This is the video recording of our May 27, 2022, All Star Charts Crypto Weekly Strategy Session.
Stop Hunting Season
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.
No Conviction
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.
All Eyes on Macro
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.
[Crypto] Weekly Strategy Session – May 20, 2022
This is the video recording of our May 20, 2022, All Star Charts Crypto Weekly Strategy Session.
Is Tether Safe?
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 might be of value in this discussion.
The Metrics of Bitcoin Mining
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 make the best decisions possible.
But in the world of cryptocurrencies, there aren’t any trust issues.
We’re not at the mercy of negligent or mischievous managers. The very nature of the blockchain itself is that it’s a public ledger where anyone can observe, analyze, and categorize transactions.
When it comes to the topic of today’s post — Bitcoin mining — we have a great list of reliable metrics to fall back on from an analytical perspective.
We wanted to dive into a few of these metrics: how they help us understand the dynamics at play driving mining; how they can help us directionally analyze Bitcoin mining stocks; and the potential reads we can gain into broad market trends using mining metrics.
Daydreaming in the Waiting Room
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.
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