Unbothered, Moisturized, In My Lane, Flourishing

Crypto Twitter is finally fun again. The lonely bulls have emerged from the woodwork and joined forces to re-assert dominance over the bears. But as I wrote about recently, CT sentiment is often not the best gauge of where prices are going.

Right now, consensus seems to be that BTC continues to march higher. And as much I would enjoy that, we need to entertain all possibilities — open ourselves up to various perspectives. The Crypto Fear & Greed Index has jumped up 20 points in a week. Now, the index isn’t perfect, but it is useful when you tie it into historical price action. The last time the F&G was around this level was Nov. 2021.

Source: https://alternative.me/crypto/fear-and-greed-index/

BTC is undoubtedly driving the market, as it always has. BTC dominance is on the rise, which is an early sign of an emerging expansionary cycle. BTC dominance tends to rise well into a bull market, only starting to reverse towards the last few innings when risk appetite is at its highest and people are rotating to assets further along on the risk curve.

All of the pieces seem to be in play for a volatile 2024 (both price and emotions). Personally, my conviction in crypto remained strong through Terra, FTX, and all the other blow ups. So this is simply confirmation that the market is moving in the direction of my conviction — not something that spurs further action for me. But that isn’t the case for everyone. And environments like this, characterized by heightened hopium and smooth daily candles upward, tend to skew people’s perception of reality.

Your plan may be to buy lower highs on the chart — but can you resist the FOMO to sling bids at resistance?

Now, I’m not a markets nerd like Jason or Kevin. But from my amateur-ish line drawing abilities, I have been watching a few key levels marked by vital monthly/weekly pivot points and volume profile analysis. And we are pretty much hanging at an important level of resistance. Now, whether you agree with my levels is a bit besides the point. But if you do agree, does it seem like a good idea to give in to the FOMO and ape in right this moment?

There are two choices for an abnormally rational person: wait to see if it dips and buy the leg lower, or wait to see if it consolidates above resistance and buy the re-test of this level (as support). There’s a common theme between the two options — waiting. And most times it’s your best option.

You would be hard pressed to find someone more consistently bullish than me — something my colleagues at Delphi can attest to. And I do believe crypto, at large, is going (much) higher. But if I was primarily in cash/stablecoins right now, I would not be looking to deploy right at this moment.

If we were to survey the graveyard of washed out crypto investors, I suspect a common theme amongst their answers to “what would you do differently” would be along the lines of “discipline, patience, resist the urge to FOMO”. This is of course a double edged sword given the number of people that have 10x or 100xed a position from mindlessly aping into the flavor of the month. At the end of the day, an investors appetite for risk and ability to stomach volatility plays a key role in whether short-term plays like this are viable.

My point here is simple: don’t let broad sentiment from CT influencers and retail degens sway you too much. Try to be like this dog.

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i don't believe in the fear & greed index at all. it was at basically 0 for the entirety of the end of 2021 through all of 2022 and we just went straight down the whole time

I think if you're dissecting the methodology to understand it, it makes sense. I can't share charts here but the f&g was fairly high for a chunk of 2021 and then dipped hard mid year. 25% of the index is calculated based on volatility. At-the-money IV for 1 month options on BTC dropped from 120 points to 70-80 over 2 months.

That drop in IV and the f&g was also accompanied by the dip from $64k to $30K before going for the double top post Elon-induced euphoria.

Again, clearly has its flaws so i dont completely disagree. But i dont think its useless either.