Bitcoin's Calm Could Be the Setup for Its Next Move Higher

Transcript

So if um you know Bitcoin is to software well then hyperlquid is to semiconductors in terms of how it's been trading and I think it does reflect sentiment around AI in a way and just that kind of feverish and investments you know being made ahead of what has been a pretty rough corrective phase but that corrective phase isn't a breakdown. It does reflect a loss of upside momentum that is meaningful, but it at least right now it's not going to be long-term oversold in the same way, but there is an oversold reading on a weekly basis and naturally on a short-term basis that could allow for a corrective low.

>> Hi everyone, welcome to another episode of Bits and Bips the Interview. My name is Steve Erlick. I am the head of research at Sharpink and as always your host. We've got a really exciting show for you today. But as always, before we begin, just a few brief uh bits of information. One, uh nothing that you see or hear on this program is financial or investment advice. For full disclosures, please see Unjane crypto.com/bitsbips. And uh second, just want to let all of you know if you haven't yet, Bits and Bips, the interview and Bits and Bips have moved on to their own dedicated channels on the Unchained Podcast Network. So, if you want to make sure you don't miss any episodes, please uh be sure to subscribe wherever you uh listen or watch our podcasts, Spotify,

Apple, YouTube X, etc. And with that, let's hear from one sponsor, and then we'll get on with the show. >> This episode by Cape, America's privacy first mobile carrier. Same premium service you'd expect from any other carrier, but designed so your number, your location, and your data actually stay yours. Get 33% off 6 months at cape.co/chained. >> All right, welcome back. So, um, really excited to have my guest today. She is a repeat guest. She is Katie Stockton, a CMT and the founder and managing partner of Fairle Strategies. Welcome, Katie.

>> Thanks, Stephen. Good to be back with you. >> Yeah. Um really excited to have you on this week in particular because uh as I know you've been watching and plenty of us uh in the industry have been uh crypto's going along slowly calmly and and that's not typically it its mo especially in a world where yields are rising AI stocks are continuing to to go through the roof major indices uh keep setting record highs. Um at the same point we get worrying inflation prints and a lot of different things going on. Um, crypto is supposed to move um, one way or another, but hopefully up, but for the most part, it's staying still. And I think you're the perfect person here because of the

way you look at the market to sort of explain what you're seeing, uh, why and I guess most importantly, uh, when it might end. So, uh, let's get right into it. Uh, let's talk about let's talk about Bitcoin. Um I know that uh you've given some comments recently that you think the bottom is in and we are going to look for we are going to see a bit of an upswing. Uh perhaps you could walk us through what you're saying. >> Of course. So obviously the crypto winter has been ongoing and with the downtrend we now have a long-term oversold indication and that's based on it's measurable. It's based on the monthly stochastic oscillator that we

use. So, it's a technical indicator, pretty popular in fact, and it's been oversold now for a few months. And that's something that has us sort of perk up, right? We we pay attention when oversold conditions return, but they themselves are not enough of an indication of a turnaround. What we like to also see is mostly twofold, I would say, which would be improved momentum. And when I say that, I mean more than just short term. And then also we have another indicator a suite of indicators in fact uh from Tom Demar. The Demar indicators are helpful in order to enhance those oversold conditions and

vice versa. And they do have some signs of downside exhaustion presently for the monthly Bitcoin chart. And they would suggest that at least for you know another three or four months we could see some stabilization if not a longer term turnaround. >> Okay. So let let's break this down a little bit more using the chart that we just had up if if if we can get it again. Um because there's a lot of information here, a lot of different charts. And I know when you and I have spoken in the past, it's it's never just one reading. It's never one indication.

It's never one particular time horizon or or or time scale. So could you just maybe walk us through a little more like precisely like what what you're seeing and um and I guess like what you would need to continue seeing for your conviction to to persist or get stronger, >> of course. So you can see this is a weekly bar chart of Bitcoin and you can see the downtrend of course series of lower highs, lower lows, but what you'll also notice is that there is a long-term support zone nearby and support can be measured many different ways. We look at previous peaks and troughs on the chart.

