Last week's letter addressed the asymmetric opportunity being presented to long-term crypto investors.
By most measures, the crypto capital markets are in extreme oversold conditions. Using on-chain data, we demonstrated how Bitcoin market participants are closely approaching their maximum pain thresholds.
For long-term holders, periods such as these represent advantageous places to more aggressively average into spot positions.
Over this time frame, we strongly believe that we'll look upon this period as a great time to have accumulated Bitcoin and other major cryptocurrencies.
But this raises yet another question: What does the short-term outlook look like?
As any technical analyst would be quick to announce, long-duration assets and cryptocurrencies have been in an assertive downtrend as central banks have moved into a tightening regime following inflationary pressures.
But these bear markets often see swift and aggressive counter-trend rallies.
For short-term active traders, these moves are a nice way to capture a quick buck provided you're nimble in your profit-taking ability.
In today's note, we want to explore some of the more short-term developments at work grounding our anticipation of an upcoming bear-market rally.
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