A Pivotal Moment

Louis Sykes
January 19, 2023

Forget cryptocurrencies. Look at these crypto stocks!

Seriously, some of these moves have been nuts.

We took a small long in MicroStrategy $MSTR at the lows, and it hit our 50%-plus target in just two weeks.

Crazy...

If cryptocurrencies are going to start trending higher -- which is our bet -- these stocks face serious resistance.

But let's approach this with a level head.

Yesterday, we made the case for some short-term digestion following this recent move. Countless coins are running up against overhead supply, levels most of them respected in yesterday's price action.

Take a look at something like Solana $SOL, which corrected 10% to the downside yesterday after it retested its breakdown level.

When we examine crypto-related stocks, the same thing is happening here too.

Here's the Bitwise Crypto Industry ETF $BITQ getting rejected following this retest of resistance:

This is textbook polarity. Would we want to short it?

Hell, no...

Have you seen the moves in stocks like Coinbase $COIN and MSTR?

As soon as Bitcoin $BTC reclaimed 18,000, shorting anything related to crypto became a stupid idea.

We're more interested in letting these markets contract in the short term and buying any weakness with some level of conviction.

For Bitcoin and Ethereum $ETH, we're buyers of weakness anywhere down to 18,000 and 1,200, respectively.

As long as those two hold those levels, you can make a bullish case for these stocks.

In the short term, some consolidation is warranted.

But we are at a pivotal moment for the primary long-term trends.

Be prepared...

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Thanks for reading, and please let us know if you have any questions!

Allstarcharts Team

 

 

 

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