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Cryptos Drift Downward

Cryptos Drift Downward

July 24, 2023

Crypto RV Notes 7/24/2023

A) Overview

Support levels in major tokens broken at 30k BTC and 1.9k ETH… waiting for downside to enter into high R/R call option spreads on ETH and BTC

B) Charts.

· BTC – Price channel for YTD lows indicating 27k support, willing to scale in a bit higher for 27,000 to 28,300

· ETH – ETH price has been more horizontal recently with a intact range of 1750 -2k for the last 3-4 months

C) Execution: ETH/BTC Vol

With subdued volatility it is optimal to take upside risk with call spreads.

· 10day ATM ETH C 38 vol

· 30day ATM ETH C 35 vol

· 66 day ATM ETH C 40 vol

Currently 2k/2.2k calls for SEP are priced at $30 for $200 of profit. I am interested in buying these as spot touched 1.7k.

D) Catalysts: core driver to the market is FOMC, Rates, and USD. When in doubt price will trend when there isn’t a direct hard catalyst (as it is currently). With the overnight support break the risk is to the downside and best to be on the sidelines

E) RV Trade – Leaning short coinbase is possibly the best exposure against any longs due to the SEC potentially reviewing the ruling on XRP’s regulation as a security or not.

· 23B Enterprise Value, 8x REV, 0.6x SG&/REV.

· Stock has 3 drivers to justify price above $100.

i. Crypto asset prices have to rise

ii. % Trading volume increases to grow revenue back to 30-40% to justify 8x REV

iii. SG&A & SBA needs to be cut in half

· Probably enough headwinds to justify price drifing down to the breakout $88 level

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