All Star Charts Crypto Articles

This is the video recording of our February 24, 2023, All Star Charts Crypto Weekly Strategy Session.

Equities had their worst session of the year yesterday, as the S&P 500 retraced 2% during the day.

This comes as rates and the US dollar push higher, with the yield on the 10-year US Treasury note making fresh three-month highs.

Surprisingly, Bitcoin seems to be bucking this recent selling pressure, and the short-term correlations between stocks and Bitcoin have flipped negative for the first time since the FTX fiasco.

During that period, Bitcoin crashed to its cycle lows of 16,000, while equity markets were hammering out their most recent bottom.

We're seeing more breakouts as the weeks go by.

And we're not talking about the kind of random pumps-and-dumps that happened throughout last year.

It's quite the opposite, actually.

Many coins have gone absolutely nowhere for quarters and are only now beginning to test the upper bounds of these long-term ranges.

Although this period has been incredibly lackluster in the number of directional trade ideas, the flipside is that many coins have had ample time to carve out long-term bases.

Like we always argue around here, we're better served by keeping it simple.

If this is truly the beginning stage of a new crypto bull market, buying resolutions out of these basing patterns will be a great strategy for the months and quarters ahead.

Last week, we saw bulls step in to defend critical short-term levels of interest.

Bitcoin closed the week up 11.50%, while Ethereum posted an 11% gain. With much of this historically choppy month behind us, these markets are pushing to the upper bounds of their long-term ranges.

Further, the S&P is coiling right beneath resistance near 4,100.

This is the video recording of our February 17, 2023, All Star Charts Crypto Weekly Strategy Session.

Different market environments are conducive to certain scans and less so to others.

Coming off this perilous winter, strategies identifying short opportunities have been greatly rewarded. And, throughout the pandemic, it was the complete opposite.

Like we said in yesterday's note, half the battle is in understanding how to directionally position in the underlying trend. The simple fact of that matter is that many have been caught offside betting against names in substantial drawdowns.

Names like Coinbase, Marathon Digital, and, most recently, Silvergate have all sported notable short interest coming off this bear market.

Identifying this skew, we reintroduced our Freshly Squeezed scan. The idea is rather intuitive; we're simply looking for stocks that people are betting against. When a stock is heavily shorted, we know there are incremental buyers waiting in the wings.

As Strazza said in the latest Freshly Squeezed report,

We love this as new buyers are the one true catalyst for higher prices. When shorts are proven wrong, they have to buy their shares back to close out their...

You heard the news?

It's a bull market in the world of crypto.

It's been a minute since we've been able to say that, amiright?

But let's face it.

We're seeing these coins thrust to new quarterly highs, hitting overbought conditions in the process.

At its peak a few weeks ago, approximately 70% of our universe hit overbought conditions, while three-quarters of all coins reclaimed their 200-day moving average.

This is within the context of these coins coming off 80%, even greater than 90% drawdowns.

Doesn't sound bearish to me.

In fact, it's quite the opposite.

We began last week arguing the case for short-term patience while emphasizing that the primary trends have shifted higher.

As we move into the middle of February, seasonality trends suggest a choppy couple of weeks ahead.

At the same time, momentum in the US dollar has accumulated in recent days, as we observe some mild selling pressure in crypto markets. With the CPI release on Tuesday, it's reasonable to expect this volatility to continue.

This comes as Bitcoin retraces following its first retest of the August 2022 highs.

This is the video recording of our February 10, 2023, All Star Charts Crypto Weekly Strategy Session.

Have you figured it out yet?

Is Bitcoin about to roll over here?

Or are we flagging before the next run-up?

The beauty of this game is that we don't need to predict the future. Instead, we can rely on price action to dictate our execution.

In this case, we're waiting to see how Bitcoin reacts to all this overhead supply before committing to any new longs.

And, on the contrary, if we see a resolution out of this range, or if we see weakness in the coming weeks, we'll be loading up on some positions.

So, in the case that we see some selling pressure come in, where do we want to be positioned?

They teach you this stuff at technical analysis kindergarten.

Buy support.

Sell resistance.

Of course, in the real world, with our primitive monkey brains, implementing this into a trading system is easier said than done. Just take a look at the squeeze you're seeing in real-time in all these beaten-up growth stocks.

The permabears started shorting these names in droves when they'd already slumped into 90% drawdowns.

Talk about a reckless strategy...

When we look at the most heavily shorted stocks, Coinbase stands out with a short interest of almost 30%. With clear levels and a favorable risk/reward, we leaned on COIN as a vehicle to profit from the short squeezes taking place in recent weeks. We're seeing them all over.

Seriously, go through some of these charts.

Carvana, Tesla, and AI are all great examples -- these moves are no joke. Bed, Bath & Beyond was up over 90% yesterday!

This isn't 2022.

You can pretend like nothing's changed, or you can get to making money on the long side. Those who don't mold their strategies...

Over the last week, we've seen some mild profit-taking, with Bitcoin and Ethereum chopping around following retests of critical resistance levels.

Our thesis remains that a structural shift has occurred, with the short- and intermediate-term trends now higher.