April 20, 2023

🥛3 reasons why BTC & ETH fell 🔽

GM. This is Milk Road, the Tom Cruise of crypto newsletters. We do all our own stunts research.

It’s Thursday! Happy Hour’s tonight (woo.) Leggo:

  • Crypto sees $250M liquidated 📉

  • Graphs of the Day: A BTC indicator you should know 📈

  • Match made in heaven 🤝

  • Taylor Swift avoided FTX 🍪

Prices as of 9:30 AM ET.

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I was having a solid Wednesday morning. Crushed leg day and coffee was hittin’ good and everything.

Until I started seeing red…as in crypto prices had hella dipped in the past 24 hours.

  • BTC fell 4.5% to $29,158

  • ETH fell 6% to $1,975

Why the drops? 3 things:

1/ A weirdly large sell order came from Binance

Someone sold 16K BTC worth $467M+ on Tuesday. Other investors could have seen and followed suit…

2/ The UK released super high inflation metrics

The Office for National Statistics reported an inflation figure higher than 10% for the month of March. Regulators considered raising interest rates to compensate.

Higher interests rates = investors avoiding risky assets including crypto

3/ People were selling with so much supply in the green

BTC soared past $30K & ETH past $2K just last week. Those are both Really Important Levels we hadn’t seen in months. 

Maybe people were just giddy that they’d HODLed long enough to sell at higher prices. And so they did.

Whatever the reason, the dips caused a squeeze. 

~$240M was liquidated from the crypto market within 24 hours. That happens when margin traders (investors who borrow funds to buy crypto) don’t put up enough collateral. 

So the exchange closes their position since they don’t have enough money to keep their trades open/cover losses.

ETH saw $58M liquidated & BTC saw $63.6M. The largest single order happened on Binance – someone had $3.02M liquidated.

Most were longs, or bets on an asset’s future price. Looks like folks got spooked and exited when they saw the price dips…

The Milk Road Take: Now yes, this all sucks because BTC & ETH slipped back below their months-long highs.

But both are still much higher than they were in late 2022. Plus, mass liquidations & price moves are normal in a volatile world like crypto.

Don’t hate the [dips,] hate the game.


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1/ Bitcoin’s reserve-risk multiple turned positive

It’s the first time that’s happened since October 2021. Check out the other times the indicator has crossed 0:

So what is it? It compares: 

1/ The incentive to sell: That rises as prices go up, since holders want to cash out for higher returns.

2/ The opportunity cost of selling: That refers to the returns holders may miss out on if they sell too early.

Basically, it lets us see how confident long-term holders are and compare that to the price of Bitcoin at any given time.

Why should we keep an eye on this? This thing’s more obscure than a random indie band, but it has a history of accurately predicting Bitcoin’s movements.

Here are the price rallies following the five previous crossovers:

  • 2012 → +2,830%

  • 2013 → +556%

  • 2015 → +6,400%

  • 2019 → +99%

  • 2020 → +487%

This is good news, but another indicator suggests otherwise…

2/ ~77% of BTC’s entire supply is in the green

A total of 14.8M BTC is now back in a profit position, per Glassnode.

6.2M BTC of that turned green just this year. That’s about 32.3% of the total supply.

So what’s going on? BTC is in the ZONE. It’s up 80% since January and just passed $30K last week (although it’s dipped a bit…)

But here’s the catch: with so much BTC back in the green, investors may want to sell or spend their tokens and get those #gainz. 

HODLers, look away.

3/ 3.087M ETH ($6.1B) have been burned since Ethereum’s EIP-1559 upgrade

The update rolled out in August 2021 and meant part of every Ethereum-based transaction would be burned.

But wait, why would you burn ETH?! Who hurt you…

Well, burning some of a token’s supply is actually good for the Ethereum network – that’s how it stays deflationary. 

When you reduce ETH’s supply, it becomes more scarce. Scarcity = higher ETH prices


Gas prices are skyrocketing again. And I’m not talking about the price at the pump…

I’m talkin’ bout the fees that power the Ethereum network. Measured in Gwei, gas shows how busy the blockchain is at a given time. 

And on Tuesday, the average fee hit its 3rd highest level of 2023.

What caused this? MEV searchers and meme coins.

MEV searchers front-run other investor’s transactions. They pay higher priority fees to have their orders filled before others.

And these aren’t crumbs. One wallet, jaredfromsubway.eth, spent over $2M in fees last week. That alone accounted for 7% of all of the Ethereum network’s revenue in the last 24 hours.🤯

One estimate said the wallet made $1.4M from this.

The reason this has been so profitable? Meme coins are on a tear – one trader was able to turn a ~$250 investment into $2M in 5 days. Talk about diamond hands.

Meme coins feed off FOMO. That makes people act rashly with their trades, which is lucky for folks like Jared just waiting to pounce.

Why is this important?

  • Users are are coming back to the blockchain and are more open to risk

  • The transparency of the blockchain has pros and cons

  • ETH’s scalability is still an issue when activity is very high

The best part? More activity and fees = more ETH supply burned 🔥


Taylor Swift almost signed a $100M sponsorship deal with FTX. But she knew Sam was trouble when he walked in.

Coinbase got a license to expand into Bermuda after so much regularity confusion in the U.S. It has begun…

The Wolf of Wall Street is launching film NFTs. Arriving in Q2, the NFTs will grant holders unlockable content, experiences, and never-before-seen parts of the film.

Russia plans to mine crypto for cross-border deals. If the bill passes, crypto trading and payments would still be banned in Russia.


That's a wrap for today. Meet us on Twitter to talk all about it. It’s kinda like a family BBQ but better – no screaming kids, awkward photos, or drunk uncles telling weird stories (@MilkRoadDaily)


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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.