All Star Charts Crypto Articles

Regardless of the market environment, we always want to be pushing our bets on secular leaders.

The most effective way of positioning ourselves with the strongest (or weakest) names is through relative strength analysis - by simply comparing names to their counterparts.

So before we dive into all some of the names we're buying, let's address where this space finds itself, and what we're anticipating in the coming weeks and months.

This is the video recording of our July 30, 2021, All Star Charts Crypto Weekly Strategy Session.

Bulls have certainly given the bears a run for their money this last week.

Bitcoin's on the verge of eight consecutive positive days...

That's impressive.

Don't just take our word for it, look out how rare events of this magnitude have been, as marked by the green arrows:

There's a permeating myth that altcoins need to outperform Bitcoin for there to be a healthy bull market.

You'll often hear claims like "the Ethereum/Bitcoin ratio is making new lows, so the market can't go up."

A similar notion gets thrown in the stock market, that if equal-weight S&P 500 is underperforming its cap-weight counterpart, breadth is said to be "unhealthy".

Though, we've found that to be far from the truth.

In the case of crypto, there have been countless times where the relative leadership has not been in the altcoins, but yet the asset class did just fine.

Just a few short quarters ago, before the alt season kicked off earlier this year, Bitcoin was outperforming nearly every other major coin as seen by the continued progress in its market-cap dominance:

This is simply calculated by evaluating what percentage of the total cryptocurrency market-cap Bitcoin represents. So when this...

It's fair to say that bulls scored some points in the last few days, with Bitcoin moving back up to the upper 30,000's.

Throughout this recent rally, it was pretty clear that there was a lot of squeeze-action going on, as over $900M in Bitcoin shorts were liquidated in the last 24-hours...

Or as we like to say around here, from failed moves come fast moves in the opposite direction:

Just take a look at momentum registering its highest reading since April, following that notable bullish divergence...

It's also constructive to see Ethereum holding its head above 2,250, which is been a critical long-term level:

Seeing buyers dig in where they needed to is a great sign of much-needed progress for this beaten-up asset class.

But, there's still work to be done.

Particularly in the short term, Bitcoin is still trapped beneath...

This is the video recording of our July 23, 2021 All Star Charts Crypto Weekly Strategy Session.

Bitcoin's now on the cusp of losing this critical 30k level we've been hammering the table on for the last month.

As it stands, there is nothing attractive on the long side right now:

We often preach to wait for your perfect pitch. That is, to trade well, not often, when the competitive edge is in your favor.

We took a few shots on the long side where the risk-versus-reward was in our favor. But the real winning trade has been cash.

If this isn't the best example of a "go fishing" market, I'm not sure what is...

Along with Bitcoin, here's our Top 5 Crypto index pushing against this critical 100 level.

You often hear in the stock market that "Cash is King."

Of course, in the world of Crypto and DeFi, it could be said that "Tether is King".

There's a lot of big players in other asset classes, that as part of their mandate, can't sit in cash. The majority of investors, particularly in this space, do have that option. So why not use it?

You’re going to see a lot of the crypto community advise against cash. “Market sell-offs are an opportunity to buy more at lower levels”, they say. “You’re not disciplined or smart enough to get back in”, they preach. "Just HODL and diamond hands, bro".

It’s all based on this meme that the market always goes up. I guess if you trust data based on the tiny sample sizes that we have in this young asset class, you’ll believe anything.

But ultimately, the point of the matter is that there's no real directional bias right now.

This is the video recording of our July 16th, 2021 All Star Charts Crypto Weekly Strategy Session.

We've made our thoughts pretty clear these last few weeks: The bias is higher for Bitcoin if it's above 30,000.

But while we're waiting for bulls to reassert control, it's been messy and choppy out there.

Many of the names we've been taking shots on the long side have fallen back below their risk level, to then aimlessly meander. Neither breakouts nor breakdowns are following through. It's ultimate indecision at play...

This is such a prevailing theme right now in the near term that even though we've been hitting on it a lot recently, we want to be downright obnoxious about it.

Until Bitcoin can pick a direction, buying any Altcoins on the long or short side becomes infinitely more complex.

Just take a look at how few outliers there have been from this mess recently. More or less every coin (above $1B in market-cap), is being heavily anchored down by this messy action in the major coins:

We like to play devil's advocate by constantly questioning our underlying macro thesis.

One of the many ways we do this is by posing an alternative scenario from which we think is the higher likelihood outcome.

So let's run through this brief exercise...

Which will it be for Bitcoin?

Is this is an epic head & shoulders topping pattern or an accumulation period for the next leg higher?

Technical analysts often say, "From compression comes expansion."

In other words, as markets become more coiled, buyers or sellers are ultimately forced to front up. This period of shrinking volatility is often met with violent unwinds - in either direction.

So when we see these periods of notable reductions in volatility, pay attention because the resolution often sets the tone for weeks and months to come.

Just take a look at how tight the Bollinger Bands have become in Bitcoin:

Through this measure, volatility is at its lowest point since October last year...