So you can see previous troughs or lows have been captured uh by this zone. We also like to use Fibonacci retracement levels. It's something that's fairly common in technical analysis as a discipline and it's a way to understand where buyers may step in based on the Fibonacci sequence which is maybe a topic for another webinar but um quite quite um helpful we have found. And then also uh just things like the cloud model, the shaded area that you see can also be a support gauge. But of course, right now it's resistance uh longer term resistance and overhang. And it also reflects the downtrend that has affected Bitcoin for some time now. But with all of this, we have the long-term oversold

indication. So that's more visible on the monthly chart. So we use stochastic oscillator on the monthly, on the weekly, on the daily across time frames to help us understand what's going on here. And because we had not only the weekly oversold, which would be more intermediate terminates takeaway, but then also the longer term oversold on the monthly taken together, those would suggest that we have a potential major low in place. >> Yeah. I'm I'm curious. I know in some of our previous conversations we we've gone back and and talked about historical precedents and uh although crypto is is not very old es especially in terms of the world of the financial system um it's gone through many cycles in its brief history. Uh are there one or two

times where you've seen a similar type of over oversold um situation and uh are there any similarities? Um typically like what uh what is the catalyst that helps it break out? Is it something exogenous that happen like outward stimuli or are there signals in terms of momentum indicators or volume something like that that gives you a sense that um even if perhaps a match gets lit that there's enough Tinder there to really keep it going.

>> Yeah. So what we like to see is is pretty specific in fact in terms of an oversold condition giving way to then what we call an oversold buy signal. And in our work that occurs in part when the stochastics in this case on the monthly would turn back above 20% decisively. We feel that that shows enough of a momentum and sentiment shift to then suggest that it was a major low already that's in place. These indicators all have a built-in uh lag to them, but that's okay because we're trying not to get caught up in the noise, but rather identify bigger, more important inflection points.

>> And uh with that, we feel that the indicators generally keep us on the right side of the trend um and also help us to know when the probabilities are in our favor. Right? So, if we're thinking about uh you know being long Bitcoin right now, we know that we're fighting against a a downtrend, right? That downtrend is still visible. It's still evident in the monthly indicator certainly and you can just see it in the slope of the 40week moving average on the chart and that is the our context, right? So, we know we need to have stricter attention to risk management.

So all of these things are just designed to give you more success in your investment decisions. There is not um any way to predict what's going to happen tomorrow, what's going to happen a week, a month, a year from now. Uh but we can put those probabilities in our favor and therein uh manage risk and also succeed in terms of riding those trends. >> Yeah. And and it's interesting. I I know that you don't obviously you spend time uh paying attention to what's happening in the world of crypto and we're talking about Bitcoin right now al although your investment decisions are primarily based on what the charts are telling you but but there is a lot happening um the Clarity Act u and while that doesn't have as much direct relevance for

Bitcoin as it does other assets it's still a big um sign of of uh legitimacy um should it get passed and then uh within Bitcoin itself uh it's been a difficult week of news because of um the the hacking of of of seed phrases for for one of the oldest and most established hardware wallets which is supposed to be ironclad security a nine figure theft that I I don't think is entirely complete yet so we're seeing a lot of movement into ETFs Bitcoin ETFs in particular but it's not the type of movement that I think people necessarily want to see it's not institutions going in it's people rolling out of these hardware wallets into into ETFs so that's just a long way of saying that there's a lot happening right now and we're also in a world too where we're getting an inflation print tomorrow and

depending on what happens there, we already get the sense that the FOMC wants to raise rates or is is is I guess perhaps prepared to uh depending what how the inflation rate comes in. Um that could also lead to u to higher rates which could be difficult for Bitcoin. I I'm curious if at all just given all these things that are happening around the same time, does it factor into your models or is it really still just the charts and you assume that those factors I mentioned are sort of embedded within the volumes and flows that you're seeing?

