As technicians, we tell it as it is.

By focusing the vast majority of our research on price action, we're simply following money flow. We hate to sound like a broken clock, but if you're following something other than money flow, it's just noise.

Ignore it.

Money flow is by definition the only driver that impacts markets. That spans from price action, derivatives data, order flow, and, in the case of cryptocurrencies, on-chain.

Apart from that, all else is noise.

In this process, we typically have a rather binary view of markets.

"Above this level, we own it. Below there, we leave it alone."

We constantly say this for a reason.

We're not trying to be obnoxious in repeating itself. We are quite literally adjusting our thoughts based on money flow.

"Strong opinions, weakly held," as they say.

From the desk of Louis Sykes @haumicharts

Naturally, after a drawdown like the crypto markets have endured, this is the part of the cycle where everyone tries to call a bottom. Of course, we don't need to discuss the dangers of this treacherous journey of bottom-calling where many traders eventually meet their fate.

There is perhaps no worse setup for active traders than in environments like these.

Times like these are when volatility is rampant, emotions are elevated, and bad decisions are made.

But, there are two antidotes:

1. Don't trade, be patient, and buy when upward momentum returns.
2. Dollar cost-average in the value zones.

For the most part, we continue to hammer down the first point. Going back to December, we've been preaching patience and high cash positions.

But today, we want to address the potential credence in the notion of Bitcoin dollar-cost-averaging in the context of this recent selloff.

This is the video recording of our June 17, 2022, All Star Charts Crypto Weekly Strategy Session.

It can be hard for traditional investors to gain appropriate exposure to crypto. There are many hurdles to jump and hoops to clear.

The Bitcoin futures ETF, launched late last year, is a step in the right direction. But isn't a perfect solution. Over time, futures ETFs are incredibly expensive, as the fund provider has to constantly roll over the contracts.

In an ideal world, US investors would have a Bitcoin spot ETF, which, of course, does not yet exist.

Another possibility is to skip the Bitcoin/cryptocurrency exposure and invest in crypto-related companies. That's certainly a viable solution.

From our work, we've found MicroStrategy $MSTR is, by far, the most fitting vehicle for those looking to gain exposure to Bitcoin via a traditional stock.

Other stocks, like mining and banking names, have their own idiosyncratic risks and drivers beyond crypto trends, making them less-than-ideal solutions for those seeking exposure solely to cryptocurrencies.

But beyond this is yet another solution.

How about crypto equity ETFs?

There's no hiding the fact that we've had little to discuss in the way of tactical trading opportunities.

To avoid repeating ourselves, we're continuing our patient approach. You can read yesterday's note or last week's for more detail.

Speaking anecdotally, crypto traders specifically seem incredibly susceptible to a subconscious bias that they always have to be positioned. Everyone's trying to bottom-tick the market to fuel their ego.

It's a rookie's mistake, and the reality is far from the truth.

Maintaining the ability to sit out is not only a necessity in markets like these, but I'd argue should be the default option for traders.

The old saying is that there's only a handful of periods every year to make money. You're being patient for the rest of the year, waiting for the setup to form.

This perfectly encompasses our approach.

In last week's letter, Keeping Out of the Waters, we continued to argue the case for neutrality in the near term.

There's been so little to discuss in the way of actionable trade ideas in this messy, choppy environment. Assessing the price action over the weekend, it seems this patient approach has paid off.

We were stopped out of our starter Bitcoin $BTC long and a few positions in crypto-associated equities at a small loss. As Bitcoin hit our stop in the upper 20,000s, we sold any exposure we had and moved straight back into cash.

Following this volatility, we are not interested in calling a bottom.

Patience has been and continues to be the strategy in this tape.

This is the video recording of our June 10, 2022, All Star Charts Crypto Weekly Strategy Session.

It's no secret that long-duration assets have been hit the hardest in this bear market, with interest rates on the rise.

Think about growth stocks and the tech junk that peaked in February 2021 -- it's been a painful bleed lower ever since.

But, in recent weeks, even the worst stocks have stopped going down.

And, what's more, they're finding footing at notable levels of interest, whether it's their pre-pandemic highs, their pandemic lows, or their 2018 lows.

Yesterday, we explained our neutral bias over short time frames. With elevated futures leverage, we continue to anticipate whipsaw-like price action.

Last night we saw this manifest, with Bitcoin $BTC sharply selling off, giving traders yet another failed breakout signal.

This was the first strong selling we've seen in Asian hours for a while. As it stands, this is not a friendly tape for short-term directional trading.

As we said yesterday, this appears to be a “fade the breakouts” type of environment.

We also discussed the following altcoin index chart, noting that alts haven't provided a strong buy signal over short time frames.

The index is still below key support, on an absolute basis and, more importantly, relative to Bitcoin.

Crypto markets appear to be stabilizing in the aftermath of the Terra $LUNA crash, with Bitcoin $BTC slowly progressing to the low 30,000s. Many altcoins are pressing down on critical support levels.

As we'll cover in tomorrow's note, many are well-defined for long-taking opportunities if the conditions arise.

But looks can often be deceiving.

We're still placing a high weighting that near-term price action will involve a high concentration of whipsaws. This appears to be a "fade the breakouts" type of environment.

This is all taking place within the context of Bitcoin resting on macro support of around 30,000.

All in all, we have a neutral bias for the weeks ahead. But, zooming out, this would be a logical area to see Bitcoin and the others bounce over longer time frames.

This is the video recording of our June 3, 2022, All Star Charts Crypto Weekly Strategy Session.

From the desk of Louis Sykes @haumicharts

The beauty of trading and analyzing crypto is the level of transparency of the data.

This is put on full display when it comes to the sprouting industry of on-chain analytics, but the same principles apply when evaluating money flow as a collective.

Not only does crypto host its own exclusive metrics that aren't available in traditional markets, but traditional indicators like the topic of today's post often have additional nuances involved.

This enables us to gain even more insight than what is possible in other asset classes.

Today, we wanted to explore how we use open interest in our crypto process to supplement our traditional technical analysis research.