Monitoring Leadership From the Sidelines

In yesterday's note, we outlined how we're approaching the market in the aftermath of this volatility.

Bitcoin remains stuck between strong support in the low 30,000s and resistance around 42,000.

Unless we're buying dips to the lower end of the range or a break above this resistance zone, there's not a whole lot to do in terms of trading either Bitcoin itself or most of the individual alts.

This message most certainly remains relevant despite yesterday's recovery.

But in evaluating the names leading this recent bounce, relative strength has been concentrated in names we've been pointing to in recent weeks.

Names like Cosmos $ATOM, Terra $LUNA, and Fantom $FTM all held up reasonably well in relative terms and have also been leading this recent recovery bounce.

These are three of the best-looking names in the entire asset class from a relative strength perspective.

We anticipate that if the market continues this bounce, these three names will lead the recovery higher.

The key levels for Luna remain 52 and 82.

We can be buying dips back to 52, and breakouts above 82. There's nothing to do right now, as we're right in between both levels.

Similarly, we're watching 45 in ATOM for a breakout or buying weakness back to 26.

The levels are less defined for dip-buying in Fantom, but we can use the recent pivot lows of 1.70 to buy weakness.

If we see a tactical bounce in the next few days, these three names will likely be leading the charge higher.

To be clear, none of these are currently in short- to intermediate-term uptrends.

We can argue that they are in longer-term uptrends. We can make the case that these are the leaders in terms of relative strength (and we did).

But with respect to pure absolute uptrends, these aren't it.

Understand that while long positions might work, the probabilities currently are for more chop.

Starter positions make sense. But adding on breakouts and putting on real positions under those breakout scenarios is what makes the most sense right now.