Everything is Awesome! Right?

Hello my tasty friends, I hope you’re all having a wonderful start to your weekend.

There’s a lot of excitement in the air. It’s the beginning of spring here in Chicago. The patios are opening, the drinks are flowing, there is green on the trees and green on the screens. There is green everywhere!

As I sit here writing, BTC is up about 9% on the week, ETH +12%, the S&P +6.5% on the month, the AI stocks are ripping, and everything is awesome again.

Or, is it?

Last week in our article titled “Pareidolia” we provided a framework for mapping price momentum across timeframes, in an effort to stay on the right side of the trend.

We cautiously noted early stage bullish signals in BTC and ETH, but these had not yet translated into more meaningful signals within the weekly/monthly periods. Let’s see if anything has changed.

For reference, I’ve included the dashboard from last week (4/10), alongside our updated performance and momentum metrics below.

We’ll combine these metrics with a few other areas of the market we track and see what we can tick on our check list towards for blast off mode.

Performance Dashboard: 4-10-26

Performance Dashboard: 4-17-26

A week later, and we’re certainly seeing an improvement in short-term (daily) price momentum across alts, but no structural change in trends, at least not yet.

Performance is broadening and we’ve traded into the top of the weekly expected move (one standard deviation), but on a multi-month basis, performance is still deep in negative territory. Very trashy, to use a technical term.

It definitely “feels” better, but we’re not out of the woods and this short-term rally could be prone to a reversal. In the event we pull back, the updated expected moves below could prove useful.

I mention the possibility of a pull-back, at least short-term, as the entire market is largely being driven by the same forces. See short-term (15 day) correlations below.

After this week’s upside rip in risk assets, crypto is showing a very strong negative correlation to the dollar.

We’re seeing volatility collapse and interest rates come down. All driven by a drop in oil price / oil volatility on positive headlines out of the Middle East.

Of course we want a resolution between the U.S. and Iran, but keep in mind we’re still in a fluid market environment where any tweet or headline could result in a sharp reversal of recent moves and a resulting bounce in volatility, US $, and interest rates. This would pressure crypto lower short-term.

On the volatility front, volatility has come down from the extremes registered in Feb-March. This was one of the boxes we needed to check before calling a bottom and getting all bullish again. If we see a continued decline in volatility, it should support flows back into crypto as an asset class.

On the flows front, we’re not yet seeing serious capital moving into the related BTC and ETH ETFs. At least not the sorts of flows that would generally get you excited. We’re out of negative territory, but these are relatively subdued vs prior readings. - If volatility continues to fall and price action remains positive, I’d expect flows to pick up, but for now, this is a neutral signal.

After working through the points above, it’s fair to say the setup is a bit more constructive and I’d argue we’re getting closer to the end of the bear market (typically lasts for 1 year following post-halving cycle top).

Daily price momentum is bullish, but nowhere near bullish yet from a weekly or monthly perspective.

In the event you’re buying dips, I still think you want to be prudent and take profits near the top of the weekly range vs try and hit the a home run on a bigger run short-term. Unless we get confirmation from our momentum signals, I think it’s unlikely we’re quickly going back to 100k today, tomorrow, or next month.

At the moment, crypto is still heavily correlated to most risk assets and everything is being driven hard by the macro/war. - I’d expect more chop and the potential for violent reversals until this changes.

Yes, we’ve come off of extreme levels of vol, which should support larger investment flows into the asset class, but we’re not seeing those sorts of flows show up just yet.

All in, I’d rate the current setup as neutral.

We’re just above the boring BTC range we’ve been stuck in for the past few months, and if we can hold here or go higher, it could incite some fomo, which could get the juices flowing back into the 80s. That said, we could easily fall right back into this range by the end of the weekend. So, patience my tasty friends. Let’s see what the next few days bring.

We’re six months in since the ATH on October 6, and conditions are improving.

Assuming there’s some form of an end to the war in Iran and we don’t succumb to an oil price driven stagflation/recession, then maybe there’s reason to believe the worst is behind us.

That’s it for this week. Keep your head on a swivel.

And, as always…

Stay tasty,

Ryan

Trading platform and brokerage: tastytrade

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