>> Yeah, I mean listen like if it factors into price then it certainly factors into our models which really only consider price and that is the nature of technical analysis. It's trusting that all the information out there except for the new news, right? So maybe Clarity Act could be considered new news once it finally hits, but it's widely anticipated, right? So it depends on uh you know what we're talking about but but it's assuming that all that known information is baked into the price already and how the sort of dynamics of supply and demand are impacted by all of these external uh situations and setups and asset classes. So we do keep it very

simple really focusing in on price and trend and momentum. It's not to say that that's the only tool that you should have in your toolbox. It's it's our tool primarily. Um but we also think that with any kind of asset class that you should have a fundamental case that's strong to be there. You should have a catalyst both technical and ideally fundamental as well to continue to hold on to that exposure and that you should use uh technical analysis charts to help you manage risk and for market timing purposes. And when you come into these events, right, the assumption is that the chart's not going to tell you what the the reaction will look like, but it

will tell you what the setup would favor coming into that announcement. Right? So, as we come into more economic data, that gives us more color around inflation. And I would argue that we have a condition for Bitcoin that's more oversold and that's more likely to allow it to remain stable even in the face of bad news. So I think of it more in those terms. And then we are reactionary. We're we're very happy to react should something change in response to that announcement. and that could come in the form of a breakout or a breakdown primarily or in terms of a new signal from our technical indicators. So those

are the things that we really either take issue with or get excited about. >> Yeah. Uh one more question and then we have to go to another break. But uh uh within the context of this conversation, you're very much putting your money where your mouth is because I I know that you just launched a new ETF that is designed to sort of um protect during down downward momentum, but really excuse me, ride upwards momentum um as much as possible. uh maybe just talk a little bit uh about that but but in particular like why you structured this um this vehicle this way because at this point it I mean there used to just be spot and then there were covered calls I mean there's a whole wide variety there's there's mixed assets but but you

saw an opening so I I'd love to kind of get your thoughts >> and it it is very much aligned with our methodology this is a long only bitcoin strategy it's called the amplif ify fairly tactical Bitcoin ETF. The ticker is BNAV or B-NAV. And we feel that it's really using technical analysis is one of the best ways to have an active strategy that can compare favorably to Bitcoin buy and hold. What we're trying to do primarily is ride that upside momentum when it's its strongest with a leverage position of about one and a half times uh what would be equivalent to buy and hold. But most of the time

we'll be sitting with a lower exposure of about 70% uh Bitcoin because there's these prolonged consolidation phases. there are are crypto downtrends and we want to be underexposed in those environments because that has the potential to limit the big draw downs that we have seen historically. So that's the design. There are a lot of ETFs out there that would claim to be active but truly they're active more in terms of their structure. They're using covered calls etc. Whereas this is to to our knowledge at least the first trend following momentum based ETF that trades Bitcoin.

>> Gotcha. All right. Well, we have a lot more to talk about, but before we do, let's take one more break to hear from another of our sponsors. >> If you own your biggest vulnerability isn't your wallet, it's your carrier. AT&T, Verizon, and T-Mobile have been breached again and again, and SIM swaps are still one of the easiest ways for attackers to drain accounts. That's where Cape comes in. America's privacy first mobile carrier. Same premium service, but Cape rotates the identifier on your SIM every 24 hours, deletes your call and text metadata after a day, and protects against SIM swaps with a 24word recovery phrase that only you control.

You also get two middle to end encrypted secondary numbers for banking and signups, so you stop handing your real number to every app that asks. Go to cape.co/chained and use code unchained for 33% off your first 6 months. All right, welcome back. So, I'm talking with uh Katie Stockton, um founder at Fair Lead Strategies, and we're breaking down technical charts to uh wonder when crypto is going to get, I guess, get up off the mat and start and start acting crazy again. Uh we just went through Bitcoin. Uh let's talk about ETH. Now, when I had you on a few months ago, you mentioned how ETH was um sort of set up to outperform, which um given that my my

main job is at a an ETH treasury company, that was certainly music to my ears. uh ETH had a really good July, but but in general it hasn't really had that that big breakout performance quite yet. I understand that there's a lot of mitigating circumstances and factors, but I'd love to hear from you. Uh what are you seeing on on the chart as to the reasons why? >> Well, we have to sort of isolate absolute terms and relative terms. Um, in absolute terms, Ether is in a downtrend much like Bitcoin, but this is a cyclical downtrend that you could view within the context of a gradual secular uptrend. There was some very, very long-term support based on a trend line, an uptrend line that held in this recent

low that we've seen from ETH. And we feel that that's um, you know, could be the first step towards a major low. and it shares the same uh types of indications of downside exhaustion actually a little slightly different but with the same takeaway on the monthly chart and of course we had an oversold retest on the weekly chart and some improvement in those intermediate term indicators as well. So the takeaway is the same that this could be the beginnings of a a major low. Uh we're not totally convinced that the spacing phase has fully culminated. We really need a breakout from both Bitcoin and Ether to suggest that. So that would for for Bitcoin that would be above the 200 day moving average I think would really

