Eyeing Crypto's potential price expansion
How we'll know the temperature has been turned up in Crypto markets & why they might start outperforming equities soon
Bitcoin continues its ascent.
Altcoins are showing signs of serious strength.
Equities are on a tear.
Yet the topic of focus remains: why is Crypto lagging equities?
Below I’ll explain my point of view on this, and why BTC + Crypto are surprisingly keeping pace without fully stepping on the gas.
All charts available on Dude Terminal.
TLDR
Crypto continues grinding higher while equities remain in full “risk-on” mode, led by semis and strong capital flows. Despite lagging stocks for much of the past year, BTC has held up well versus QQQ during recent volatility.
The core thesis: Crypto still hasn’t entered true expansion mode. Funding, leverage, and volatility remain surprisingly muted, suggesting positioning is far from euphoric.
A move toward $100K BTC could trigger the next major leg higher, especially if altcoin funding, volatility, and speculative activity begin accelerating.
Current positioning remains tilted toward higher-beta altcoins under the belief this is still the early phase of a broader crypto rally.
VIDEO VERSION OF ARTICLE (32 MIN)
MARKET ANALYSIS
BTC is just grinding its way up, and is now sitting above the $80,000 key level.
We’re all sitting around waiting for the famous “upper cut” candle BTC has become known for throughout its volatile history.
My opinion here remains unchanged: the move from here to $100,000 (if granted) where be the zone that BTC + Crypto markets move into expansion mode (more on this throughout article).
BTC has lagged equities performance for almost a year straight, with little to no relief along the way.
However, BTC has held its own vs QQQ since early February which has been a period of extreme volatility worldwide.
If BTC / QQQ breaks to new highs out of this range I think it’s an easy signal that Crypto is the new sheriff in town.
Semiconductors are an extremely hot sector at the moment, and a great example of equities markets being in a “full send” mode at the moment.
Monthly returns greater than 12% are considered to be in top 10% of values over the past 26 years.
This month it’s up a whopping 39%, a historical anomaly and a signal that animal spirits are alive and well in equities markets.
For additional context, $10B+ in flows have been pushed into semis over the past year.
Money is flooding into markets and wealth is being generated at an impressively fast clip. Both of these are occurring at historically significant levels. Will this last forever? Who knows, but most likely not.
Now time to talk some Crypto markets.
90D returns are climbing but haven’t reached levels are that are considered overheated from a historical perspective.
Current thesis = move into the 50%+ 90D returns area will result from an explosive move in Crypto markets, and kick off a longer duration rally for the asset class.
BTC continues its charge up process, and remains an asset that very few people are longing with leverage when compared to other Crypto assets.
This creates a future spring board for BTC outperformance from an intra-Crypto perspective, and BTC leading an explosive rally. This is a very healthy set up in my opinion.
Now let’s talk through what “expansion” would look like if / when it occurs.
From a timing perspective, the % of days with negative funding need to bleed out, or at a minimum begin its climb downwards.
That is currently not the case, as the values continue to climb upwards.
If you look at the % of altcoins with elevated funding rates, things are still extremely tame.
The signal that we are in proper full send mode is this metric will spike as degens flock to Crypto markets to start jamming perpetual swap longs.
The most direct measure for identifying an expansion move in Crypto is simply by looking at 30D volatility.
It is self evident that Crypto remains in a low volatility environment, despite the improved performance for assets over the past 90 days.
PORTFOLIO UPDATES
The portfolio migration into altcoin exposure continues because I believe this is the “early-ish” part of the rally.
BTC serves as a strong base asset at the moment, if ETH or SOL wake up convincingly then that might change.
Memes + AI have been our focus at the moment. Why? Because they’re higher volatility assets.
Unfortunately VVV is a trade that was not managed well on the AI front, but I believe VIRTUAL will have its time in the sun.
Reentering the market was well timed, and now only a 30% pump is needed to get the Levolytics book back to breakeven.
If I’m right, and the expansion move is to the upside, then this ground should be covered in short order.
Nothing is ever guaranteed though, and I remain vigilant for signs that things are taking a turn for the worst.
CLOSING STATEMENT
Has Crypto price action been impressive in comparison to equities? No.
It has treaded above water so to speak, but that doesn’t tell the full story.
In my opinion Crypto hasn’t reached its top speed yet.
Time will tell, but it is my current stance that this asset class will have its time to shine in the coming weeks / months.
Until then, we baghold and watch.
DISCLAIMER
The performance results presented herein reflect proprietary trading activity conducted with internal capital only. No external capital is managed, accepted, or solicited. These results are unaudited and are provided solely for informational and research purposes.
Performance data represents the return on internal capital based on realized and unrealized gains and losses, net of trading fees and transaction costs, but before any taxes or potential operating expenses. The methodology used to calculate performance has been applied consistently; however, results have not been verified by any independent party.
Past performance is not necessarily indicative of future results. All investments involve risk, including the potential loss of principal. The information contained herein does not constitute an offer to sell or a solicitation of an offer to buy any security, investment fund interest, or other financial instrument.
Any opinions, estimates, or forward-looking statements are subject to change without notice and are provided for illustrative or educational purposes only.