DWF Labs' Andrei Grachev: crypto market activity is at bottom

With crypto markets struggling amid a confluence of triggers, global digital assets market maker and multi-stage Web3 investment firm DWF Labs’ managing partner Andrei Grachev has taken time to share his views on where the market is and why this might be “good time” to be long.

Grachev says that while the current market conditions and broader industry outlook may sound “like a nightmare”, it is such times that offer opportunities to “make money and close deals.”

The DWF Labs head shared his thoughts via a Twitter thread on Thursday.

Market activity is at the bottom, price?

Maybe not, Grachev opined as he pointed to the next few months could see an uptick in both market activity and possible prices.

The euphoria that drove Bitcoin’s price to an all-time high of $69k during the last bull market is all but gone and in its place appears to be widespread despair as prices stutter and headwinds swirl. Retail looks like it will descend even further into panic selling. So why is Grachev upbeat about the current state of affairs?

As noted above, the investor and crypto expert says it’s because the market is at the bottom in terms of activity and a bounce is likely. On June 14, on-chain metrics and data analytics platform Glassnode noted that the market was quiet in terms of on-chain settlements. Aggregate transfer volumes tracked cyclical lows and the past week saw overall transfers of just $2.85 billion per day.

“Trading activity has reached its bottom. We can observe that even solid coins are almost not traded on exchanges,” Grachev tweeted.

As the SEC sued Binance and Coinbase, liquidity and activity across the two leading exchanges has fallen sharply.

According to data by crypto platform Kaiko, Binance.US liquidity has declined by almost 76%, while market share has shrunk from 20% to roughly 5% since the SEC’s lawsuit. This even as the exchange delisted several trading pairs, including for Bitcoin Cash, 1inch, and AAVE.

In this report, Invezz analyst Dan Ashmore highlighted Binance’s shrinking market share as the SEC crackdown intensified.

To underscore this as signal the overall market outlook, Grachev points to spot volumes as oscillating at all-time lows last seen during the winter of 2019. A dearth in market activity is also observable from the fact that things like initial DEX offerings (IDOs), initial exchange offerings (IEOs) and direct listings are “dead.”

Is this the time to be long?

Investors might also agree with Grachev when he says that with retail activity hovering near all-time lows, speculation may see prices move 20-30% – even for major coins. However, the broader market remains fragile until a new trend – DeFi and NFTs before the last bull cycle comes to mind – boosts retail.

This is what exchanges, market makers and other market participants are working on behind the scene as they try to fix the market. What next until then? Noting that this isn’t financial advice, Grachev sums up the market:

“Regulatory risks, financial turbulence, lack of liquidity, market crash, collapsed volumes and assets – sounds like a nightmare, but the nightmare is usually the best time to make money and close deals. Long position with nice conditions is great nowadays.”