solidify that just as as a turnaround but that breakout is ultimately what completes the basing phases. Now if we were to go back to the ratio which we do every week in our research >> you're talking about the ETH Bitcoin ratio. >> Yeah. Yeah. So we we look at at Bitcoin over Ether and we find or have found that the long-term trend has generally favored uh Bitcoin of course but just this year um and since we last talked I believe in February the performance has been in line overall but with some pretty good swings in both directions.

So uh you know early sort of I guess it's in the first quarter we did see a short-term phase of outperformance that was uh sort of given up but now we're seeing a recovery that has brought us back to sort of an inline uh takeaway. The recent recovery in Ether has taken the ratio Bitcoin to Ether below its 200 day moving average the rising 200 day. So it could be the start of a more lasting shift again in favor of Ether. I think it's still too early to say that this is a decisive uh turnaround, but it has the indications of that. So, I think there's promise for it. I don't think it's a decisive reversal as of yet, but we have those indications.

>> Okay. Um so, um let's go back to the ETH chart. U because I want to ask you a couple of follow-up questions there. Um you mentioned how there was a bit of a difference in the types of lows that you're seeing between Bitcoin and ETH. Uh I I think you I don't want to misquote you. You you're mentioning how it's kind of like a secular low as part of a general uptrend. Um maybe I I got that wrong, but could you just maybe elaborate a little more on the differences that you're seeing between the Bitcoin and ETH charts? >> Yeah, of course. So, of course, the secular uptrends there for both of them.

uh ETH had a like a cleaner trend line a cleaner gradual trend line that we used as support whereas support for Bitcoin we were using different metrics so so the way we're deriving support is different for one and then also the signals that we have from those demark indicators that I mentioned are different signals but again uh pretty similar takeaways that we should see some stabilization that that would last several months if not longer and so we have that takeaway from both charts but slightly different signals and you know I think it's a matter of like generally speaking they trade directionally in step not perfectly we have seen some

dispersion it's a bit more pronounced outside of Bitcoin and ETH I would say but uh that dispersion can actually provide opportunity because I would say that when we have certainly a crypto bull market and come out of this in earnest that that's where you can find real potential from all of the above. >> Yeah. And and and what do you mean when you say a major low? Is that a particular technical term or is I I assume uh or does that mean like the bottom isn't? I just want to make sure I understand. And >> so be like a cyclical low. So we we always speak in our research cyclical versus secular. Secular would be multi-year even multi-deade in terms of duration for a trend whereas cyclical

would be what we've seen on the downside which would be months to maybe a couple of years I'd say at longest. So it's kind of the cyclical down move which way to then a cyclical up move or trading range that would be a major low in our work. Uh there are certainly ways to take advantage of intermediate term lows too. So, we've actually been constructive in our research from an intermediate term perspective to honor the momentum shift that we've already seen from uh both Bitcoin and Ether. So, so you can obviously have these counter trend setups that are favorable as well within that context.

>> So, so um we don't necessarily want to hit a major low, but quote unquote we kind of do because then at that point we can sort of hopefully bounce off of it back into a new secular secular uptrend. That's >> Yeah. I mean, the good news is that we may have already seen that major low is the message. Yeah. >> Okay. All right. Um, great. And and I want to um I want to go back to the ETH Bitcoin ratio chart because I just want to drill down on that a little bit too. Uh it looks like it was kind of straddling the 200 day moving average line. And uh I mean obviously that is a very important indicator, long-term indicator. it it looks back retroactively, but at the same point it's um it it's much more

stable, I guess, constant than than the the 50 20 10 whatever. And and you're the CMT. I I am not. Um but it's the first time that the ratio is at that level for um in in months um after being above it for quite some time. think I I know we just we don't the same types of um metrics that on this chart as we do with some of the others, but I'm just curious if you have any more insight into kind of what to expect next because it is interesting to me that it seems like it's very closely straddling it almost in or almost like moving in a parallel fashion slightly under and uh to me that signals that there could be some type of movement one way or

