DN05 | Anatomy Of A Correction

An unresolved correction that still looks more like an extended shake-out than a structural change of fortune.

As we navigate the choppy waters of this extended correction, it is easy to get lost in the day-to-day volatility. The sentiment across the crypto market has shifted perceptibly in recent weeks; fatigue is setting in, and the bears are becoming increasingly vocal. This is precisely the challenging environment where emotion begins to override logic, and investors lose sight of the bigger picture.

Our job here is to look strictly at the signal. While the immediate price action is discouraging, we see a growing divergence between current price and the underlying macro reality. We are witnessing a fascinating tug-of-war between short-term technical structures, which are demanding a resolution, and long-term liquidity flows, which are screaming for expansion.

In This Issue

• Bitcoin Elliott Wave

  • Review of the near-term primary count (Wave C).

  • Long Term Technical Framework: The path to a Wave 3 extension.

  • Bearish Alternate: What a year-long correction would look like.

• Small Cap Stocks (Russell 2000)

  • Analysing the “Real Economy” breakout attempt.

  • The historical correlation between Small Caps and Crypto.

  • Current divergences between price action and liquidity.

• Global Liquidity

  • Tracking the Rate-of-Change (RoC) with a 90-day lead time on Bitcoin pivots.

• Business Cycle

  • Update on the custom Macro Trend Oscillator (MTO).

  • Lagging industrial component metrics.