According to The Kobeissi Letter, the Volatility Index ($VIX) remains at 43, indicating significant market volatility. Despite this, there is a record amount of retail capital in the market, with much of this capital currently trapped in investments that have declined over 40%. This situation suggests a potential risk for retail investors and may impact trading strategies focused on volatility and market corrections.

According to The Kobeissi Letter, the cryptocurrency market is currently characterized by significant polarization, with record levels of retail capital and a supportive stance from the US government. This environment is expected to lead to substantial price volatility in both directions, which traders should consider when deciding whether to buy the dip. Source: The Kobeissi Letter.

According to The Kobeissi Letter, the cryptocurrency market is experiencing a polarization due to record levels of retail capital and a pro-crypto stance by the US government. This combination is expected to lead to increased volatility, with large price swings in both directions. Traders should consider these dynamics when making decisions about buying the dip. Source: The Kobeissi Letter.

According to The Kobeissi Letter, institutions have shifted from shorting Ethereum to investing in Bitcoin. Despite record levels of retail capital in the cryptocurrency market, retail exposure to Bitcoin has decreased, with a significant drop noted in January 2025. The rise of memecoins has further accelerated this decline in Bitcoin exposure.

According to The Kobeissi Letter, the recent launch of $LIBRA, one of the top 5 largest memecoin events, resulted in the fastest destruction of retail capital on record. Since its launch, only four hourly green candlesticks have been observed, indicating a severe downtrend. Traders are reporting losses exceeding $5 million, highlighting the high-risk nature of investing in newly launched memecoins. This scenario underscores the importance of caution and due diligence in speculative markets.