The Stillness Before a Car Wreck

We held our breath… Our body tensed up a bit… Were we about to witness carnage? Nobody knew. But what we did know, history was being made. Bitcoin’s reward was dropping in half. And while this event unfolded, the market stirred. The way it did so is something we want to share today… Because the market was hanging by a thread for a couple of hours… Waiting for somebody to give it yank. And just because it didn’t break doesn’t mean it won’t give in the short-term.

Tether was Bearish

In the few days running up to May 11th, tether was exiting exchanges in mass. So much so that there was only 25% of the typical amount left on exchanges. Then the day of the halving, it accelerated. Here’s a snapshot of a two-hour period on the day:

Red means bad. Plain and simple. This is over $25 million in tether moving out of Binance in just a couple hours. Nothing was moving into exchanges. That is an odd activity. Typically there is pretty steady flow in and out… But to have virtually unanimous outflow was odd. Then, it picked up. (40M and 8M outflows - that is a large quantity)

The pace of tether flowing out of exchanges literally doubled. Alarm bells were beginning to ring… Now, when the tether is flowing out of exchanges, it means BTC loses buying support. So any downward move is less likely to be bought up. The reason is there’s just no money. To show you can an example of what I mean, we can actually look back to last weekend. Our infamous Pablo sold 2,850 BTC shortly after the tether was leaving exchanges.

That’s the picture we posted on our Telegram channel shortly after it happened. Pablo’s wallet woke up and dropped the market nearly $2,000 in minutes. We highlight this to say, the drop wasn’t healthy. Two days earlier 5,000 BTC was eaten up in minutes… Price didn’t move. Over the weekend, things changed. So when the halving came and tether started to flow out of exchanges, all of us at Jarvis Labs were sitting at the edge of our seat.

Enter Stage Left

It was twenty minutes until halving. Our trading bot Jarvis was already short and in profit so our algorithm was working just as expected. But our eyes remained glued to price. We felt as if we were watching a car barreling down an icy road in the middle of the night. It was a scene we felt only a handful of people were witnessing. ⦁ Tether was flowing out of exchanges at a rate we haven’t seen in years. ⦁ Bitcoin on exchanges were already extremely low. ⦁ The halving was happening in less than 60 minutes. ⦁ Orders were being pulled on the exchanges. Price was ready to make headlines by tanking… Meanwhile, Novogratz, Jimmy Song, and Tone Vays were preparing to celebrate the halving with a toast. So what was the result? Nothing… The car took the turn cleanly and disappeared into the distance. Miners kept running their hardware, the major crypto conference Consensus kept chugging along, and the price stayed still. We were in disbelief. It’s only a couple hours after the halving as I write this. So chain flows and prices might have returned to normal by the time we publish. But make no mistake, in the short-term on-chain activity is bearish. Until next time, we’re on the scent… p.s. – The Jarvis Labs team is debating whether people want chain flow metrics delivered to their inboxes daily. If you think this is something you might be interested in, reach out to us. We plan to offer it for free and want to show how powerful these stats are.

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Jarvis Labs is the creator of Jarvis, a fully independent artificial intelligence system that tracks on-chain (USDT, BTC, USDC, ETH) movement, exchange flows, market sentiment together with a bulk of other data, then pairs it with the activity of more than 550 wallets to generate tradable signals. To join us in our hunt, stop by our website, check out our Telegram channel. Contact our analyst Ben on Telegram for further details on Jarvis.