Welcome đđ˝
Today, I share another DATA-DRIVEN indicator that Iâve added to the Jedi Tier; itâs that good.
Check out its performance over the last 3 cycles đđ˝
If you donât know what the Jedi Tier is, you should check out my newsletter series âSelling the Topâ đđ˝
âWhy is data-driven in caps and bold? Chill, Daddy.â
Because that is the difference between us selling near the top or holding our bags all the way down to the bottom.
Most people have no fu***** clue when theyâre going to sell their bags. I donât blame them đđ˝
He summarises the top responses.
The difference between data-driven (Jedi and Normie tier) indicators and those in his summary (pleb tier) is
Data-driven: we can assess the performance of the indicators against historic data going back 3 cycles.
Pleb tier: ambiguous, pie in the sky type sh**.
I have 7 figures allocated to crypto. Ambiguity is the last thing Iâm looking for in an exit strategy.
Think about how vague those signs are.
âCoinbase at #1â
Why are we assuming that people coming back to the space have deleted their Coinbase app and need to redownload it?
What about people who donât use Coinbase and use Kraken instead i.e. rest of world?
#1 what? #1 app in all categories? #1 in the finance category? #1 for how long? Does it just need to reach #1 or stay there a while? What if itâs #2?
âNFTs pumping asfâ
Why NFTs and not memecoins?
Define âpumpingâ
âCompanies raising too much $$$â
How much money is too much money?
Any companies in Web 3 or just dApps?
Is it when we see two companies raise a significant amount or is it more?
I think you get my point.
â ď¸ DISCLAIMER â ď¸
The content provided by PROJECT 10X PTY LTD (Filip Brnadic) is for educational purposes only and is not financial or investment advice. PROJECT 10X PTY LTD is not a licensed financial adviser under Australian law.
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With that being said, hereâs an indicator I came across recently that is anything but ambiguous.
Itâs Gangsta.
True Strength Index
The true strength index (TSI) is a momentum oscillator used to identify market trends and reversals. Remember, a bull cycle top and bear market bottom are simply the start of a reversal.
The TSI fluctuates between positive (bullish) and negative (bearish) values.
When the blue TSI line crosses above the red signal line, we have bullish momentum, and when it crosses below it, we have bearish momentum.
Overbought and oversold levels will vary by the asset being traded. Iâve identified these levels for BTC below.
Picking Cycle Tops đ
Primary Signal: when TSI breaks above the 63.5 level and then reverses below it on the 2W time frame, it has marked the local top in the last 3 crypto cycles.
Secondary Signal: To add further confluence that a reversal is underway, we can look to when the blue TSI line crosses the red signal line as shown by the orange circles. This is typically a sell signal for traders and has marked the end of a bull run and a great shorting opportunity in the last 3 cycles.
Now, letâs zoom in and see how it performed as a cycle top indicator.
2013
Distance from highest price: -27%
Duration to highest price: <6 weeks
The TSI warned us that the bull run was over, mere weeks before the price fell out from under it.
2017
Distance from highest price: -29%
Duration to highest price: <2 weeks
TSI came through with another cracker of a signal, within 2 weeks of ATH and at worst -29% off the highs. Keep in mind, this is still a good exit given that most retail investors would have held their bags all the way to the bottom with the thought âIâll sell it as soon as it comes back to the previous ATHâ.
2021
Distance from highest price: 6%
Duration to highest price: <2 weeks
This was a picture perfect signal for the first local top of the 2021 bull run. TSI gave us a sell signal within 6% of the ATH and less than two weeks before BTC topped.
Final Remarks: Investors should be on high alert as soon as TSI breaks the 63.5 level. This is where it is important to
âĄď¸ have another 26 indicators as confluence đ
âĄď¸watch the lower time frames (D1, H4) to see if there is a market structure break (MSB), such as the April 2021 local top đđ˝.
Picking Cycle Bottoms đ
It is fantastic at picking market bottoms.
Primary Signal: when TSI breaks hits the -0.9 level on the 2W time frame.
2015
Distance from lowest price: 40%
Duration from lowest price: <2 weeks
This is still in the early years of BTC. TSI gave us a buy signal at ~$250. The lowest price it got to was ~$150. It then proceeded to run up to ~$20,000. At that point, who gives a f*** if we bought it at $250 or $150? Thatâs an awesome entry and an 80x return.
2018
Distance from lowest price: 0%
Duration from lowest price: 0 weeks
Itâs clear that the TSI is a fantastic tool to add to your arsenal as a bottom signal.
2022
Distance from lowest price: 12%
Duration from lowest price: <22 weeks
That low wick in November 2022 can be attributed to the armaggedon that was FTX. If it werenât for the drama that unfolded this indicator would have picked the cycle low, again.
Even with the FTX debacle, the fact that this indicator gave us a buy signal 12% off the lowest price is a great entry.
As youâre probably aware, Iâve given you 27+ indicators backed by hard data so that youâre better equipped to exit near the top of the next bull market.
I also have over 30+ indicators to buy the bottom, which is why I was able to allocate 75% of my net worth with confidence at the bottom of the bear market.
But Iâll leave that for when weâre all cruising in our Lambos enjoying the bear.
Thatâs all for now. Catch you next week.
âđ˝
Filip