The V-shapes recovery of DeFi blue chips back in early November was a big slap in the face moment for me. Because 8 times out of 10 bottoms don’t form that way. I missed the first 50%. But in hindsight this wasn’t all that surprising.

During the month prior to that BTC added something like $50B to the system. Major Defi players hold BTC. And therefore all of a sudden basically a ton of money was injected into the system.

This is akin to the Fed injecting a ton of QE into the legacy system. That money has to go somewhere. It usually goes to the highest quality assets first. V-shaped recovery tends to follow immediately on these assets.

By contrast, most BTC bottoms aren’t V-shaped. Particularly the spot driven bottoms. And you can rationalize this using the same theory. There isn’t all of a sudden a ton of new cash being injected into the system.