another. >> Yeah. So what you're seeing there in a way is a consolidation phase and then the question is is that consolidation a continuation pattern or a reversal and we don't know yet but what I will say is that the breach of the 200 day which was decisive enough would raise the possibility that it is a continuation pattern meaning that we should see more outperformance if it's resolved to the downside by ether and so we can't predict predict it. But I would say that you know we are seeing some reaction to oversold indications. But if we were to see both Bitcoin and Ether complete their basing phases or you know advance further off of their lows, I would

imagine that that would see uh you know this this ratio probably neutralize for a while a bit more of an extended neutral period as u you know early stage turnarounds. you tend to see Bitcoin uh you know be the first one that people go back to but then once it's more established then you see the altcoins uh really kick in and benefit from that that sentiment shift. So those are the types of behaviors that we'll watch for but instead of you know predicting the next move in the ratio if we see a breakout or breakdown we can certainly respond to that accordingly. We also have a way to look at the rotations amongst the other altcoins to see if

like collectively we have a shift to risk on versus risk off. And we like to use that from a short-term perspective to help tone our research about the sort of absolute trend. And so we'll even look at just a 10day view of the rotation amongst altcoins relative to Bitcoin. And you can derive some good information from that. >> Have Have you looked at the most recent one? Is there anything worth mentioning? >> Yeah, I mean we have several altcoins that were in what we call the improving quadrant. So, and again this is very short term so it might not be relevant relevant by the time somebody uh listens to this talk but you know the likes of Salana we have had some rotation that is

uh more risk on in the space. >> Yeah, I know it had Salana's had a good week. It's up 5% or or or so in the week. And uh I I know we're going to talk about a few other a few a few of the other alt majors in a in a second, but I I always find the ETH Bitcoin chart pretty fascinating because I I even back when I was at Forbes, I would look at it um in a unscientific way to get a sense of sort of like market uh uh market attitude towards risk and um and in particular what that could mean for associated altcoins. I know some of the alts especially not even counting like like Salana or XRP like the major alts I mean they've kind of I think gone bit of the wayside with the rise of um like

prediction markets and AI stocks and plenty of other ways to express like like very risk forward attitudes but uh I'm curious what's going to happen with the future of that chart because I've long said that I mean for one thing like Bitcoin should not trade alongside in conjunction with ETH any more than gold should trade with Google or something like that and and today like so I mean what that means is I don't think the chart should really stay that steady like it should go up or it should go down but like ideally honestly in an ideal world I almost feel like Bitcoin and ETH should have like a very strong negative correlation with each other >> yeah interesting and I mean it just like anything and there's cyclicality to it right where there's even cyclicality to the correlations as of late I mean you

can look at Bitcoin relative to gold bitcoin relative relative to the NASDAQ 100. And you'll see that these correlations just come and go. >> Um, and with that in mind, it's hard to over, you know, a short to intermediate term time horizon to rely on those correlations for trades or investing, but over the very long term, of which we don't have really a very long term yet from cryptocurrencies. But that's where it can certainly that the correlations if they're strong enough can inform trading and models.

>> Yeah, it's funny. I mean, I kept being asked to make sense of gold and stocks both going up during the early days of the Iran war. And I I >> um same reason stocks and bonds would go up like during co it just >> it is what it is. Um, all right. So, let's quickly go through some of the other big tokens that I know people watching hold and pay attention to. Uh, Salana, we started discussing it a bit. Um, as you mentioned, it had a good week. It had some decent ETF inflows. Uh, what are you seeing on on that chart if we could put it up?

>> Yeah, you'll see that it's been uh sort of advancing from what was a corrective phase. That was kind of interesting. and it's been tethered to its 50-day moving average to some degree and now it seems to be wanting to pull away from it on improving short-term momentum. um if it does advance to that 200 day moving average which is resistance just by the nature of it having like a psychological significance. So many eyes are on these 200 day moving averages which really are just sort of a lagging gauge of the primary trend but because they're so widely followed they they tend to have um importance. So, if we were to see that, that would mean that the consolidation or corrective action has

like officially resolved to the upside and would make Solana look a whole lot like a a basing phase, a major low if you zoomed out on the longer term charts and then we would start to focus on secondary resistance levels. So, you can see how it's more just fluid. We want to see, you know, bit by bit these positive catalysts continue to unfold. And in general, we have seen among the altcoins better momentum. So improved short-term momentum in addition to improved intermediate term momentum within the context of either an oversold or nearly oversold reading on a long-term basis.

