This is the video recording of our September 10, 2021, All Star Charts Crypto Weekly Strategy Session.
The Cascade Crash
That was quite the day yesterday…
We experienced $3.5B worth of long liquidations in the last 24 hours, with over $1.8B taking place in under an hour at the height of the crash.
Source: ByBt
Bitcoin’s total open interest across all exchanges has fallen by a mighty 23%, and Ethereum’s OI fell by 25%:
Source: Glassnode
Combined with this, we’ve seen a 21% reduction in the amount of futures contracts margined with US Dollars, along with a 7% drop in crypto-margined contracts.
That’s a sizeable amount of leverage that’s been flushed from the system in what can be seen as a healthy reset.
Bitcoin’s aggregate average funding rate of perpetual futures positions has fallen into negative territory for the first time since July.
Bitcoin’s Polarity
One of the first lessons you learn in technical analysis kindergarten is the principle of polarity.
That is, former support turns into resistance, and vice versa.
The thinking here is that when buyers absorb all the overhead supply looming at resistance, the market has nowhere to go but up. When the market breaks out and retests that former resistance, it turns into support on the way down.
This language of supply and demand is true everywhere, but particularly so in cryptocurrencies, where there are no earnings, dividends, and discounted cash flow models to dilute the necessity of price.
So, with this all said, is this a textbook example of polarity taking place in Bitcoin?
It’s A Bull Market, You Know…
Things are looking pretty damn good right now.
Bitcoin’s got a 50 handle.
The alts are pushing to new highs.
And on-chain behavior continues to suggest accumulation on the part of long-term investors.
The bottom line is that if Bitcoin is in the 50,000’s, we need to be aggressively long crypto.
[Crypto] Weekly Strategy Session – September 3, 2021
This is the video recording of our September 3, 2021, All Star Charts Crypto Weekly Strategy Session.
Alt Season Heats Up
The bottom line is that we’re seeing more new highs underneath the surface.
After Ethereum’s impressive +11% print following our bullish tone earlier this week, Bitcoin looks to be inching closer to a 50 handle.
As we’ve been outlining, if Bitcoin is in the 50k’s, we need to obnoxiously long crypto, particularly the altcoins.
“But Crypto’s Too Volatile”
There’s a permeating myth that cryptos are too volatile to invest and trade.
Naysayers will argue that because volatility’s so high, they won’t touch it.
The reality is that Bitcoin’s less volatile than some members of the S&P 500.
Hell, Crude Oil literally traded in the negatives just over a year ago… talk about recency bias for people leaving that out from the equation.
The real debate isn’t comparing cryptocurrencies to other asset classes, it’s one of risk management.
So let’s flip the question.
The Sun Rises for Solana
The talk of the town is Solana, for good reason.
While many cryptos have consolidated in the last few weeks, the entire Solana ecosystem has been on fire!
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