All Star Charts Crypto Articles

One of the key themes we've been monitoring in the crypto ecosystem is the movement to a new era dominated by an increasing number of derivative vehicles at investors' disposal.

In previous Bitcoin cycles, investors primarily moved to cash through selling spot.

Now, with a liquid futures market, savvy traders have been hedging their positions (today's equivalent of going to cash) by shorting calendar futures.

This constant selling pressure in calendar futures has driven the term structure lower over the last few months and is a reliable metric for both long and short time frame analysis.

What's the best crypto trade on the books right now?

For us, it's been pretty simple.

While everything else has been a complete mess, there's been one name that's really stood out on all of our scans.

You know what I'm about to say...

This is the video recording of our March 11, 2022, All Star Charts Crypto Weekly Strategy Session.

You hear that?

I certainly do.

"Chop, chop, chop..."

It's the sound of tilted traders getting chopped up.

It's a tale as old as time: people playing the market like it's trending, when it's nothing more than ping-ponging.

Price is in a really well-defined range, and there's no point getting hyped by any moves - up or down - before we actually get confirmation of a real break.

This approach of remaining completely neutral has done a great job of protecting us from the tilt of getting chopped up.

Just look at the recent price action.

It's refreshing when we finally have a potential breakout to talk about when the market's been a total mess over the last few months.

The crypto "new highs" list has been so quiet and empty that you can almost literally hear the tumbleweeds dancing.

But here comes Terra $LUNA trying to bring back some life into that list. Gotta respect that.

So, is this the real deal?

Are we finally going to get that setup we've been waiting so long for?

We really hate to sound like a broken record, but we want to be downright obnoxious in hammering this down.

There's no edge in pushing longs right now, seriously.

You can try all you want. But all you're doing is asking to get whipsawed and chopped up.

Scroll down to download this week's chart deck.

It's a tale as old as time, traders pushing their opinions onto the market and not adapting their approach for different environments.

Trend-following strategies worked great in 2020 and after the summer bottom last year.

But now? Not so much.

Forget about headlines, opinions, or gossip. It's all noise.

Money is the only thing that moves markets. Follow money flow.

And what's the tape saying?

Downtrends and ranges everywhere. That's the tale for not just crypto, but macro too.

Over the last few months, we've continued to hammer the point that the market is a mess and trading should be kept to a minimum.

We've taken shots at small long trades in a few altcoins during this time, only for us to ultimately get chopped up days after putting the positions on.

This is information.

Crypto as an asset class is range-bound at best, and unless you're incorporating a staking/yield/options strategy, the vast majority of crypto traders have been better off positioned in stables on the sidelines.

The macro environment continues to be heavily driven by geopolitical volatility and the situation in Eastern Europe.

Parabolic commodity prices are beginning to take their toll on the broad market indexes, which Bitcoin and crypto have been correlated with in recent months and quarters.

Moreover, whales and savvy traders are still in the process of selling.

This is the video recording of our March 4, 2022, All Star Charts Crypto Weekly Strategy Session.

Since November, the market has been grinding lower, and most cryptos find themselves in 50%-plus drawdowns.

There's no other way to put it: The altcoins have been bruised and battered.

It's at these stages of the market cycle that we analyze the names in the shallowest drawdowns.

When everything else is down the dumps, the few names that have bucked the selling pressure, and are even pressing against new highs are likely your next leaders when the broad selling subsides.

This is exactly what we've done.

We've filtered our universe of cryptos (all coins above $500M in market cap) by their drawdown from 52-week highs as well as their respective performance from Bitcoin's January lows and since war broke out between Ukraine and Russia.

Here's a snippet of the top 10 strongest names by drawdown from their respective 52-week highs:

You can download the full scan below:

Since last week's report, war has broken out between Ukraine and Russia.

This has been the dominant driver of recent price action in risk assets, Bitcoin and crypto included.

We're still positioned heavily in cash, with little crypto exposure.

Particularly with the geopolitical volatility we've seen over the last week and the resulting impact on global markets, this remains an aggressive tape to be actively trading.

Sitting out remains the most prudent option for the vast majority of traders.

This is the video recording of our February 25, 2022, All Star Charts Crypto Weekly Strategy Session.

Today, Russia began its invasion of Ukraine. Markets, unsurprisingly, have reacted negatively, with Bitcoin no exception.

Particularly in times of geopolitical uncertainty that can induce this type of volatility, it's vital to be clear on your strategy.

Managing risk, having invalidation levels, and understanding your risk tolerance are considerable advantages.

As for how we've been approaching the market, it's been a mess.

Monday's note captured our approach.

When Bitcoin lost 41,000 last weekend, all bets were off, and we moved to cash.

There's been no edge in pushing crypto longs, even before the geopolitical volatility we've seen over the last 24 hours.