Daniel Yan, the brains behind Kryptanium Capital, recently shared insights suggesting that the crypto market might see less turbulence leading up to May 15th. According to him, the market’s direction for the latter part of May will heavily depend on the Consumer Price Index (CPI) data due on that day. He’s betting big on Solana, AI, and Memes to beat Bitcoin in gains next month.
Breaking Down the April Market Crash
Let’s dive into why April was rough for crypto. Daniel explained that a couple of big problems hit Bitcoin and Ethereum, and altcoins got the worst of it. First off, inflation stayed high and jobs were too hot in the US, which messed with the bigger economic scene. This led to a massive sell-off in US Treasuries—something that cryptocurrencies are really sensitive to.
Next, the Bitcoin ETFs didn’t play nice. People thought they would act like stock ETFs, where investors keep pouring money in no matter what. Turns out, that’s not the case. Folks treated it more like a game—buying high, selling low—which just doesn’t work out well.
Then there’s the altcoin mess. They had some serious cash flow problems and a lot of coins were set to be released in May, which crashed their prices big time. We’re talking a 33% drop for the average token, way worse than the 15.5% dip for Bitcoin and Ethereum.
Is the Crash Justifiable?
Daniel thinks the drop in Bitcoin and Ethereum makes sense, but the altcoin crash was over the top. He mentioned a healthy 15% drop for Bitcoin can happen when the market’s too excited, but a 30-50% crash in altcoins? That’s too much. Last time we saw something this bad was the FTX crash in November 2022 and before that, the Luna crash between April and June 2022.
“May will continue to be a very macro month for crypto. The market should behave more calmly from now till 15-May, and the CPI print on the day will dictate the direction of the second half of the month. However for the alts, I think nevertheless we should see outperformances.“
Daniel Yan
Some Good News, Finally
But hey, there’s some light at the end of the tunnel! The US Treasury kicked off its first bond buyback since 2002. They’re starting small, but they might ramp it up. Plus, the Federal Reserve’s latest statements were pretty mild, and they’re cutting back on how fast they’re pulling money out of the economy, which should help.
Also, the job market’s cooling off a bit, with weaker payroll numbers and a tiny bump in unemployment to 3.9%, the highest since March 2022. Thanks to all this, the U.S. Treasury market is finding its footing again. This all helped Bitcoin bounce back more than 10% in just a few days.
Daniel’s final take? May should be calm until mid-month, but after that, it’s all up to the CPI numbers. He’s optimistic about Solana, AI, and Memes doing better than Bitcoin. Even with the April shocks, he doesn’t see any big reasons to doubt a strong market in 2024. He thinks last month was a tough lesson but a good one for everyone betting on crypto.
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