This is the video recording of our August 23, 2021, All Star Charts Crypto Weekly Strategy Session.
How to Pick Winners
What are the things we look for most when trying to identify leadership?
First, it’s all relative. When the market is selling indiscriminately, this becomes more challenging. You’re literally looking for the assets that get hit the least. It’s not until the volatility subsides that we start looking for those that rebound out of it the strongest.
In today’s post, we’ll use the recent selloff and rebound in crypto as a case study for how we pick winners out of a loser’s market.
Here are two of our favorite ways to find future outperformers:
- Relative resilience during selling pressure.
- Relative momentum and strength – both into the peak and off the lows.
With the former, we can use tools like relative strength – or, rather, the absence of weakness – in addition to chart characteristics like bullish divergences and momentum not hitting oversold.
With the latter, we’re again looking at relative strength. Who were the biggest gainers since the market bottomed? Who are the first to take out their AVWAP from the highs and/or other key levels?
Which tokens are already back at new all-time highs? If it sounds simple, it’s because it is.
If You’re Not Long, You’re Short
At this point, the data has spoken.
If you’re not long Crypto Currencies in one capacity or another, you’re essentially short the space.
There is that much alpha being left on the table if you’re not involved.
We can get into what’s happening with all these protocols and platforms, or you can just focus on price. Fortunately, the latter happens to be our area of expertise.
The bottom line is this: If the Bitcoin vs S&P500 ratio is above 7.0, you HAVE to be long. Period. [Read more…]
Under the Surface Strength
If there’s one prevailing theme right now, it’s that there’s a growing list of cryptos making new highs.
It all started with Cardano, and we know how that turned out…
For us, it’s very simple. The coins that are among the first to breakout are the strongest names and will continue to lead the asset class higher.
As we said in yesterday’s note, if you’re solely focused on Bitcoin wedged under resistance, you’re not seeing the strength under the surface:
Just take a look at the Altcoins reasserting leadership versus Bitcoin at this very logical level.
Placing Our Bets on Crypto’s Leaders
Cardano was the talk of the town last week.
Even though our initial target of 2.20 was hit within a matter of days, let’s not underestimate the implications of this base:
With a breakout of this magnitude, this thing could be at $10 in no time.
It’s no joke.
But it’s not just Cardano showing incredible leadership right now.
If you’re solely focused on Ethereum and Bitcoin, you’re not seeing the whole picture.
[Crypto] Weekly Strategy Session – August 13, 2021
This is the video recording of our August 13, 2021, All Star Charts Crypto Weekly Strategy Session.
Is the Alt Season Emerging?
In the world of crypto, there’s one overarching relative theme that governs the entire asset class.
That is, Bitcoin vs everything else.
Over the years, this simple trend has dominated the asset class for so long. Due to the sheer size of Bitcoin compared to the others, when it’s in a leadership position, it scoops up so much capital that most of the other coins are forced to wait for their turn.
Could this change?
It would only make sense, especially as the market-caps of the other altcoins grow.
But as we said in yesterday’s note, all we can do is look at what’s in front of us, right now.
That is, this relationship is still the single most important relative trend for crypto traders to pay attention to.
We’ve talked in great lengths about this dynamic before, and the various way to visualize it.
The Ethereum/Bitcoin ratio, for instance, serves as a great gauge of this trend. Bitcoin’s market-cap dominance is another helpful metric to watch.
But arguably the best way to chart this trend, at least right now, is through FTX’s Top Altcoin index. This, and many other indexes, trade through a perpetual futures contract on FTX’s exchange, and they’re one of the most efficient ways to see how groups of cryptocurrencies are tracking.
[Video] BNN Bloomberg: Base Metals, Precious Metals and Energy
Whenever Frances calls to chat about the market, she knows she’s getting a yes!
Frances Horodelski and I have been doing this for about a decade, through multiple cycles. It’s always fun!
She was hosting a commodities-focused show today so we discussed Metals and Energy.
I think there is a lot going on in this space and it’s setting up for a big move.
We couldn’t help but talk Financials and Crypto, but it was mostly Commodities.
Hope you enjoy!
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