It really looks like game over for crypto. Hear me out.
Last week, I wrote a post about how I’m turning bearish. I’m out and even a little short. It’s been going well.
Then last night, Trump tweets about the crypto reserve and sets the whole space on fire.
Cardano is rallying 60%, and I’m sitting in my office preparing a list of things I need to see to turn bullish again.
But by the time traditional markets opened today, it was clear this move was a head-fake. It was more of the same.
Despite the bullish headlines, all the Sunday fireworks would be erased.
We’ve already discussed the sentiment of the asset class and how cryptos have reacted to news lately. It’s a big part of my bearish thesis. But, this is a new low.
Think about it.
Crypto was public enemy number one just last year.
Now, we don’t just have a friendly and favorable regulatory environment, but the US government is literally flipping the book long. They are buying Bitcoin. They are even buying trashy alt-coins, apparently… maybe.
The problem is, you can’t top this from a newflow perspective. There is no greater bullish catalyst. This is the peak. So, those fireworks better count… And they didn’t.
They couldn’t even rally the space on the best news in the history of crypto. It will be a long time before there is a better headline than this.
The way I learned it is… if it can’t go up on good news, it’s bad news. That’s the state of crypto right now.
As for my list of things I need to get back in…
Hold key support
Starting line momentum
Fail tops
Reclaim VWAPs
This weekend, we held support, and kicked off the rebound with some big momentum. But BTC and friends gave it all back immediately. It was an epic fail. Here’s what the candles look like:
They literally gave it all back. Best news ever, but it’s like nothing happened.
Until these crypto tops come undone, there is no reason to get back in. Here’s BTC:
Notice how the market keeps reacting at the election VWAP. This has been the line in the sand for months and continues to be. BTC rallied right back into it last night and got rejected hard.
Just imagine. The average investor, who bought in after the election in hopes of a BTC reserve… just got what they wanted… and they are still in a loss position.
What’s left for them?
Who knows. But, there’s nothing here for me at this point.
As long as we’re back below this key level and the pivot lows around $90k, this is a valid top, and I’ll be looking to get more short.
There’s no reason to own BTC or any cryptos here. The party is over.
What this means for other risk asset markets is the big question for me now.
Steve
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