Crypto Alpha Report - January 14, 2025
Happy Tuesday, friends! As the market digests a favorable PPI print today in anticipation of tomorrow’s CPI print - I’d like to remind you of the most important tool you can possess to grow your trading and investment account.
It’s not alpha information (although that can help). Allow me a quick minute to rant about ‘alpha,’ even though I understand the perceived irony of ranting about the concept of alpha while the title of my report is the Alpha Report—mea culpa.
The idea of Alpha is often referred to in the trading and investment circles as the Holy Grail. To be frank, within crypto, most people perceive alpha as Knowing when a token will pump and when it will dump. In traditional finance, there’s a word for that: insider information/insider trading.
There is a lot of that inside crypto. Whales or insiders can easily manipulate low-market-capitalization projects. The VC strategy of token allocation is successful in traditional finance and cryptocurrency. The prevalence of pump-and-dump groups also highlights the “success” of this process.
However, for you, the retail trader at the end of the totem pole, little alpha information is likely to come your way. Nothing you read on Crypto X is alpha; by the time it’s there, the actual alpha has already been acted upon. That’s why you never see a post of a
1M MC project going sideways, but you’ll see tons of posts once that same token has pumped to $10-100M. When ‘alpha’ becomes public, it’s generally just bait for exit liquidity.
I want to use this example to highlight something that both pump and dumpers and “whale insiders” have in common, at least the successful ones: a strategy. Sure, it’s not the most admirable strategy, but I guarantee you that if you talk to those successful traders within those circles, what they do, they don’t do randomly. They have a strategy; they stick to it, the strategy makes money, and they repeat the process.
Suppose you want to be privy to inside information. In that case, you need to embark on a long journey of rubbing elbows, entrenching yourselves within communities, and providing value to receive value in return. However, this is a dangerous strategy as there is no guarantee of success. Even if you are “lucky” enough to receive some inside information, you still have to pull the trigger at the right time. Nobody is going to spoon-feed you a profitable trade or investment.
I don’t recommend you follow this path; instead, I recommend you learn this lesson from the preceding: successful people faithfully execute a winning strategy when the odds are in their favor. If you’re serious about turning your trading into a business, the same should be true.
You’re not here to baselessly speculate every single day. You’re here to sharpen your saw, niche down your strategy, and faithfully execute it whenever an opportunity appears where you have positive Expected Value. You’re not here to force a trade, gamble just to be in a trade, or baselessly speculate. You’re here to make money.
The only way to do that consistently is to define, refine, and execute a strategy. Whether you want to trade leveraged high caps, spot buy meme coins, or invest in early-stage start-ups, you need a strategy.
Make today the day you commit to strategic trading and move away from senseless gambling.
To a better and brighter future, friends!
Crypto Market Macro Analysis
Stablecoin Dominance
After a scary wick to the upside yesterday, this metric closed firmly underneath resistance. Today, it has pulled back by -2.58% as markets surge broadly. Daily Momentum has turned to the downside, indicating that markets will likely continue to push higher.
Bitcoin + Stablecoin Dominance
Similarly, yesterday's large wick to the upside was driven by fears of a market breakdown; today, this metric is down -0.40% as of writing. This is potentially putting in a lower high, foreshadowing a lower low to come. Daily Momentum is hinting at a turn to the downside. This is a higher-risk play for capital rotation back into alts, but if this plays out, it will be lucrative.
Altcoin Price Performance Relative to Bitcoin
This metric is moving into oversold conditions while testing its 200 DMA as support. Currently, it is just a Daily Doji Candle, so it is more indecisive than a strong buy. However, it is an early indication of the potential wisdom of rotating back into altcoins for a higher push.
Bitcoin
A powerful rally from yesterday’s sweep of December’s Lows. In last week’s report, I highlighted the necessity of structuring long positions such that a sweep of $88,000 could be endured. Last night’s price action proves my previous analysis correct. Bitcoin is beginning to show promising reversal signs, and if tomorrow’s CPI print proves positive (which I expect it will), we should be able to trade up to $100,000 safely by the weekend.
Trends
5M: Bullish
30M: Bullish
1H: Bullish
4H: Bearish
D: Bullish
W: Bullish
Bitcoin has regained a Bullish Trend on all timeframes except the 4H; however, we have notably reclaimed our medium-term moving averages on the 4H time frame. The last time Bitcoin broke above our 4H moving averages, we rallied to $102,000 within the next three days. While Bitcoin remains in a consolidation regime, strong support at $90,000 has been reconfirmed. Long trades have a good R/R here for this week as long as the 4H moving averages act as uptrend support.
Key Levels
POC: $94,275
VWAP: $96,057
Value Area High: $96,952 - $97,811
Value Area Low: $94,304 - $95,163
Next Liquidity Zone Above: $97,544 - $98,547
Next Liquidity Zone Below: $93,685 - $95,124
Currently, Bitcoin is in a meso uptrend. Price action shows consolidation above our 30M moving averages in a Lower High, Lower Low pattern. The market is reaccumulating; however, as we are still in a time of low liquidity, keep leverage low and trade cautiously, as wild price swings are still possible. For today, it’s important for the 30M moving averages to act as support; closing below them would kill the current momentum. Therefore, I would close positions if price were to close below $94,800.
Strategy
Continue to hold long positions accumulated at or below ~$95,000. New breakout entries can be entered on a 30M close above $97,000. New pullback entries can be entered at or around $95,000 - however, monitor price closely - if we close below $94,800, I would go flat, as price would likely test $92-$93,000 at that point, and there’s no need to sit through that drawdown.
