It takes time to learn the intricacies of a topic.
For those who've spent a good deal of their career working with other asset classes, the lingo that youngsters throw around while discussing their favorite crypto projects can be daunting.
There are dozens of indicators you've likely never seen.
People are sharing charts where you may not even know what's going on.
And there's arguably more noise to deal with in this space, more so than any other group of assets.
But I think we can all take solace in the fact that no one is a complete expert in this stuff.
You guys see that massive spike in inflows of Tether into exchanges?
Exchanges just saw their 3rd largest inflow of Tether of all time (and by all time, we mean a few years - this is Crypto we're talking about).
The thought process here is that if people are transferring their Tether into exchanges, they're getting ready to load up on these crypto-assets, driving prices higher.
The last time an inflow of this magnitude took place, Bitcoin nearly doubled in a matter of weeks.
It's shakeout city in the world of Cryptocurrencies right now.
Failed breakdowns. Bull hooks. Bear traps. Call them what you will, as it's not the nomenclature that matters, but instead the mechanics of these formations which often result in swift moves in the opposite direction...
And these failed breakdowns aren't just taking place denominated in US Dollars, but we're also seeing this exact behavior in coins relative to Bitcoin.
Following Bitcoin's bounce back these last few days after some sustained selling, there's plenty of failed breakdowns out there in the Crypto space right now.
In essence, when price undercuts its former lows, stop losses get hit, and longs throw in the towel. At the same time, bears heavily jump in and enter short.
Then as the market begins to rally back above those former lows, shorts are now underwater, and they're forced to cover. While they're buying back their positions to unwind the trade, longs see price on a tear higher and fold into buying back their old position. Momentum traders see these gains and jump on the bandwagon too, forcing even more shorts to cover.
In every major asset class, there are typically a handful of indices to help drive our decisions from the top-down.
Whether we're looking at the US Dollar Index, the CRB, the Nasdaq, or any other variety of ETFs, these help form the basis for identifying leaders, laggards, and assessing the overall market.
The same applies to Crypto.
The only problem is, there's a painful lack of diversified indices to look at in the first place; S&P Dow Jones indices launched a Mega-Cap Crypto index in May, which only tracks Ethereum and Bitcoin, and MSCI is currently eyeing launching indexes of their own.
But that's not to say that there are NO opportunities; it just simply means they're harder to come by, and the probabilities of success have lowered significantly.
Despite all this messy action, we've still had a handful of trades really go our way on both the long and short sides. Buying the leaders, and selling the laggards - despite how oversimplified it may sound - is as prudent of a strategy in this environment as any other.
This chart does a great job of boiling down how we're approaching this market:
These crazy Bitcoin "HODL'ers" and "Laser Eyes" people must be going nuts right now.
Apart from a few exceptions in shorter time frames, there's been a painful lack of real opportunities floating around in this space recently, both on the long and short sides.
Breakouts are failing, and breakdowns aren't doing much either.
Legendary trader Paul Tudor Jones once said that "Markets only trend about 15% of the time, the rest of the time they move sideways."
As aggressive as trends can be in Crypto, we need to respect that markets simply need to repair their damages and reload for the next move.
In the context of Bitcoin's 200-day moving average, once price slips below it, it tends to stay below for some time - especially after prolonged periods of it remaining above.
