** *|MC_PREVIEW_TEXT|* | Good morning my tasty friends, I hope you'e all having a wonderful start to your weekend.
Crypto continues to chop it up, but I think there's a short-term bottoming process underway that's also supported by macro tailwinds.
Let's start with price action.
Over the past 1.5 months, BTC crash-corrected -37% off its all-time high, CoinMarketCap's Fear and Greed Index registered levels worse than post-FTX collapse readings, and sentiment went apocalyptic.
It's never easy, but historically these corrections are relatively normal. Sometimes there's an obvious catalyst, sometimes there isn't, but what we know for sure is the leverage building up into 126k has been flushed.
Now we're on the road to recovery. We're seeing both BTC and ETH put in a series of higher lows over the past few weeks, while volatility has come in meaningfully. On this surface this is bullish, though we need to retake 100k in bitcoin and 3,500 in ETH before we start talking about a trend shift.
Regardless, we are seeing bullish price momentum in ETH while Bitcoin has shifted from bearish to neutral. - As measured by exponential moving average crossovers on the daily timeframe. (Weekly momentum remains bearish). | | | As mentioned earlier this week on tastylive, if I had to pick one, I'd take ETH over BTC given its relative outperformance recently, and the bullish price momentum we're observing in ETH/BTC. | | | Elsewhere, there's emerging dollar weakness, we've got a dovish Fed, the end of QT, and the restart of treasury purchases targeting $40 billion of buying each month.
Additionally, a quick glance at the yield curve steepening also shows the market pricing in a more positive growth outlook. So, liquidity is coming back and the economy seems to be on decent footing, which should lend itself to the bottoming process we've alluded to in crypto.
Our market performance dashboard and volatility derived trading ranges can be found below.
As mentioned last week, recovery is a process, but as long as these price momentum signals hold, there's a real possibility we run at 100k as we head into year-end, assuming no volatility breakout in equities or the bond market.
Per usual, if you're taking trades at the bottom of the ranges, take some profits on short-term rips. We're not out of the woods just yet.
Keep your head on a swivel.
Stay tasty,
Ryan | | |
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