So, so not out of line with Bitcoin at all in the way it's been trading. >> Okay. Um, well, one token that did not have a great week was XRP. Uh, so I'd love to kind of get a sense from you of of what's happening there. Well, and this is a good one to pull up because it shows that there is of course dispersion uh when you kind of pick apart the the various um names within the the broader context and we talk about when we're talking about equities like a stockspecific move. Well, this is like a cryptospecific move clearly where uh Ripple has been out of favor and correcting in a meaningful way still when others have caught a bit or stabilized at least right and uh now

Ripple is testing some key support and what we have found is that when uh support levels are broken so meaning for a shortterm level you're seeing um a security close a couple times below that or an intermediate term level maybe a couple of weeks below that, that becomes something that tends to foster additional downside momentum. So, we're always respectful of breakouts and breakdowns, even if it's kind of against our better judgment and what we think should be happening, right? Because it's it's we don't want to let our biases get into the get like sort of muddy the situation here. Uh right now what we know is that Ripple is testing support pending confirmation of a breakdown,

underperforming, and still hasn't really captured that momentum uptick that the rest have. >> Yeah, Ripple's always a pretty fascinating one for me. I uh it was bid up exceptionally high, especially during um the 2024 presidential election. uh the company closely assigned uh aligned itself with with President Trump and uh I forget the numbers but I think it went up above $3 per perhaps even higher. I mean it did exceptionally well and uh it was actually named in one of the uh I think it was initially named in a tweet from President Trump about this national crypto stockpile that the one where he curiously forgot to mention Bitcoin underneath I think someone reminded him

about an hour later. Um, I mean, Katie, you probably know this. Uh, a lot of people listening and watching know that I've been in my earlier days as a journalist, I'd been critical of of Ripple, not for the company or or or what they did or the quality of their technology, but just for the amount of tokens held by by Ripple Labs, the that primary development team and and essentially like my belief that there was not usage commensurate with um with what the token was was worth. So, uh, it does look like it was a smooth, um, a kind of a smooth downtrend. So, I wonder like what that means in terms of momentum to actually like reverse things. I I've seen reports that whales are trying to buy more XRP to um, to

support the price, but uh, when you see a chart like that, does it suggest that um, is there a different type of tactical setup that would have to like does it make confirmation of a breakout harder, I guess, is my question. because it looks like a a compared to Salana or ETH or Bitcoin, all of which are also down this year, this one does seem to have the the cleanest slope down. >> Yeah, I would agree. I mean, it's a more decisive downtrend. And with a breakdown pending confirmation, of course, it's it's a bit farther away from, you know, coming close to a breakout. So it it it could end up sort of bringing up the rear if we do see broad-based rotation

that favors the the crypto market as a whole. Uh we really believe at least in the equity market and top down influences and to maybe just a slightly lesser degree for the cryptocurrency market uh with Bitcoin kind of our S&P 500, right? We we want to make sure that we have that trend from Bitcoin on our side uh before we start going deeper down into the sort of market cap spectrum, if you will. And so Ripple with with the shift that's more decisive than what we've seen and then I would imagine it does stabilize, but it it probably remains a lagard because if we took the trend and looked at it relative

to Bitcoin, of course, you know what you would see, right? And you want to respect the trends both in absolute and relative terms. >> Yeah. Okay. All right. Let's touch on on one more token before we start the wrap-up. Hyperlquid. Um it's been the breakout star of I don't know I guess the last 12 months or so. Uh and uh but it is down I think about 28% off of its June high. Um granted Amina better than anyone. Um just straight upward momentum is never sustainable and and hyperlquid remains as you could see on the chart.

