Heroes And Zeros

And considering just how immature this trend in digital asset investing is, it's shocking that there are just about as many options for investing in crypto as there are for traditional equity markets (depending on how you measure it).

Does it seem frothy? Sure it does. But that's just fine. There's a lot of money to be made in this space right now, especially in the right names.

But it would be foolish to think that ALL of these coins are going to stick around. As with any asset class, there will be winners and losers.

You'll have your heroes, but you'll also have plenty of zeroes. And as always, there will be far more of the latter, so be prepared.

We think this will be particularly true for Crypto Markets.

This becomes a really attractive space if you respect your stops and limit losses. So let's talk about just how we plan to do that in the coming weeks/months.

Today we'll look at the near-term relative strength within the crypto universe and see which coins are most likely to emerge as the winners, and losers once the current corrective phase passes.

Yesterday, we discussed potentially putting some money back to work based on how the current consolidations in both of crypto's significant players - Bitcoin and Ethereum, end up resolving.

This bubble chart shows the performance of some of the largest cryptocurrencies ever since Bitcoin began trending sideways in late February:

While the change is plotted on the x-axis, the drawdown from each coin's 52-week high is on the y-axis. This illustrates which coins have been most resilient and bucked the trend while the majors have been correcting in recent weeks and months.

Hence why risk management is so essential: Limiting losses in the losers allows you to employ more capital into the coins that are working.

Here's an example of one of the more recent leaders.

VeChain $VET has been steadily trending higher for years and is now attempting to break out again after a sizable drawdown this past month.

As you'll notice in the bubble chart, it's also been the best performer in our Top 50 Crytpo Index since February 21st.

Leadership. Momentum. A robust primary uptrend. There's plenty to like here in $VET.

We want to buy any weakness back toward 0.12 with a short-term target at 0.19.

As for the recent laggards, Litecoin $LTC, Stellar $XLM, Chainlink $LINK, and Cosmos $ATOM have all posted losses of -20% or more over the trailing 3-months and change. Although in terms of short setups, they aren't really offering us great risk/rewards at current levels.

But Terra $LUNA definitely is. Check out this former resistance turned support at the February highs around 8:

Sellers just defended this level with authority as LUNA was lower by nearly -20% yesterday as its retest was rejected.

Considering that it's barely been hanging on relative to its peers, as illustrated by LUNA/BTC rolling over in recent months, this is definitely a coin we would expect to emerge as a laggard once the recent volatility subsides.

In the current range between 5 and 8, LUNA is rangebound.

But if and when sellers violate those May pivot lows and the lows from earlier this year in the 4-5 area, this is definitely a short.

When the smoke finally clears and we can look back on this period in hindsight, there will be some real heroes but there will be a hell of a lot more zeros.

And based on these coins' performance over the trailing quarter or so, it's looking like VET could be a future hero.

As for LUNA, it's looking more and more like a future zero. We want nothing to do with these kinds.

To conclude, here's a quick glimpse of how the Top Cryptos performed yesterday:

There's today's scoop on Cryptocurrencies!

Please reach out if you have any questions.

Allstarcharts Team

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