Ouch. Crypto's Next 30 Days
A (Mostly) Stats-Based Look At Bitcoin & Ether Over The Next Month
IN TODAY’S REPORT
What we cover: TECHNICAL ANALYSIS Edition. Despite everything. Firehose report. BTC & ETH STRETCH % Stats. Consecutive days down. Looking 30 days out. Final thoughts.
Despite This Despite That
Despite constructively consolidating since March…
Despite a recent selloff / reset / recovery…
Despite new TradFi spot ETF onramps into crypto…
Despite crypto now a U.S. election issue…
Despite stats continuing to point north on all recent queries…
Despite this despite that, despite despite despite.
Despite everything, Bitcoin sold off surprisingly hard while Ether got unequivocably smoked in today’s brutal session.
There are sooooo many items worth discussing today. Arguably, too many. For this reason, I’m going to look at many sides of the crypto diamond in today’s report with a mix of comments, stats, and with a glaring lack of artful language. In short, today’s report is more of a data firehose than our usual hand-holding guide.
You ready? Let’s go.
ETHER (ETHUSD). Daily Chart w/ REKTelligence STRETCH % Indicator and 4yr MA.
Ethereum tested its rising 4-Year moving average (4yr SMA) overnight, an average it has held in general terms previously in this cycle.
The REKTelligence STRETCH % indicator measures the distance of price from its 20-day moving average. Having fallen into the 20% - 30% zone below its 20ma (see yellow box within green highlight on chart), ETH now sits in a zone which has seen plenty of lows established in the past. Note that ETH’s current STRETCH % level is at the "shallow end of extreme” and by no means guarantees that the #2 crypto asset has put in a major low. Rather, it’s simply an increased probability, technically speaking.
TAKEAWAY: Now in the proximity of its rising 4yr MA and stretched below its 20ma, Ether may now be better positioned to establish a local low.ETHER (ETHUSD). HYPOTHETICAL QUERY RESULTS. Inception - Present. $100k per trade.
Here are basic query results for the following conditions:
[1] Ether’s STRETCH % = > 25% below its 20ma, and
[2] Ether’s 365sma is rising.
HOLD TIME = Exit in 30 days.
TAKEAWAY: Few instances, yet strongly positive expectation with a 30-day hold.BITCOIN (BTCUSD). Daily Chart w/ One Year Moving Average (365ma) & STRETCH %.
In contrast, Bitcoin’s STRETCH % is nowhere near a historical extreme reading, though some lows have been established at similar levels (currently 15.9% below its 20ma).
TAKEAWAY: Bitcoin's STRETCH % is not anywhere approaching extreme following today's session, but the king crypto did hold its one-year moving average.BITCOIN (BTCUSD). HYPOTHETICAL QUERY RESULTS. 2011-Present. $100k per trade.
Here are basic query results for the following conditions:
[1] Bitcoin’s STRETCH % = > 15% below its 20ma, and
[2] Bitcoin’s 365sma is rising.
HOLD TIME = Exit in 30 days.
TAKEAWAY: Sixteen instances with negative expectation with a 30-day hold.ETHER (ETHUSD). HYPOTHETICAL QUERY RESULTS. Inception - Present. $100k per trade.
Here are basic query results for the following conditions:
[1] Ether closes lower for 7 straight days.
[2] Ether’s 365sma is rising.
HOLD TIME = Exit in 30 days.
TAKEAWAY: Only 5 instances with slightly positive expectation despite winning percentage (percent profitable) below 50%.BITCOIN (BTCUSD). HYPOTHETICAL QUERY RESULTS. 2011-Present. $100k per trade.
Here are basic query results for the following conditions:
[1] Bitcoin closes lower for 4 straight days.
[2] Bitcoin’s 365sma is rising.
HOLD TIME = Exit in 30 days.
TAKEAWAY: Roughly 50/50 probability in terms of percent profitable, but positive expectation with an arguably impressive Profit Factor for this many hypothetical trades. BITCOIN (BTCUSD). QUERY RESULTS. Hypothetical Trades. 2011 - Present.
Here’s the same query with an extra condition also matching current conditions:
[1] Bitcoin closes lower for 4 straight days.
[2] Bitcoin’s 365sma is rising.
[3] Bitcoin closes >= its 365sma.
HOLD TIME = Exit in 30 days.
TAKEAWAY: Slightly improved results revealing that only 10 trades in the previous query occurred when Bitcoin was below its rising 365ma. Apparently, this is a fairly common occurrence, and reasonably bullish. Great Profit Factor. This report is part of my trading / investing discipline.
Hopefully by helping myself answer some of these questions (i.e., running queries) — especially in times of distress — I’m helping others make sense of this remarkable teenage asset class in the process.
Is this you? Feel free to reach out. I do custom queries on equity and crypto markets and other financial market-related consulting work. You can also just say hi. Email me anytime at rektelligence@proton.me
Also, I enourage all to share today’s report with anyone who might be interested. TYVM.
Until next time, get good sleep, breathe deeply, and stick to your discipline, friends.
peace_love_crypto-DB
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