The price action for June 2022 was marked by a drop in all Risk Assets (stocks and cryptocurrencies) from the first of the month followed by a recovery mid-June and now finally a retest of the June low by the end of the month.
The relative recovery of the mid-June bullish Retracement indicates the strength of these risk assets and may foretell future recovery and/or potential downside should the June low be broken in the near future.
Bitcoin BITFINEX:BTCUSD shown in this post recovered only 30% of the down trend during the pullback.
Ethereum BITFINEX:ETHUSD recovered slightly more by 35% of the down trend:
Meanwhile in stock world the S&P 500 represented by futures CME_MINI:ES1! recovered with more strength by 54%:
What these different relative strength recoveries imply to me is that the stock market is showing more signs of recovery than the cryptocurrency sector in the near term. The implication to this current relativity is that the stock market may recover its losses faster than cryptocurrency. It also implies that cryptocurrency is weaker and breaking the June low in the near future could lead to even greater losses relative to stocks and past price action.
Have you been following the 3 Arrow Capital default and conversely the negative impact on Voyager's token/stock price?
norok
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@Maxx_96, I read the news about them. They are symptoms of a crypto winter rather than a cause.
boji1
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Thank you for sharing your thoughts here. The logic/reasoning seems solid. I'm really inexperienced in the futures you mentioned here. Any suggested reading to come up to speed on those?
norok
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@boji1, I do not have any specific reading to recommend about futures but the first book I recommend all traders get and read is Reminiscences of a Stock Operator. It is coming up on 100 years old and just as relevant today to understand the psychology of markets.