From the desk of Louis Sykes @haumicharts

In yesterday's note, we made a brief argument for caution.

Today, I want to add some further context and discuss one of the difficulties involved with trading in a tape as messy as this.

Some tools and some strategies work great in certain market environments but terribly in others.

The range can include the following: looking for bearish breadth divergences at the start of bull markets; using a long-term moving average as an entry in a sideways market environment; or even something as fundamental as deciding how to approach tactical trading opportunities.

In the case of today's crypto market, a big mistake would be to directionally trade Bitcoin when no real direction has been ascertained.

Last week, we posed the question, "Was That It?"

As it stands, Bitcoin $BTC continues to hold above 30,000 following its brief false move. There are a number of levels we're monitoring over short time frames.

Correlations with legacy markets remain intact. But we're likely at an inflection point with respect to the co-movement between crypto and legacy.

This will be the emphasis of today's note.

This is the video recording of our May 20, 2022, All Star Charts Crypto Weekly Strategy Session.

From the desk of Louis Sykes @haumicharts

Following the collapse of Luna's stablecoin, TerraUSD $UST, it's called into question the validity of its counterparts.

Tether $USDT and USD Coin $USDC have experienced notable volatility since this event.

We recommend you read Glassnode's latest report 'Unstable Coins' -- it's a great primer on what's happening.

But when it comes to down to the question "is Tether safe?", the consensus can get awfully confusing. Tether FUD has always been present, but it particularly ramped up in response to an anonymous post published on Medium, "The Bit Short: Inside Crypto’s Doomsday Machine". In fact, this piece was so significant that Bitcoin sold off over 10% in day following its release.

As technical analysts, we often like to stay in our lane and keep it simple. But given this topic is hot property right now, we thought we'd share something that...

From the desk of Louis Sykes @haumicharts

The level of transparency in Bitcoin and crypto as an asset class allow us to gain deep and actionable insights that aren't possible in traditional markets.

As we begin incorporating more of this high-level, sophisticated data as a supplement to our technical analysis, it often allows us to express greater conviction when the setups emerge.

In what's become common in our weekly letters we publish on Monday, a good portion of our crypto macro thesis is being driven by the signals we're seeing on-chain.

Whether we're whale watching, analyzing HODLers, looking at coin maturation, studying spending habits, measuring profitability, or using a wide number of other metrics, we're learning a ton of valuable information we'd kill for in traditional markets.

As any good technician, when it comes to equities, we take a lot of data sets with a grain of salt. Often, the CEO, management, or the auditors themselves are lying or simply overlooking important details.

It's why we have to manually pour through thousands of datasets in our internal scans to get the cleanest, most reliable data to...

Sentiment is at its worst in a long time, traders are taking heavy losses, and supply has essentially transferred from weak hands that capitulated to stronger ones.

It's hard for us to expect significantly lower prices in the wake of the events of last week. As such, in yesterday's letter, we asked,  "Was that it?"

But, looking over shorter time frames, the overall picture is still a messy one.

From the desk of Louis Sykes @haumicharts

We start the week as markets look to stabilize from yet more volatility. Supply dynamics show the dust is beginning to settle from the Luna collapse, as traders absorb and process the events of the last week.

Since the writing of our last letter, Bitcoin briefly dipped below 30,000, reaching an intraday low of around 25,000.

The market is in a state of panic, with the highest losses being realized since the Covid crash.

With the LFG capitulating their Bitcoin arsenal and Bitcoin still hanging around 30,000, it's got us asking, "was that it?"

This is the video recording of our May 13, 2022, All Star Charts Crypto Weekly Strategy Session.

It goes without saying the market's been carnage all week.

There's no shortage of noise out there.

So we want to keep it simple and share three key charts and the stories they're all conveying.

This is the video recording of our May 6, 2022, All Star Charts Crypto Weekly Strategy Session.

We couldn't help but notice the relentless bid in Bitcoin $BTC yesterday morning while equities had a flat start. Leading up to the FOMC announcement, Bitcoin front-ran the rally in US equities.

The two have been heavily correlated in recent months; evaluating the co-movement between the two is proving to be an insightful data point for stock and crypto investors alike.