What's going on with Crypto?
Deciphering the mixed messages from Crypto markets
Crypto markets are sending its participants mixed messages: BTC is fighting for its life, while some altcoins are melting upwards, and Crypto equities look just as good as any other sector in the stock market.
What gives?
Below we’ll touch on various datapoints that provide additional context on the items mentioned above, and also what the combination of these factors might mean for Crypto markets moving forward.
Let’s get into it!
All metrics available on Dude Terminal.
TLDR
BTC has been rejected from the critical $75K–$80K resistance zone and remains the key risk factor for the entire Crypto market.
Crypto equities continue to show surprising strength, with BITQ breaking to new highs despite BTC’s weakness.
Market breadth remains historically poor, with over 500 days since a broad-based Altcoin rally.
AI remains the clear leadership sector, while a small group of individual outperformers (HYPE, NEAR, ZEC) continue to separate themselves from the pack.
The market appears increasingly selective, rewarding quality assets while weaker projects continue to struggle.
Portfolio strategy remains focused on owning outperformers alongside a healthy cash position rather than taking broad market risk.
A large amount of sidelined capital is waiting to rotate back into Crypto, but there are relatively few assets attracting sustained demand.
If BTC stabilizes, capital could be forced into a narrow group of high-quality projects, creating the potential for violent upside repricing.
VIDEO VERSION OF ARTICLE (36 MINS)
MARKET ANALYSIS
BTC has officially been cleanly rejected from the Bears First Wall between $80,000 and $75,000.
The daily chart doesn’t look pretty and my outlook on BTC remains unchanged: a weekly close below $70,000 is genuine cause for concern, and a reason to start planning for the worst.
A best case scenario for bulls is that a higher low gets put in before revisiting $65,000 (the origin of the uptrend).
As a trend trader, BTC is in the do not touch category for the time being.
Does this mean all Crypto related investments are off limits?
No, not all Crypto investments are off limits.
BITQ remains in an up only macro trend vs BTC and has broken to new highs since the April equities puke.
Crypto equities remain in demand despite BTC’s uninspiring price action.
Altcoins are on similar footing to BTC and attempting to hold serve as bears attempt to push prices below the 90D moving averages across the board.
A clean break below $70,000 BTC would likely damage Altcoin charts and their respective 90DMA ratios along with it.
Wiggle room is dwindling.
Local pressure on bulls comes in the face of a seemingly everlasting weakness across the market as a whole.
530 days without a market-wide rally is impressive and depressing all at the same time.
Is this trend over extended? Yes. But until the trend decisively breaks, we need to show some respect to bearish counterparts.
Dips in price over the past 3-4 months have left a lot to be desired, and I can’t decide if this is a good or bad thing:
IF Good = Market is more resilient than we are giving it credit for, and dips are for buying because they’re getting gobbled up
IF Bad = We are due some downside violence, and the pain is just beginning
Some of the “Good” argument is showing in the surprising strength of select assets in Crypto. The “Bad” you only discover after the fact…
AI remains the only sector that you can get excited about as a whole.
Everything else just follows BTC, and trades with less liquidity and more volatility.
My hunch is that you can continue to take measured bets here: it’s the strongest sector in a world that’s increasingly dominated by AI headlines. BTC needs to simply not die (which is feeling like a bigger ask with each passing red candle).
Outside of AI, there are assets that continue to outperform on an individual basis.
There are a handful of these assets at the moment, including HYPE, NEAR, ZEC.
The important questions are:
Is the market becoming more discerning? Are we entering an era where you can buy assets while BTC trends downwards?
Or are these assets pumping a signal that the rest of the market is soon to follow?
My answers are as follows:
Yes, I do believe the market is becoming more discerning. However, I do believe the effect of this discernment is more pronounced when the market is healthier under the hood. When you have 1+ year of down only all risk gets wiped from the system, which creates conditions for higher conviction players to step into the market and buy their favorite assets.
I still believe the rest of the market needs BTC’s cooperation in order to move higher.
PORTFOLIO UPDATES
BTC isn’t performing, so there’s no need to take on the extra risk in the portfolio.
For the foreseeable future, the strategy is to own outperformers + a healthy amount of cash.
The opportunity for upside in quality asset is extremely asymmetric at the moment. See the “Concluding Statements” for a little more color.
The Levolytics strategy has performed particularly well as of late.
I’ve kept things simple, and and let my system run its course.
Only 23% away from breakeven!
CLOSING STATEMENT
In my opinion quality assets in Crypto are more worthwhile owning than ever, especially when price action begins to look constructive.
Here’s why:
There’s a lot of dead capital in Crypto that is growing increasingly impatient, and waiting to be rotated
There are very few good projects, so that money has to squeeze through a very tight hall way
The ability to create onramps for these assets via exchange listings + investment vehicles is more accessible than ever
These conditions could result in hasty, and violent repricing events as the opportunities arise.
Caution is always warranted if BTC isn’t cooperating, but the barbell of owning these select special assets + cash seems like the ideal strategy moving forward.
That is the most likely path forward for the Levolytics book, and as always readers will get the updates along the way.
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.