They say the night is darkest before the dawn.

We may have experienced our darkest hour with everything going wrong at once in the past few weeks, and then getting hit with a black swan event with a stablecoin getting de-pegged, right when we were testing long term supports.

But now it's starting to look like the worst can potentially be behind us. As most of the world is entering a post-lockdown economy with businesses and supply chains picking up again.

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1- Luna Foundation Guard has likely used up its Bitcoin funds.

https://datastudio.google.com/u/0/reporting/b31cc9e5-c54c-4418-a6ce-b332c57e82e9/page/4YBqC?s=or-T7NeGLew

It was noticeable yesterday, when at one point the sell-off stopped, and Bitcoin stabilized, while UST was still struggling to peg.

This was one of the main driver of the sell-off.

LFG dumped millions on the market.

While they supposedly used OTC, the market knew about it, and reacted with a panic.

The bleeding of BTC has now stopped.

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2- US inflation has slowed.

I didn't think we could be there already, but inflation has slowed down from 8.5% to 8.3%.

It's still too high, but is showing signs of stabilizing, and that we may have already seen the worst.

There are many factors that helped. One that was surprising is that consumer spending has increased by 2.7%.

The fact that we don't have high unemployment combined with inflation, and recently had increases in wages, may have helped too.

Whatever the cause, a stabilized inflation means it's less likely that the Fed would need to push higher rate hikes than planned.

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3- Russia is failing in Ukraine.

At the beginning of the war, there were lots of fears about Russia going to Moldova next, or Finland. And the conflict spreading into WW3.

The conflict has shrunk, and is mostly trapped in the Donbas region.

Russia tried to launch an offensive to get some form of Donbas victory before May 9, but they couldn't muster much.

Russia's position is looking so bad right now, that they may be forced to end their operation prematurely, or could potentially be pushed out completely.

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4- Businesses and the supply chain is slowly picking up again.

Despite increases in covid cases, most countries, and pretty much all Europe and the US, aren't doing anymore lockdowns.

It looks like businesses will be able to continue to pick up the pace of recovery. While supply chains for the most part, are starting to unclog.

This adds more fuel to a potential recovery.

5- Stock markets could still recover.

It made sense for stocks to correct.

After all, they were fueled for more than a year with extra liquidity.

That extra liquidity has been switched off by the Fed. So things have gone back to normal a little too quickly.

This caused a liquidity supply shock. And the stock market had to adjust.

This was definitely a correction, but it doesn't automatically mean it will be a catalyst for a prolonged recession. That remains to be seen.

Remember that the stock market isn't exactly fueled by rationality, and is not always that connected to reality, much less macros.

If a lot of fear and uncertainty is lifted, the market could see an opportunity to buy back in.