This is the video recording of our July 30, 2021, All Star Charts Crypto Weekly Strategy Session.
FOMO or Accumulation?
Inventories on exchanges fell by a whopping 60k Bitcoin yesterday following eight days of consecutive positive closes.
This is the second greatest negative net change in exchange balances of all time, just trailing behind the -70k change in May 2016, which preceded one of Bitcoin’s greatest bull markets ever: [Read more…]
Bitcoin’s Momentum Thrust
Bulls have certainly given the bears a run for their money this last week.
Bitcoin’s on the verge of eight consecutive positive days…
That’s impressive.
Don’t just take our word for it, look out how rare events of this magnitude have been, as marked by the green arrows:
No, Altcoins Don’t Need to Outperform
There’s a permeating myth that altcoins need to outperform Bitcoin for there to be a healthy bull market.
You’ll often hear claims like “the Ethereum/Bitcoin ratio is making new lows, so the market can’t go up.”
A similar notion gets thrown in the stock market, that if equal-weight S&P 500 is underperforming its cap-weight counterpart, breadth is said to be “unhealthy”.
Though, we’ve found that to be far from the truth.
In the case of crypto, there have been countless times where the relative leadership has not been in the altcoins, but yet the asset class did just fine.
Just a few short quarters ago, before the alt season kicked off earlier this year, Bitcoin was outperforming nearly every other major coin as seen by the continued progress in its market-cap dominance:
Leaning on Crypto’s Leadership
It’s fair to say that bulls scored some points in the last few days, with Bitcoin moving back up to the upper 30,000’s.
Throughout this recent rally, it was pretty clear that there was a lot of squeeze-action going on, as over $900M in Bitcoin shorts were liquidated in the last 24-hours…
Or as we like to say around here, from failed moves come fast moves in the opposite direction:
Just take a look at momentum registering its highest reading since April, following that notable bullish divergence…
It’s also constructive to see Ethereum holding its head above 2,250, which is been a critical long-term level: [Read more…]
[Crypto] Weekly Strategy Session – July 23, 2021
This is the video recording of our July 23, 2021 All Star Charts Crypto Weekly Strategy Session.
Gaining Exposure to Crypto Through the Stock Market
What was once peanuts, the total market cap of this asset class achieved the $2T milestone at its peak earlier this year.
It’s hard to believe, but there are literally several thousands of individual coins and tokens, and the list keeps growing every day.
Not only can we express our opinions in the coins themselves, but there’s an expanding list of pure-play stocks, ETFs, and funds being offered to investors, too.
So today, we’ll dive into some of these offerings, what sets them apart, and ultimately, how we’re approaching these vehicles in the coming weeks and months.
Evaluating Bitcoin’s Relative Trends
The strongest of assets will not only do well on an absolute basis, but they also tend to outperform their alternatives. In the case of Bitcoin, not only are we pressing against new absolute lows, but we’re seeing lower lows relative to other non-crypto-related assets.
This is NOT evidence of a healthy uptrend.
Relative strength is one of our primary tools as technicians.
The easiest way to go about doing this analysis is through relative ratio price charts.
Simply put, it’s a measure of a security’s performance relative to another. For this example, that’s displayed as being long Bitcoin in the numerator, and short an equivalent amount of US Dollars in the denominator.
When the ratio is rising, the numerator is outperforming the denominator. And when the ratio is falling, the numerator is underperforming the denominator.
Not only does this type of analysis allow us to evaluate the risk appetite of investors, but it also ensures we’re always positioned in the right areas.
So let’s dive through some of these cross-asset relationships to see how Bitcoin’s faring relative to other groups.
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