There's been so little to discuss in the way of data points that'd pull us from the doldrums.
Strazza sent a brief note in our Slack chat to ask how many cryptos were below their June-July lows. This is when things were at their worst -- 3AC just got margin-called, and there were mass liquidations.
Upon quantifying this, only 4% of our universe of 316 coins are below their closing June-July lows.
Recently I've been listening to a wider variety of music than I have in the past. It's by design.
Each week, I've assigned myself a little goal to listen to a new album. I set aside a few hours to actively listen and immerse myself in the music -- to relax, of course, but also to consider the themes and overall messages artists are trying to convey.
It's been fun, and I'm enjoying it immensely. And it's also helped me become a better writer and opened my outlook on life more broadly.
Music is powerful. I can't imagine life without it. And one particular track from my personal list of top 10 classic hip hop pieces of all time has been stuck in my head all day.
Yesterday, we identified a number of developments in crypto and in old-school markets, suggesting it's time for buyers to step in if further damage is to be avoided.
While Bitcoin is in the process of testing support, we've seen some short-term signals of strength within the altcoins. This is a positive, but crypto assets need legacy markets to bounce here if this recent strength is to persist.
If equities can’t begin to build a bullish shape right here and now, we expect further downside. Recent US dollar strength likely needs to subside, too.
So, with our stage set, let's look at it through a more actionable lens.
What are the setups? What are we buying? What are we selling?
This market hasn't thrown us much in the way of productive data points in recent months.
"Messier for longer" has been and continues to be our prognosis for crypto right now. Last Monday, we concluded by arguing the following:
Following Bitcoin’s sell-off, this seems like a logical place for the crypto complex to bounce or at least chop for a few weeks, especially given stretched sentiment in the futures markets.
Because the probabilities of short-term longs are rather low given the macro backdrop, we’re not going to get overly cute and tactical trying to define a setup at this support.
The higher-probability outcome appears to be further chop.
In other words, it’s just more of the same.
There haven't been any significant developments that'd sway us to carry a more bullish tone.
Bitcoin and the vast majority of the asset class are still chopping about, while macro markets have been dragged down in the most recent risk-off move within the context of a strong dollar.
Getting a fresh batch of monthly candlesticks has to be one of our favorite elements in our process.
Being forced to zoom out provides us with the insightful context of what truly matters -- the primary trend.
Remember, a lot of the work we do is simple trend identification. Instead of trying to catch the uncertain market top/bottom, we're always looking to position ourselves in the path of least resistance.
Trying to catch and time market extremes is difficult and it comes with a great deal of uncertainty.
Understanding market structure, on the other hand, will give you a great deal of conviction in your overall outlook.
One of the hallmarks that's defined crypto is its sheer innovative and scalable nature.
Blockchains are bringing tremendous benefits to traditional industries; self-sovereignty of massive sums of capital, incredibly efficient payment methods, digital collectibles, play-to-earn, and decentralization are all great examples.
Perhaps one of the more overlooked outcomes of this asset class blossoming is the promotion of finance among disenfranchised youth.
We hate to sound like a broken record. But "patience" is the name of the game in a tape like this.
Looking at the asset class from the top down, it's clear we're still in the basing process. There is perhaps no better visualization of this dynamic than our broad-based altcoin index.
Incorporating just over 300 coins, this equally weighted index tracks all USDT spot pairs on Binance, adjusted for stablecoins, leveraged coins, and other outliers.
Over the last two weeks, we've made the case for short-term caution and patience. This approach has proven timely, with Bitcoin correcting 20% over this period.
As it currently stands, Bitcoin lies on a shelf of support near its most recent pivot lows, around the 18,000, 19,000 neighborhood.
Bearish sentiment seems to be approaching extreme levels, with both Ethereum and Bitcoin quarterlies trading backward.
At the same time, the macro backdrop continues to be a risk-off picture.
The S&P 500 has lost a key level of support, while the US dollar, interest rates, and crude oil all look prime to begin a new leg higher.
There's nothing more annoying than a stubborn injury that just won't go away. All you want is to exercise or to play a sport, but you're just physically unable to do it.
Among high-level athletes, there are countless stories of seasons, careers, even livelihoods lost due to injury.
I'm quite possibly the furthest thing imaginable from a high-level athlete, but I have been dealing with a minor shoulder injury of my own.
I'm working with physios to get some mobility on my left shoulder back so I can finally make use of the home gym I've recently built in my garage.
It certainly wasn't an acute injury, more of a cumulative thing worsened by living a lazy university student's life. And it's correctable. It might not be easy, but it can be fixed.
There are many types of injuries, some the consequence of normal use, some that stem from genuine human error.
