This is the video recording of our February 11, 2022, All Star Charts Crypto Weekly Strategy Session.
The Hidden Insight Within Liquidations
If you’ve been involved with crypto, chances are you’ve encountered a headline like this:
Crypto investors seem to appreciate these statistics. But most likely aren’t aware that the mechanism of forced selling can provide an incredible wealth of information.
Believe it or not, we can use this data to manage risk, find future support and resistance zones, and even help piece together a macro directional bias.
First things first, what is a liquidation?
Bitcoin Edges Toward Putting in a Structural Bottom
In last week’s report, we outlined a handful of bullish developments appearing as we waited for price action to respond.
We discussed the fact that the institutional money that left in October is flowing back, exchanges are seeing modest outflows, and traditional markets are looking prime for a tactical bounce.
Since then, we’ve seen Bitcoin rally to our inflection point between 41,000 and 42,000.
With momentum turning back in the favor of the bulls, the highest-likelihood scenario looks to be a few weeks of sideways price action ahead of further upside follow-through.
[Crypto] Weekly Strategy Session – February 4, 2022
This is the video recording of our February 4, 2022, All Star Charts Crypto Weekly Strategy Session.
What Is It That Technicians Even Do?
Picture this.
One of your close friends asks you about technical analysis. What do technicians do? “What even is technical analysis?” they ask.
Your first instinct is to dive down the rabbit hole of charts, indicators, and intermarket analysis. After your rambling, your friend is even more confused than before they asked.
That’s the common mistake, one of the primary reasons why technical analysis often gets such a bad rap.
In the same way you wouldn’t describe geography as the study of seismometers or biology as the field of microscopes, you’d be selling technical analysis short by arguing it’s the study of indicators.
Constructive Stepping Stones for the Alts
A few weeks ago, we outlined our patient approach in the altcoins.
Our argument was as follows:
We’re approaching this market with a high degree of patience until a higher conviction setup has been formed.
This remains a messy, low-conviction tape to be positioned aggressively long.
Since then, most alts have trended considerably lower, and there’s been little reason to be heroic in buying dips.
But, as we discussed in yesterday’s note, there are a few bullish data points creeping in that could turn the tide for the alts.
Many names now sit at support, while others are in the process of putting in failed breakdowns sporting bullish momentum divergences.
In simple English, this is a good first stepping stone to carving out tradable bottoms.
Waiting for Follow-Through
For some time, we’ve had a neutral outlook and have been in heavy cash positions.
There’s been little change in our approach since the publication of our previous Monday report, but we have seen a handful of data points in favor of the bulls.
As we’ll cover in today’s report, the institutional capital that left in October is starting to come back in, and exchanges have seen a moderate outflow over the last week.
Moreover, traditional markets seem set up for a tactical bounce. What has been a headwind could be turning into a tailwind.
These are great first stepping stones toward a more constructive picture for the crypto market, but one of our two criteria for more aggressive long positions has not been met as of yet. That is:
- Bitcoin dips to 29,000;
- strength above 42,000.
This is a tape that still commands patience.
Let’s dive in.
[Crypto] Weekly Strategy Session – January 28, 2022
This is the video recording of our January 28, 2022, All Star Charts Crypto Weekly Strategy Session.
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