uh doing extremely well. But I I'd love just given how this is has like a different type of chart, different dynamic than the other tokens that we talked about. I'd love to know what you're seeing here. >> Well, what I'm seeing is something that looks just like the AI trade and uh >> right or a semiconductor stock. So if um you know Bitcoin is to software, well then hyperlquid is to semiconductors in terms of how it's been trading. And I think it does reflect sentiment around AI in a way and just that kind of feverish and investments you know being made ahead of what has been a pretty rough corrective phase. But that

corrective phase isn't a breakdown. It does reflect a loss of upside momentum that is meaningful. Um, but it at least right now it's not going to be long-term oversold in the same way, but there is an oversold reading on a weekly basis and naturally on a short-term basis that could allow for a corrective low, right? Something that it has maybe shorter duration than a a major low, uh, but one that still could be tradable. The good thing about the chart is that it can help you identify where that support is in order to have a defined risk metric, right? Because you know that if it takes out that trend line or maybe you want to give it more room to the 200 day moving average, well then risk is greater that

this is actually more than just a correction and something uh that that is more the start of a cyclical down move. So uh you can see this kind of uh completely different price action. It is rare uh but you can see it from the market and there is information there. The information is probably uh better for a fundamental takeaway than a technical takeaway. But I just think it's fascinating how it's traded. >> Yeah, it I'm I'm curious. I was trying to look up quickly at the top markets on hyperlquid to see like why there is that uh that sort of that what appears to be a very high correlation. And I know there's like SpaceX uh and they have SPY futures and and our markets and they have oil and other stuff too. But yeah,

that that certainly um it certainly rings true. And you know, I'm really curious what's going to happen with with Hyperliquid because I mean the I'm not going to call them unregulated because I don't think that's true and I I want to really look into that before making a statement along those lines. But at the same point it is offshore and I do believe they geoence US users so they they can't really use the platform. Uh but we are moving into a world where uh the major indices are are facilitating 247 trading. Um these types of per in any market either through prediction markets or just through exchanges like Kraken or Coinbase or or

whatever. I mean they're they're going to be offering regulated versions of these markets. So for Hyperlid, I know I know this isn't necessarily how you look at things, but competition is going to to heat up. And I I wonder I feel like they're going to be facing the same type of challenge that Pal market faced with Koshi and some of these other like US-based markets. Poly market has continued to remain large even though it's been surpassed I think by a couple multiples in terms of cali in terms of um notional open volume. But uh I I I don't know. I guess my question is like does any of that concern factor into how you would read a chart like this or is it really still just looking at the core momentum factors, the technical metrics that you pay attention to?

>> Yeah, I mean you're you're talking about sort of headline risk in part and um that's something that is more prevalent for some coins. It's more prevalent for some asset classes, i.e. crude oil prices right now, right? So that'll come and go. But to me right now that would be just all the more reason to have a systematic way to manage risk. So if you felt, you know, that hyperlquid while it has these ongoing fundamental issues, if nothing's acute, h you can still trade it for a relief rally, but you would want to obviously have just that defined risk metric, whether it's a percentagebased stop-loss, watching it relative to a support level, only owning

it when the MACD indicator is positive, whatever it may be. there there's just ways to do that and to do it without the biases that could come with reading the news and um you know digging into those headlines. So, so for sure it's a overall the takeaway would be that this is a nent sort of asset class too >> and there subject to more risk and bigger swings but then the other side of that is that with volatility there is opportunity. So um I can see why people are eager to trade these instruments.

>> So let's finish by talking about volatility because it it's two very different pictures if you're looking at crypto. I I know you talked about um Bev. Actually, I'm I'm actually blanking on his name, but I had him on my show uh last week actually to talk about Bev um and and sort of how it stuck in like the the mid30s, whereas um volatility in indices continues to remain high and um and there's been a big trend of I would say people irresponsibly putting money into highly leveraged ETFs. uh obviously not putting you in that category and what you offer, but I'm talking about like people in Korea

putting just dumping their life savings into um these like 2x ETFs uh etc. And um and then watching it all go away. And I'm curious like how you factor in like those two different um how like those two different sort of worlds when you're trying to make sense of charts like this. >> Yeah. So I mean the volatility as opportunity is more a comment on the trends and how I guess high beta in a way uh crypto can be relative to other asset classes that have been around much longer. And it's that way with still like pretty good liquidity, right? So

oftentimes you'll have less liquidity uh when you're looking at something that is you know exceptionally high beta. So so that's one way to look at it and that would be I think at this time more of a positive. Um if you were to look at the B viv so that's I see that as just like the VIX for Bitcoin. Um it would be more of a gauge of sentiment in our work. We like to look at volatility via the VIX as a a sort of a transactional sentiment gauge. Like how are people feeling about this asset at this moment? And not only how are they feeling, but with that in mind, how are they positioning, right?

