With Bitcoin $BTC and Ethereum $ETH reclaiming their prior-cycle highs, we even went as far as arguing that this recent move represents a structural regime shift for the asset class.
In our view, both the short and intermediate-term trends have now definitively shifted higher.
This comes within the context of a slew of risk-on developments in traditional markets.
Bitcoin had its best week in two years, with the orange coin rallying 22%. Many coins followed suit, with names like Solana gaining a whopping 60% last week.
These stories allow their mind to wander from busy thoughts into an adventure. It provides a comforting reality and a narrative they can consciously control.
Comically, in this sense, children and investors are more similar than we let on.
It's just that one obtains comfort from an adventurous tale while the other derives solace in news headlines.
Don't get me wrong, I'm not saying this is bad or wrong. I'm just noting its existence.
The vast majority of investors need to understand why a stock is moving rather than solely following technicals and money flow.
Over the last week, we've seen momentum flow down the cap scale in crypto markets. Many altcoins have posted sizeable gains coming from historically skewed levels.
This is happening in the context of a tightening volatility regime, where price stability in Bitcoin, Ethereum, and most alts were at some of the highest levels in recent history.
When did the NYSE new highs list peak? When the dollar bottomed...
When did equities bottom? When the dollar rolled over...
It's not rocket science.
I don't care why it's the case because the correlations are so evident. It's a fundamental reality in this tape: A weak dollar is positive for stocks and crypto, while a strong dollar pressures those assets.
Now, consider: What have been the defensive assets in this market?
The Japanese yen? Nope.
Gold? Not until recently.
Bonds? Hell no.
Whenever shit's hit the fan, that money has flowed into the US dollar.
