Market Update 4/22

For the rest of this market update, please see our weekly premium subscription. The premium subscription includes:

• Our weekly review of current crypto market risks and opportunities. It’s the same process we use to maximize our returns. In the past it has helped us do things like:

  1. Buy crypto at the bottom of the last cycle

  2. Sell crypto near the top of the last cycle

• This process uses economic conditions, on-chain metrics & technical analysis

• You also get our current crypto portfolio and recent transactions

Our investing style and how we use the notes below

• We tend to do most of the buying in the bear market, and may make some additional bull market purchases if there is a heavy dip

• We do all of our selling when we think risks have risen enough that we could be near a cycle top

• How we use the information below

  • Macro and liquidity is the foundation for the crypto rally. If it continues to be supportive then we stay bullish

  • Other sentiment, on-chain, flows, and technical analysis are used to navigate critical short term moments (e.g., if we’re close to a top)

Macro - Longer term bullish, shorter term potential for challenges

• The US economy appears to continue to be strong

• Liquidity has hit an air pocket, possible crypto could be under pressure as a result. We think this has explained some of the recent bearish price action that has been seen

• Over the longer term, its our belief that the liquidity cycle isn’t over yet and still has room to grow so we’re looking to stick with crypto until we advance further in the liquidity cycle

Sentiment - Has cooled off, which is good. Too much bullishness creates more risk

• Sentiment on crypto twitter is a lot less bullish than it was before

• Google searches are down from their recent highs

• Crypto fear and greed index is down to 62

• Meme coins like WIF and PEPE have cooled off some and are in downtrends

On-chain and Flows - Some values were concerning, but have since cooled off

Note: You can find these metrics online if you want to follow along

• Some on-chain and flow metrics aren’t concerning and look healthy

  • MRV Z-Score

  • NUPL

• Other on-chain metrics reached levels that could be concerning but have since cooled off

  • 1+ year hodl wave - HODL wave decline is slowing down, which usually is a concern, but this has happened before in the 2013 / 2014 cycle between peaks

  • Thermocap multiple - Has come down some, though was at concerningly high levels

  • Given that the liquidity cycle likely isn’t over yet, not overly concerned about these

• Bitcoin ETF inflows - Have leveled off as price has

  • Hint: Etfs having a meaningful impact on price, and etfs are likely to increase correlation with traditional markets

Technical analysis - Only risk area continues to be the elevated rsi for Bitcoin. This poses a risk for a mid cycle correction, but as long as Bitcoin continues its bounce nothing to be concerned about yet

• Bitcoin 2 week RSI has come down some. But not so much that it means we could be looking at a midcycle top just yet. If it continues to fall though its something we should be concerned about

Current crypto portfolio and transactions

BTC 35%

ETH 16%

Dogecoin 37%

Carefully selected NFTs 12%

No new purchases or sales were made in the past week.

Despite some concerns about a potential pull back, we won’t be selling because the economy appears to be supportive of a longer term bull run.