Cantering Clark 5/10 Livestream Summary

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Intro:

*Nothing is financial advice

Phemex exchange shout out. Non-KYC exchange and non adversarial (doesn’t trade against you *cough FTX*)

After streams CC will go live on Callin to answer any questions live you might have.

Important Terms to know:

HTF- High time frames. Think days, weeks, months

LTF- Low time frames. Think hours and minutes

VIX- Volatility index. Measures the markets expectation of volatility currently.

CPI- Consumer product index. Measures inflation of goods

FOMC- Monthly meeting of Federal Reserve officials that decides monetary policy (rates, printing etc.). Generally expect markets to be volatile around FOMC

OI- Open Interest. Refers to total number of outstanding contracts in derivatives yet to be settled. In crypto terms, think market participants opening positions as OI rises, or closing positions as OI falls.

Backwardation- When dated futures price moves below current spot price on BTC. Example could be December quarterlies trading at 29k while the market as of right now is pricing spot BTC at 31.5k.

Macro

  • Recent times have really hammered home the point of “Don’t fade the FED”
  • Rates increasing and reduction of balance sheet means headwinds that you don’t want to be fading or expecting any sort of breakout.
  • Markets extremely thin currently

CPI Tomorrow

Classic CPI whipsaw
  • Both announcements caused immediate pumps followed by an engulfing to the downside
  • Tomorrow is a bit more of an important announcement than previous ones.
  • REALLY need a lower CPI print to give markets a bit of relief. If it comes in higher everything is fucked
  • Most people are expecting a lower number
Brace for volatility tomorrow
  • First trade on these events is mechanical. Generally smaller size and marketing in on the first move. Placing conditional market orders straddling the current range and looking for 1–2%
  • After the first move is always a fade in recent history.
  • The follow-up trade is usually going to throwback all the way through prior lows. It’s a much more significant move generally because of trailing stops and exits that are set right after the initial move.
  • Even if the first move extends even higher and then starts consolidating, we are looking for shorts up there instead of looking for dips to long.
Possible safer way to play tomorrow.
  • Another way to possibly play the trade is entering on the reversion AFTER the puke back into the range. Meaning instead of trying to catch the top of the whipsaw, you can enter a bit more safely after observing a drop back into value because the market will rarely stop there.

Chart Analysis:

  • First significant HTF change. However market is still driven by equities, most all of these charts look similar recently.
  • Don’t get sucked into just focusing on BTC/Crypto when everything is so correlated currently. You can have a really nice technical setup and flow on BTC get ruined by macro correlations.
  • Could probably see price gravitate to 3800’s in SPX
  • Next area afterwards is probably the 3400’s area from a structural standpoint
  • No BTC bottom until equities bottom (hence the correlation point from earlier). This is talking long term, BTC local bottom could be in for LTF trades.
  • No real reason to assume correlation would stop currently even if BTC is at a very important level currently. You still need SPX to hold on to where it’s at right now.
  • Huge OI increase at the high 48k level, but that OI isn’t in danger unless we really over 50% currently so there’s no real squeeze that’s possible currently.
  • In looking for bottoms on any timeframe, you don’t want to see derivatives leading a move. Generally derivative led moves will be reverted as they are forced to close when they are offsides.
  • On recent drop: Spot has been selling off much more aggressively than derivatives which is why funding has been positive.
  • Historically, newer participants sell their coins to older whales as we drawdown further and further from the highs.
  • Significant amount of volume done recently in spot selling while we are still holding lows (good sign)
  • However, we still need equities to stabilize somewhere. Right now it’s in no mans land structurally which makes it difficult to have high conviction in a HTF bottom for BTC.
  • Generally equity downmoves are doubled by BTC (15% sell off would be around a 30% sell off for BTC).
Futures still in contango
  • Macro bottoms have typically been in lockstep with long periods of backwardation (futures below current spot price)
  • Possible that backwardation is a thing of the past with newer market participants though.
  • Big mean reversions today across the board
  • Don’t get caught offsides buying now, most of these moves are just thin reversions to the upside. Doesn’t necessarily mean we are bottomed just because the moves have been in the 10–15% green. If you were going to buy yesterday was the time to do it. Otherwise it’s better to wait for more structure to form.
  • Lowest weekly close acting as resistance currently.
  • Looking for either a flush lower and reclaim OR a reclaim of Q1 VAL to define a position.
  • Doesn’t mean just a huge candle upwards into the highs. You want to see some support formed upon moving above those important levels
TPO from recent move. Pretty balanced currently
  • Not a double distribution setup. Good amount of volume was done the entire move down.
  • Market isn’t going to consolidate for just one day and move higher or lower immediately most likely. Range bound is a more likely scenario
  • Favoring shorts from the highs rather than longs from the lows currently because of the current downtrend we are in. A move down could cause a larger move lower because of the current trend.
ETHBTC looking very nice
  • Looks great on HTF’s.
  • Only concern of buying ETH to hold into merge currently is that the merge could cause a 100% move within a week but what if that move is from 1500$?
ETHUSD… not so much

ALTS

  • Again, just mean reversion on these bounces.
  • Should only use alts to scalp in current conditions
  • Not interested in owning Alts long term since the market is in such a fragile condition. Fundamentals don’t mean a lot in current conditions when a move like yesterday can cause mass panic. Probably better to paperhand in current conditions.
  • For LUNA, there was a huge OI increase on the nuke yesterday
  • Can be safely assumed that this was mostly panic shorters and hedger’s
  • Any sort of breakout of those local highs could cause a squeeze to the upside.
  • Only real actionable alt currently, everything else is just going to act as beta to BTC (which is already equity driven itself)
  • Concerning the LUNA announcement, higher prices increase fundamentals. So Do Kwon announcing that an announcement is coming is probably him hoping that price can recover and restore some faith in the project before actually announcing his plan.