June 1: Sell in May Postponed to Sell in June?

Matrixport Lookout   May 31, 2020 16:00 3 分钟阅读


Trading Crypto with Eugene is a series of daily commentary of market analysis and trading advice shared by Eugene Ng of Matrixport, a veteran trader with 10 years of experience in top-tier global investment banks. If you like the article, please follow us here on Blockchain.News so you won't miss our future publications.
 
BTC shot up by $400 to make a high of $9,720 over the weekend with the trendline resistance capping it from making any further grounds. While volume was quite robust for Bitcoin, it was ETH that really outperformed (+12%) in the past 48 hours, driven by record ETH options ($20mil) traded on Saturday. For the past few weeks, there has been quite a bit of talk/shill/promoting of ETH, and I think largely driven by a combination of factors that I've described earlier (i.e., growing daily active addresses, more than 60 billion gas being used, $7bn in stablecoins and Greyscale's ETH demand). Other protocol tokens such as Cardano, Zilliqa, and NEO also followed the ETH move, albeit less exaggerated.  

I still have my doubts on whether an ETH-led or ALT-led rally somewhat lift all boats, my view is that this is a technical retracement from Bitcoin Dominance, re-allocation by funds from BTC to ALTS and new capital inflows (an example: a16z raising their mega $515mil round last month - where will they be allocating some of that capital to?). Besides, this month has plenty of macro event risks (Riots, China/US situation, Reopening risk, Jun 10 FOMC, Jun 18 EU summit, Jun 30 Fed US bank stress, and Fed purchase to decline from $2.4bn to $0.6bn per hour in coming months). 

Strategy? For those who have got your offers hit at $9.7k good on you, keep that on with a tight stop. There is obviously the risk of a scammy wick through to $10.5k, so you want to avoid that. Keep that short, and I think we should be targeting back to $9.2/$9k/$8.8k. For those chasing the vol move, as mentioned on Saturday morning, I've managed to add some vol and would start to cover and turn short once IV hits around 80-90%. Good luck.


BTC could break $9,700 decisively to trade for $10,300 and $10,500.. My bias is that we don't have that volume for BTC to trade through those levels. I still think we head back down lower before a move higher...

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A closer look shows you we are just bouncing up and down in this wedge... will be exciting when the bulls or bears can break either side, otherwise respect it until it breaks..


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BTC dominance chart shows that ALTs are likely to have more room to run, but how much more? Maybe when BTC hits 63% or so...


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Implied vol looks to be traded against the trendline support from earlier this year, which is why I bought some vol over the weekend... 

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