Welcome to the another edition of CryptoKoryo’s Premium newsletter “Ten_x_Alpha”.
We cover here in the most exhaustive yet the most dense format everything you need to know to take action and make profits.
Given yesterday’s price action, in this edition we will go deep on the market analysis. This was probably a first flush in the new bull market environment we are in and it’s important to be prepared for the next ones.
I’ll share:
Few indicators to watch regularly to detect local tops.
Insights about on-chain activity
The state of the market as seen by my system
Actions to take today for your portfolio
A new trend you can’t ignore
Intro
Yesterday I wrote about time-sensitivity vs price-sensitivity. You can read it here.
The ups and downs in the markets have a lot of analogies in the nature. Mountains, waves, breathing, weather, etc.
Therefore, they also obey to the laws of nature. Let’s take breathing for example.
Anyone who has ever done Pranayama breathing exercises knows how complex the breathing patterns can get. It’s not about inhaling (trading analogy: price going up) or exhaling (going down). You can also retain and sustain (accumulation) after inhaling/exhaling.
Depending on your level, you can inhale or exhale for longer periods, but one thing is certain. You can not fight the laws of nature. This means:
Any inhalation (rally) should be followed by an exhalation (correction)
No matter how good you are, an inhalation can not last forever. Supposing a maximum inhalation of 5 minutes, the more time passes in the inhalation process, as we approach the 5 minutes, it becomes evident that we are getting closed to the end and exhalation should follow.
Crypto trading is exactly the same. In a bull market, the duration and strength of inhalation part is higher, with short exhalations as a reset. And vice-versa for the bear market.
Now, the question is how to know where is the max. How to find that equivalent of 5-min inhalation in the market?
The good news is, with a data-driven approach to the markets, it’s possible to know where the max is and it’s also possible to know how far we are from it.
Of course, we have to think about it in probabilistic term and not absolute terms.
Now I’d like to present few metrics I personally use. Then we analyze what they were saying before yesterday’s pullback and present tips on how to use them in the future for the next 2 years.
Finally we conclude with portfolio updates and present new alts you might want to allocate to.