Cantering Clark 5/12 Livestream Summary

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Intro:

*Nothing is financial advice

Phemex exchange shout out. Non-KYC exchange and non adversarial. Good customer service as well.

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

A few notes on mindset: If you took heavy losses recently, don’t let yourself despair. Look at where you made mistakes and take the proper steps to succeed for the future. If you have the mindset and don’t want to give up, you CAN do it. Majority of the time the biggest successes come from people who are optimistic. Realists tend to give up when the numbers are against them, but optimists keep trying until they succeed.

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.

Legacy

  • CPI setup from last stream worked out perfectly. First move was down this time but provided a reversion after about 100pts. Reversion wasn’t as violent as it has been in the past as price merely came back to entry instead of extending.
  • Still in “Don’t fade the FED” mode. You aren’t going to see any sort of BTC bottom without a macro bottom.
  • Good sentiment for a bottom: capitulation occurring/ “It’s over”
  • Even if this is a bottom, it’s not going to rip back up immediately. Will take some time to form/reaccumulate before any sort of significant trend back up resumes.
  • Crypto still beta to SPX
  • Doesn’t make sense to fade the downside momentum unless it’s a quick scalp
  • Still a slim chance if markets continue to get hammered that FED is more dovish at the June meeting and gives us some potential relief.

LUNA

“It’s just a dip guys”
  • Don’t go buying the dip on this. There’s no liquidity and it’s currently being delisted from exchanges
  • Biggest issue with LUNA isn’t the token crashing, but the UST debacle
  • People were depositing in this “stablecoin” that was offering 20% yield thinking it was similar to Tether except with much better returns on your dollars
  • Entire portfolios were deposited into UST with the idea that they can generate the tax money they have to pay back and then some
  • Will most likely draw more regulatory ire
  • Doesn’t mean stablecoins will cease to exist, but if you don’t trust them the next best thing you could do is 1x short BTC to hedge if you think the market will go down and you don’t want to sell your BTC for stables.
  • Despite the hysteria, stuff like LUNA has happened before. 2008 led to Bear Stearns and Lehman Brothers collapsing. It’ll happen again in the future.
2008 crash and subsequent reaction
  • Checking back on legacy when this occurred in 2008, within the year after these blowouts the market had bottomed. Basic HTF MA crossovers are your friend when looking to identify longer term bottoms. Lagging indicators of course that won’t let you snipe bottoms, but can help with longer term buys and confidence.

Chart Analysis:

OI going down signaling longs closing after losing 30k
  • No major OI build up, and no real squeeze material
  • Could see a throwback to POC and 21–22 range lows around 31.5
  • For a bottom to form, would at least want to see a multi-week balance to form. Essentially ranging for weeks to build up better structure over 1 to 2 months.
  • All of this is contingent on legacy to stop nuking. If it DOES continue moving down, then you’d expect a move into the gap at the low 20k’s
  • If that nuke happens, you’d be looking for the giant horror candle that can be seen in March 2020 and other spots on the chart in history (huge move down that’s recovered mostly over the span of a week).
  • Most likely that we haven’t seen the worst capitulation in BTC yet.
Range break finally (unfortunately it’s in the wrong direction)
  • Range that we have formed over the last 1.5 years has been broken to the downside. Would be stupid at this point to fade that break. Similar thesis to the break down from 37k of the recently monthly range.
  • In the near future the market should be pretty rewarding to trade on LTF’s. We finally have some volatility to work with.
  • Remember, you want to be able to define your risk wherever you are taking a trade. So shorting this “bottom” isn’t necessarily a bad idea if you can define the trade with an invalidation or spot where you are wrong besides price just going against you.
No man’s land currently
  • As far as HTF bottoms, this one still feels like more downside to come for the generational BOTTOM. Capitulation still occurring, and chart wise 20k looks like the most significant region coming up after the range break from 30k.
  • Only way you could see a huge rally all the way back to range highs (48k) would require a huge build up of OI to squeeze. Even for that to happen it’s going to take months. But this would signify a similar move to the one that happened after the July bottom: Everyone short at the lows, big buying picks up and tons of sellers are offsides and have to cover (buy) causing price to rocket higher and higher.
Dalton Setup: break from value, re-accept back inside, move for the opposite side of the range
  • Dalton Setup (TPO): involves a deviation outside of prior day’s value, and then re-acceptance back inside that value. This re-acceptance is the trigger to trade the move to the other side of the range.

ALTS

Ape moving nicely in both directions
  • Here’s a good example of a nice trade opp with APE today. Didn’t swipe yesterday’s lows before squeezing up, so you could set asks between 8.5–9.5 where significant volume was previously done and play the move back down.
  • Bounces on Alts will be significant because of how large these moves down were. Books will be thin on the way up. You can play this both ways of course.
  • As far as strategy goes trading ALTS, approach is same as trading BTC with. Not looking at footprint with alts, more focusing on flow and context within BTC as well. Alts are all momentum driven plays generally.