1/6 I’ll give u guys a little insight into why I shorted BTC/ETH post-CPI rally. First thing is it’s important to understand the structural flows in trads (see thread below). The key point is that crypto’s correlation makes it so that ppl LONG crypto during SPX’s structural rally
2/6 This means you have an abundance of OI now, in a move that’s very likely to reverse in trads given its structural nature (driven by shorts/puts covering). The result -> more volatile move down in crypto compared to trads
3/6 The second reason is the idea I mentioned in my last tweet. You could see prolonged distribution as price reached 24k+, meaning there’s more potential trapped buyers the longer we trade up there (a deviation outside of the range we’ve been trading in for months)
4/6 How do we know it’s distribution? Perps were getting horny yet absorbed. There was so much OI pushed in yet not much price movement; we ended up forming a mini range at like 23-25. Why does this always happen in crypto? Because there’s no external capital
5/6 It’s the same ppl just tossing money around in a circlejerk, and it happened to reach its zenith. Notice how OI constantly tops out at the same place. This isn’t exactly bullish, you never want to see another mini range form after breaking out of a prolonged range.
6/6 Finally, the left curve approach: we hit a psych price point of 25k BTC/2k ETH. But we did it during a window of weakness (VIX opex), in which vanna/charm flows are going to be muted, and that trapped OI in crypto is no longer getting bailed out every London open or 10am ET
Still in this trade, don’t rly have any new setups. And before anyone asks for my target, that’s not rly how I trade. Never fully in/out of a position. There’s obvious points for hedging with longs (16k, 13k, 8k, etc)
You’ll know when my bias changes, I’m usually p explicit e.g.
You’ll know when my bias changes, I’m usually p explicit e.g.
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