Over the last two weeks, we've outlined how we've been patient in buying dips.

Given the lack of demand observed on-chain combined with the growing macro uncertainty, the dip back to the low 40,000s appeared to be a low-conviction buy.

Since publication of those two notes, Bitcoin's subsequently lost a critical level of support and now hangs in a no man's land.

The same themes we've discussed over the last two weeks remain intact, so this report will serve as an interim update.

This is the video recording of our January 21, 2022, All Star Charts Crypto Weekly Strategy Session.

If you're a trader, you don't need to pretend to understand the underlying.

Money flow is the only thing that moves markets. Everything else is just noise.

We pride ourselves on always adjusting our thesis to new data and never being dogmatic in our approach.

In the case of cryptocurrencies, it's been made out that gold and Bitcoin are sworn enemies.

Bitcoin is the "better store of value," they argue.

This black-and-white mentality does considerably more harm than good to investors.

If you're a trader, your only job is to follow money flow, not to assert your views on the market.

We bring this up because, when it comes to gold, there are early but constructive signs developing, with the shiny metal beginning to work its way out of an 18-month downtrend.

In recent weeks, we've been making a point about the importance of the derivative markets. When leverage and open interest is as elevated as it currently is, futures markets tend to govern short-term price action.

One of the most effective metrics to gauge this data is through funding rates.

Not only do we use this data to get a read of the positioning of speculators to help shape our macro crypto thesis. We can also use it on a case-by-case scenario to find high-conviction short and long setups within the alts.

Let's start by addressing the question of what is a funding rate.

In yesterday's note, we outlined our patient approach in the face of this messy tape.

For the most part, we're sitting on the sidelines waiting for an uptick in investor demand to drag the market out of this correction.

Current price action is being heavily driven by the futures market, which will only serve to increase the probabilities of whipsaws and fake-outs that can wear on traders' emotional as well as their financial capital.

Additionally, when evaluating the altcoins, there isn't any edge in being positioned aggressively long.

As we'll explore in today's post, many names look vulnerable for further near-term downside, and even most of the leading alts have lost much of their bullish momentum over the last few days.

Let's dive in.

This is the video recording of our January 14, 2022, All Star Charts Crypto Weekly Strategy Session.

It's been a tough period for crypto-stock bulls.

While most cryptocurrencies themselves have done well since the summer, many of the most prominent crypto stocks and miners have been painful underperformers.

But, given that many of the biggest coins are in the process of forming potential tradable bottoms, there are early signs of this changing.

Many crypto stocks are also in a process of testing critical levels of support, and the risk versus reward is currently more in favor of the bulls over bears.

Before we dive into individual names, here's a look at the sector as a whole.

In Monday's report, we outlined how conditions haven't fully developed for a high-conviction dip-buy. We're anticipating a high concentration of whipsaws before these assets find a tradable bottom.

At the same time, from a risk-versus-reward perspective, the recent pivot lows are proving to be important levels of interest right now.

In a weekend note, we'd asked whether this was simply a retest of the crash low -- or whether it was still crashing.

Fast-forward today, and the market is respecting this level -- certainly an important one to be watching.

Over the last few weeks, we've been pointing to the growing leverage in the derivative markets exacerbating volatility.

In our last report, we also outlined how we're anticipating this to unwind in the coming weeks. This continues to be the key theme for the first quarter.

Additionally, a variety of metrics suggest the market is strongly in oversold conditions, offering a favorable level for long-term investors to add to spot positions.

Meanwhile, derivatives and macro conditions present a headwind for speculative dip-buyers.

This is the video recording of our January 7, 2022, All Star Charts Crypto Weekly Strategy Session.

Over the last week, we've been outlining how the market looks set to unwind out of this trading range.

High open interest combined with diminishing implied volatility, increased price stability, and thin futures volume all contribute to a scenario where the probabilities of a long/short squeeze are elevated.

We're still in elevated cash positions and, for the most part, still sitting on the sidelines.

In yesterday's note, we pointed to the growing leverage in derivative markets, explaining that we anticipate it unwinding in coming weeks.

Since we published it, we've seen an aggressive "sell" wall placed on FTX, the world's third-largest derivatives exchange by open value.

This caused Bitcoin to sell off and created a clear zone of supply.

On the other hand, Bitfinex, one of the most prominent spot exchanges, has a monster "buy" wall placed just under current market prices.