How to Read This Report
Most market reports tell you what happened last week. This report tells you what is happening to the underlying plumbing of the market right now. We track three critical pillars of risk:
1. Mean Reversion
We measure how far the price has deviated from the average cost-basis of long-term holders. When this gap is high, the probability of a sharp correction increases. When it is low, as it is today, the asymmetrical upside is at its peak.
2. Stablecoin Dominance
Liquidity is the lifeblood of crypto. By monitoring the ratio of stablecoins to total market cap, we can identify when the "dry powder" is ready to ignite a new move or when the market is "tapped out."