BTC, ETH finish month strong

Both Bitcoin and Ethereum capped off the final hours of a grim May 2021 with respectable rallies, respectively.

The latter, ETH, rose 15% on Monday, May 31, as of the end of the day. ETH rose 2% to start Tuesday, June 1. At 7:30 a.m. (EST), ETH, which is the second-largest crypto as measured by total market capitalization, was about $2,600.

Biggest-and-best-known BTC notched an 8.8% gain on Monday. This morning, BTC was flat (over 24 hours as of 7:30 a.m.) hovering at about $36,400.

As of today, total crypto market cap has increased 5% to $1.64 trillion. Some impressive weightlifting feats can be spotted among the middle tier of fairly big altcoins (those ranking from 20th-largest to 40th) with VeChain (VET), Theta (THETA), Shiba Inu (SHIB) and Kusama (KSM) all rallying.

June, mercifully, has arrived. How bad was May? Bitcoin fell 35%.

BTC's worst-ever month: August of 2011. That's when the then-still-obscure digital asset fell 39%.

The following month, BTC lost 37%.

Well, BTC couldn't get obliterated for a third straight month, could it?

In October 2011, BTC lost 37%, again. The bottom at the time didn’t get touched until the phrase "two-buck Bitcoin" started being bandied about.

Six years later, in December of 2017, cries of "BTC $20K!'" echoed across IT desks.

The following month, in January of 2018, BTC fell 26.9%. BTC finished the year down 73.4%.

Who can say, with any degree of certainty, whether Bitcoin’s price has bottomed? No one.

Still, traders try to assemble enough signals to glean some statistically steeped sense of probability.

An options-based metric, the "skew" indicator, sometimes gets called the “professional trader fear and greed indicator,” as it reflects confidence levels of market makers through the prism of the premiums that they place on puts and calls.

BTC buyers looking to hedge against a price drop will snap up put (sell) options; which, in a put-buyer’s market, become more expensive (the more traders seek downside protection).

Premiums in the options markets are expressed (wonkily) as "30-day options 25% delta skew."

A “positive 25% delta skew” will be observed when traders drive up the cost of downside insurance. Historically, this can indicate bearish conditions. On the other hand, a bullish marketplace is often accompanied by costlier premiums on call (buy) options, creating a " negative 25% delta skew."

A 25% delta skew oscillating between a -10% and a +10% band is (usually) read as neutral. This Zen-like equilibrium reigned until mid-May, when Bitcoin fell below $47,000.

The closely scrutinized "skew" metric, as of the end of May, remained above +10%. Any sense of “okay, that’s the bottom” therefore would ring hollow at least until the skew establishes a more neutral pattern, below the +10% level (Cointelegraph).

Chinese authorities have rebuked crypto with a fresh round of forcefulness and the fallout has begun. A couple of exchanges are noticeably scaling back exposure while some large mining operations have ceased altogether.

Are we about to witness the near total elimination of crypto activities in China? Not quite; the most likely scenario going forward is a sort of gradual estrangement, according to Shuyao Kong who writes the weekly Da Bing column for Decrypt.

The government will continue to take measured steps to tackle the danger of crypto going mainstream, short of actually outlawing it. This slowly peeled-band-aid scenario (assigned a 50/50 likelihood) is perhaps the most dangerous one “because it spreads the pain out for the foreseeable future,” Kong said.

Crypto entrepreneurs aren't blind, and have either left China or are preparing an escape path.