Are they positioning for more upside or downside? Um, and that will show if obviously they're worried about the market or not. And where that sends um a message is actually when it's at big extremes, right? So when it's just kind of like floundering and just kind of hovering, it doesn't really have a powerful takeaway, but it does when you get these extreme readings. I would argue that the BVIV, which I I'm not that familiar with, but it it's not that extreme at this moment. If anything, it would show maybe some complacency. Uh but that doesn't make a whole lot of sense after a downtrend. So it would be, I'd say, slightly less worrisome in terms of a complacent reading for that for that reason. like if you saw a low

reading uh you know after a big runup that would be a bit more concerning. >> Yeah. Yeah. I've been trying to look a little bit into the reasons for the the depressed B viv or um DVA which is Darabit's like version of of the VIX. There's there's a couple of them out there. Uh I I know the call skew is still like relatively elevated like people are still kind of protecting from from the downside and uh there's a bit of a narrative. I'm actually curious your thoughts on this that like the days of like the 10x 100x returns on Bitcoin and the I guess associated assets is is over because it's become institutionalized. Is that something that that you agree with?

>> Well, I think in like becoming institutionalized um it can also be looked at a couple different ways. When I say it, I'm talking about more the uptake from asset managers and and not small ones but the big ones. Uh so once we see that uptake to me that's where it also has that institutional um sort of interest on uh as an investment right so I don't think we're there yet I think we actually have a really long way to go to get to the place where ultimately it should be or could be um so so there's more institutions trafficking in it but it's not in the way that I think will necessarily contribute in a um in a way

that will minimize that volatility or tamp it down to a huge degree until we have that sort of buy in from large large institutions. So that's one thing but year-over-year I mean lesson we have seen as just the asset class has been around longer less volatility. So I think just by the nature of being around longer to sort of oversimplify people get more comfortable with it. I think I I still get questions on well what happens if it's all a farce and it goes to zero. Um so the longer that it doesn't do that or something you know extreme like that I think the more and more um you know sort of normalized the trends will become. So you've seen that

already in the kind of that return streams to a degree, but to me there's still a whole lot of volatility to take it advantage of. But then also the longer term that secular uptrend is established, right? We have a series of higher highs and higher lows even though these cyclical down moves can be really dramatic. >> Yeah. Okay. That's a good way to put it. All right. So let's wrap up here. Uh, but before I let you go, I'd love to know if there are one or two tokens that are maybe a little under the radar that people should pay attention to that that you're keeping an eye on. And um, you don't have to answer the second part, but if there's one or two that um, you think people should be bearish on?

>> Yeah. Well, I mean, I I guess we'd have to focus on Ripple as the the more bearish setup. We we actually really focus primarily on Bitcoin and Ether in our week because in our work because we feel that it's it is the most institutionally relevant and we want to make sure that there's um liquidity that we're comfortable with market cap in a way that that we're comfortable with. So we focus primarily on nose and we feel that again with these signs of downset exhaustion longer term that people should be sort of woken up right now to this improved momentum and ready to put money to work in the broader space. So, uh, we found in, uh, building the model for our BNAV ETF that we didn't derive a

lot of value from going down deeper into these altcoins um, without adding much more risk um, to the profile of the strategy. So, we found that trading Bitcoin uh, for our purposes was really ample and that's where we focus. >> Okay. All right. Great. Uh well, where can people learn more about your your research or or yourself if they want to follow um what you put out there? >> Of course. Yeah. As a place to start, our website fairleadst strategies.com. They can receive a sample of our cryptocurrency research there. They can find more information about the two ETFs that we manage and just generally speaking about our methodology. We also

have a Twitter um account or X which is Stockton Katie and people can find us that way too. >> Right. It'll always be it will always be Twitter to me. Uh well with that Katie um thanks for for coming on. We'll have to have you back sometime soon. Hopefully the markets a little more volatile and uh thank you to everyone for for watching and listening. Uh this will actually be my last show for a couple weeks. I'm going to be on vacation, but we'll be back in the first week in September uh with another exciting guest.