Well, we got the flush out today. We hope you listened to our advice and haven’t Longed into new positions.

When Open Interest built up as it did with Funding going massively positive, sh*tcoins on SOL all pumping, and Twitter being relatively euphoric, this tells us how the market is positioned and, more importantly, how aggressively it's positioned. 

In this case, everyone was ape'ing into new Longs and paying a large premium to Shorts to be Long. This setup has historically resulted in relatively violent flush-outs (Longs being flushed, price going lower), which is why we have emphasised caution rather than continuing to ape in. 

And that's what we've got, so it's all good.

Disclaimer: Not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. “One Glance” by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. They are not signals, and they are not financial advice.

Yes, the flush-out is good

However, we hope you're still holding your Spot positions. If you have great entries at low prices, you don't really want to give those positions up. If in doubt, zoom out. The last three months have seen prices of altcoins double/triple, so a 15% or so flush out is fine, even healthy; just don't let it scare you out of your entire position.

 Again, this is why we have said to be cautious but maintain Spot positions. 

What's next? Things might get rough from here on.

If dips then come, start scaling into the attractive opportunities - this means getting into coins that are down a lot from their highs but have been great performers recently. Our general feeling is that the macro markets are going to be range-bound/trade lower in the coming month or two as rates are re-rated higher, as too much easing has been priced in.

If the ETF scenario around crypto didn't exist, we would have said crypto won't be immune to this, and we'll likely get a more extended sell-off. Thankfully, we have the ETF situation on the horizon.

But here's the big question. "What if the ETFs aren't approved?"

So, do the ETFs get approved or not? 

Who knows... but, the communication AND action of the SEC so far suggest that they will be approved. 

The SEC has never entertained an ETF, but now they're communicating hugely with applicants. 

Why bother with that and spend your/their resources if they won't approve? 

However, our concern over the last day is that Coinbase shares have sold down significantly from $180 to $149. Also, there were big insider sellers over the past month. 

Do they know something we don't? It's hard to say.

But what then goes against this is that the OI on the CME for Bitcoin for the TradFi guys is still high, so they haven't closed positions yet. 

Alongside this, the Nasdaq and S&P have sold down on the first trading day of the year. This is likely the pricing back in of rates that need to go higher, but it's mostly Funds selling their positions in 2024 rather than 2023 so they can defer the tax for another year. 

What happens if the ETF aren’t approved?

Well, what happens depends on whether they are rejected or delayed.

Rejection is simple. We think the market will get armageddon for a week. However, in that scenario, the smart thing to do would be to be a buyer a week or so later. 

If the ETF decision is postponed, what happens in the market next will depend on the reasons for the delay. Either way, a postponement would encourage us to continue with aggressive dip buys. 

Cryptonary's take

We still think the ETFs will get approved, but Smart Money selling Coinbase shares does scare us slightly. 

Either way, we are maintaining positions and looking to add a strong portion of USDT in the coming months to our portfolio to buy up any major dips. 

Ultimately, we've got the past few months right, and this last week or two, we could have gone more gun-ho, and we didn't, probably massively protecting our spare capital. 

For now, the best play is to maintain positions and sit tight until the ETF decision, then re-assess. 

Long-term, we are still in a bull market. Macro is likely to be crap over the next few months, so that should provide us with some good dip-buying opportunities. 

What prices these dips will be to is hard to say a week before the ETF decision. Let's wait on this decision and go from there.