It’s that time again — monthly candlesticks!
Longtime readers know how much we love new monthly candlesticks. They force us to zoom out from the day-to-day noise and focus on what’s really taking place.
In the case of Bitcoin $BTC, it can’t get any more defined than 30,000.
Remember this time last summer when we were obnoxious about this level every week?
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Lost Password?This was a little less than a year ago:
Is the summer of 2022 about to be the same?
If it isn’t and Bitcoin loses 30,000, we expect to see 20,000 pretty fast.
That scenario would be an excellent level for us to load up on some long-term spot.
But that raises the question, how are we trading the current situation?
For us, it’s as simple as owning Bitcoin above 30,000 while shorting/not owning it below there.
We’re keeping it extra simple and leaning only on Bitcoin for any crypto exposure right now. Most altcoins are still messy, on both absolute and relative bases.
Objectively speaking, sometimes the best trade is to walk away. It might not make you the most money. But it will lose you the least.
You don’t need to look at many charts to see it.
This index created by FTX that trades as a perpetual futures contract does a good job of representing the alts. In the bottom pane, we’re comparing it to Bitcoin, which you can clearly see is winning:
Unless we see this hook higher above this broken support, we’ll be looking to add alt exposure. But the conditions haven’t presented themselves, at least for now.
And this isn’t anything out of the ordinary.
If Bitcoin is going to dig in and find support, it and the large-caps have a tendency to lead in the early stages. It’s not until the late stages of bull markets where you get that crazy outperformance by alts.
So let’s keep it simple.
Own Bitcoin above 30,000. Don’t own it below there.
Given the way risk assets have recovered in recent weeks, it only brings further bullish confluence to Bitcoin bouncing here.
Weekly Chartbook
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Please reach out if you have any questions about today’s note.
Allstarcharts Team