Mixed Signals

Investors,

One of my favorite indicators from Lux Algo has been highly effective for Bitcoin.

Right now, here’s what it’s showing:

The dynamic range, shown in blue, worked perfectly as support in the June 5th retest.

But we’re coming right back into that range once again.

Of course, the trend could shift and flip red; however, this would require a decline (and daily close) below $98.2k in order to trigger the bearish signal.

Interestingly, Bitcoin is also flashing this same signal on a relative basis vs. the S&P 500, while also retaining a potential “breakout, retest, rebound” setup on the prior highs.

The fact of the matter is that Bitcoin has outperformed equities, particularly in a strong risk-on environment… and I’d be willing to say that we’ve been in a strong risk-on environment off the April 2025 lows.

Don’t believe me?

Then explain why the Ark Next Gen Internet ETF (ARKW) crushing the S&P 500.

This ratio of ARKW/SPY is trading at its highest levels since January 2022.

The key difference between now and then is that this ratio was falling like a 100kg stone in water & making multi-quarter lows, rather than making new multi-year highs.

So as we think about these developments in the market and how to interpret them to make the best decision possible TODAY, here’s my key conclusion:

Risk-on environments are common characteristics of uptrends.

Sustained uptrends produce bull markets.

Bull markets produce profits for investors.

If we want to produce profits as investors, the best thing to do is to align with the uptrend and squeeze as much out of the risk-on environment as possible, while doing our best to control and manage risk.

What does that mean, tactically?

Let’s dive into this.