certain: Waning Bullish Sentiment

He believes what's certain is that buyers have become fewer over the past few days, which might reflect those reacting to bearish news outnumbering those unaffected or betting on a reversal.

Stocks Affected by Pandemic, Historical Patterns in Crypto Markets...

Trabucco also thinks there's another point to be made: last night, the U.S. stock market fell due to the Delta variant of the virus, and based on the market correlation in 2020, the crypto market might follow suit.

"But stocks have partially rebounded, why hasn't the crypto market?" Trabucco suggests maybe stocks don't have a significant impact, or perhaps they're on the verge of recovery. In any case, he finds the crypto market quite peculiar.

Breaking Below $30k Liquidation Didn't Trigger Reversal

Trabucco notes that when Bitcoin dipped below $30k on the 20th, there was some liquidation, but the volume wasn't substantial enough to induce a reversal.

Possibly Needing More Time

Trabucco believes everything points in the same direction, whether it's news, the stock market, or contract liquidation, none seem to have a significant impact for a reversal.

He thinks this may indicate a need for more time. Currently, the contract premium is low, and if there's a recovery in the future, it might be due to a milestone driven by liquidation, and we are still far from that target.

Alameda Buying the Dip

Trabucco mentions that all these factors have led Alameda to do what they do best, which is to keep buying the dip over the past few days. He says:

It's not like saying, "Just sell below $30k, we'll take it all," but we will keep buying the dip because it seems that's how things are unfolding.

Finally, he states that for a quant team, we have indeed taken quite substantial long positions, and I'm glad that most are in this direction; bull markets are really much more fun.

And all these led to Alameda doing what we do best — buying a LOT more over the past day or so. This isn't quite "sell us all you want below $30k and fuck off" territory, but we're continuing to buy down here, because it really just seems like too much points that way. pic.twitter.com/8l01jJAnhZ

— Sam Trabucco (@AlamedaTrabucco) July 21, 2021