It’s not alpha information (although that can help). Allow me a quick minute to rant about ‘alpha,’ even though I understand the perceived irony of ranting about the concept of alpha while the title of my report is the Alpha Report—mea culpa.
The idea of Alpha is often referred to in the trading and investment circles as the Holy Grail. To be frank, within crypto, most people perceive alpha as Knowing when a token will pump and when it will dump. In traditional finance, there’s a word for that: insider information/insider trading.
There is a lot of that inside crypto. Whales or insiders can easily manipulate low-market-capitalization projects. The VC strategy of token allocation is successful in traditional finance and cryptocurrency. The prevalence of pump-and-dump groups also highlights the “success” of this process.
However, for you, the retail trader at the end of the totem pole, little alpha information is likely to come your way. Nothing you read on Crypto X is alpha; by the time it’s there, the actual alpha has already been acted upon. That’s why you never see a post of a
1M MC project going sideways, but you’ll see tons of posts once that same token has pumped to $10-100M. When ‘alpha’ becomes public, it’s generally just bait for exit liquidity.I want to use this example to highlight something that both pump and dumpers and “whale insiders” have in common, at least the successful ones: a strategy. Sure, it’s not the most admirable strategy, but I guarantee you that if you talk to those successful traders within those circles, what they do, they don’t do randomly. They have a strategy; they stick to it, the strategy makes money, and they repeat the process.
Suppose you want to be privy to inside information. In that case, you need to embark on a long journey of rubbing elbows, entrenching yourselves within communities, and providing value to receive value in return. However, this is a dangerous strategy as there is no guarantee of success. Even if you are “lucky” enough to receive some inside information, you still have to pull the trigger at the right time. Nobody is going to spoon-feed you a profitable trade or investment.
I don’t recommend you follow this path; instead, I recommend you learn this lesson from the preceding: successful people faithfully execute a winning strategy when the odds are in their favor. If you’re serious about turning your trading into a business, the same should be true.
You’re not here to baselessly speculate every single day. You’re here to sharpen your saw, niche down your strategy, and faithfully execute it whenever an opportunity appears where you have positive Expected Value. You’re not here to force a trade, gamble just to be in a trade, or baselessly speculate. You’re here to make money.
The only way to do that consistently is to define, refine, and execute a strategy. Whether you want to trade leveraged high caps, spot buy meme coins, or invest in early-stage start-ups, you need a strategy.
Make today the day you commit to strategic trading and move away from senseless gambling.
To a better and brighter future, friends!
Crypto Market Macro Analysis
Stablecoin Dominance
After a scary wick to the upside yesterday, this metric closed firmly underneath resistance. Today, it has pulled back by -2.58% as markets surge broadly. Daily Momentum has turned to the downside, indicating that markets will likely continue to push higher.
Bitcoin + Stablecoin Dominance
Similarly, yesterday's large wick to the upside was driven by fears of a market breakdown; today, this metric is down -0.40% as of writing. This is potentially putting in a lower high, foreshadowing a lower low to come. Daily Momentum is hinting at a turn to the downside. This is a higher-risk play for capital rotation back into alts, but if this plays out, it will be lucrative.
Altcoin Price Performance Relative to Bitcoin
This metric is moving into oversold conditions while testing its 200 DMA as support. Currently, it is just a Daily Doji Candle, so it is more indecisive than a strong buy. However, it is an early indication of the potential wisdom of rotating back into altcoins for a higher push.
Bitcoin
A powerful rally from yesterday’s sweep of December’s Lows. In last week’s report, I highlighted the necessity of structuring long positions such that a sweep of $88,000 could be endured. Last night’s price action proves my previous analysis correct. Bitcoin is beginning to show promising reversal signs, and if tomorrow’s CPI print proves positive (which I expect it will), we should be able to trade up to $100,000 safely by the weekend.
Trends
5M: Bullish
30M: Bullish
1H: Bullish
4H: Bearish
D: Bullish
W: Bullish
Bitcoin has regained a Bullish Trend on all timeframes except the 4H; however, we have notably reclaimed our medium-term moving averages on the 4H time frame. The last time Bitcoin broke above our 4H moving averages, we rallied to $102,000 within the next three days. While Bitcoin remains in a consolidation regime, strong support at $90,000 has been reconfirmed. Long trades have a good R/R here for this week as long as the 4H moving averages act as uptrend support.
Key Levels
POC: $94,275
VWAP: $96,057
Value Area High: $96,952 - $97,811
Value Area Low: $94,304 - $95,163
Next Liquidity Zone Above: $97,544 - $98,547
Next Liquidity Zone Below: $93,685 - $95,124
Currently, Bitcoin is in a meso uptrend. Price action shows consolidation above our 30M moving averages in a Lower High, Lower Low pattern. The market is reaccumulating; however, as we are still in a time of low liquidity, keep leverage low and trade cautiously, as wild price swings are still possible. For today, it’s important for the 30M moving averages to act as support; closing below them would kill the current momentum. Therefore, I would close positions if price were to close below $94,800.
Strategy
Continue to hold long positions accumulated at or below ~$95,000. New breakout entries can be entered on a 30M close above $97,000. New pullback entries can be entered at or around $95,000 - however, monitor price closely - if we close below $94,800, I would go flat, as price would likely test $92-$93,000 at that point, and there’s no need to sit through that drawdown.
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