Are Financial Conditions Finally Turning for Crypto? | Trading The Markets Aug. 06, 2026

0:06Kris Bullock:Happy Wednesday, everyone. We're live. I hope you didn't catch that conversation before we went live. But if you do want to catch those, just join us in Discord. We hang out here before the show, and you can also take part in the live conversation. This is Trading the Markets here every Wednesday. This is the show where we do TA. We look at the markets. We look at crypto, chart some price action. And of course, we take all your questions to see what's on your guys' mind. So if you have any questions, just drop them in the chat and we will get to whatever we can. Obviously, we weren't here last week, so we have quite a show for you guys today.

0:45Kris Bullock:We're happy to be back. And you know what? Let me shut up and let's just get right into it. Chris, happy Wednesday.

0:50Bijan Maleki:Happy Wednesday. Yes, I'm glad to have you back. Glad to be back. Glad that the show is working this week. I was so bummed last week that we couldn't make it work. But anyway, yeah, good stuff. The good news is that things are actually a lot better this week than they were last week anyway. So I'm going to have a lot more fun reporting on good news today than I would have been all doom and gloom last week. So for what it's worth, I guess it worked out.

1:17Kris Bullock:Nice.

1:17Bijan Maleki:Um, so yeah, so I want to start, uh, as you know, I've kind of built this financial conditions dashboard and it's become my go-to. Uh, I watch it a lot. I kind of check it every day. And so I want to start by talking about that because, um, it's relevant finally, again, for the first time in, in, well, several weeks now, if not even a couple of months, uh, we're starting to look like we might be getting back into a favorable state of affairs. So let's start by looking at this financial conditions, this metric here. And this, just quickly to recap, this measures real yield, credit spreads, the dollar index, and equity volatility.

1:56Bijan Maleki:And it is for the first time at the lowest it's been since it flipped red back at the beginning of June. So for the first time in eight weeks, give or take, we're at the lowest point. And 50 is the threshold for coming off of the tight red bars into a more sort of gray neutral state. And right now we're at 51. So we're inching very close to going from red to neutral. And as I've mentioned a number of times, even a neutral state is favorable enough a lot of the times for things to start moving. And so we're close. We're really close. It's hovering back and forth between 51 and 52 right now, which is good.

2:39Bijan Maleki:Also another noteworthy thing, looking at the S &P 500 market breadth, it's the highest that it's been in over two, I think two years going back to November of 2024. So almost two years, not quite, but like that's pretty significant too. It broke out of this range that it's been in and it's the highest. So this is a very healthy market signal to see market breadth be this high. It's telling us that it's not just an AI story that's kind of running, you know, that's doing well market-wise. Also, other big things. I don't know if you, I think the last show we had, not the last, well, not last week, obviously, but the previous show to that, I spent a segment talking about some of the things I wanted to see in order for things to start looking good.

3:24Bijan Maleki:And two of the big things that I mentioned were for GlobalM2 to break out of this long sideways consolidation range that it's been stuck in since the middle of April and for the dollar index to get back down into this long sideways range that it's been in for many months as well and we can see both of those things have happened. The dollar, I'm sorry, the M2 did break out. It set a significantly higher high and the dollar has dropped back down into the range. So good things are happening. This is what we need to see. We're moving in the right direction and then finally another thing I wanted to see that I mentioned I want to see the VIX cool back down.

4:03Bijan Maleki:It had been spiking up here in the 20s for several days in a row. It did have a spike today, but it dropped way back down. It was just a quick, quick spike. And it's down on the day. It's hovering down in the 15. So that's good too. We're seeing volatility get tempered. We're seeing bond yields come down to stabilize. That's going to ultimately impact real yields. So like I said, all of the things are starting to come in place. And so it's not surprising that off the back of that, we're seeing all-time highs in the S &P. So stocks are doing well. Now, the big question is, does it translate into crypto?

4:39Bijan Maleki:And that's what we need to see. So that brings up the next phase. Here's looking at Bitcoin, and we can see that Bitcoin, this shaded area around it indicates what's called a volatility squeeze. This is essentially just the Bollinger Bands getting really, really tight. So the Bollinger Bands have been tight for quite a while. They're usually not, you can see some of these other shaded areas they typically don't do this for this long of a period of time they did you know back here it was but otherwise it's usually just like a week a week and a half tops whatever it's been like this for quite a while since uh the middle of july really so um this typically means we're due for a breakout uh it doesn't necessarily say which direction the breakout's going to go but based on looking at the financial conditions looking at the stock market you could make an argument that the odds are more in favor for a breakout to the upside, particularly since price has actually been trending up.

5:34Bijan Maleki:Also, we had a DMARC9 that triggered here, and we've had a couple of trend reversals that have triggered. So it's showing that the winds are blowing in favor of an upward breakout. Now, of course, this isn't a guarantee, but I guess there's more signal that's signaling upwards price action than downwards price action. So, and I don't know when it's going to happen. It might not happen for another week. It might happen tomorrow. But things are being, things are squeezed. Volatility is squeezed. And at some point, it's going to break in one direction. And so that's interesting to me too. Yeah, I think overall, not a lot of crypto looks great, which I'm going to dig into.

6:15Bijan Maleki:There's a few that look good on the daily. There's a few that look good on the weekly, which I think we'll talk about. But outside of this, I still think we're largely in a bottoming pattern overall. There's nothing really that's changed in terms of like new users, like new retail onboarding from US, like through the Coinbase premium. That's reflected there. That hasn't changed at all. ETF flows haven't really changed. In fact, they've been negative the last two weeks, just below negative. It's not like a huge outflow, but it's mostly breakeven, but slightly in the red. So we're not really seeing a lot of money coming into Bitcoin, hence why we're seeing this volatility squeeze basically.

6:53Bijan Maleki:But with financial conditions improving, that's going to potentially be reflected in things like ETFs potentially. So we could see inflows coming off the back of that. Again, it's still early. We're not quite there yet. I mean, we're still in the red here. I need to see gray. So once we get a gray, that could be the trigger we need to break out of that volatility squeeze and get some good ETF inflows, get some good upward price action. Whether that's going to trickle down into the rest of crypto, I'm still pretty skeptical on that. Like if I look at the crypto altcoin season, I think there's only like 18 tokens that are even in the green out of the top 100 in the past 90 days.

7:36Bijan Maleki:That's pretty ugly. there's several more that are outpacing Bitcoin. So there's a total of 44 that are outpacing Bitcoin. But of those 44, only 18 are actually in a green uptrend. The rest of them are just not losing as bad as Bitcoin. But there's some that we're going to talk about today. Of course, there's the big common ones that seem to always be there, like Hyperliquid, Uniswap, NIR keeps coming up, Ondo keeps coming up. So we'll get into some of those. But overall, the rest of crypto is still pretty meh. Like if we look at crypto market cap or crypto breadth, we're hovering down in the high 20s, high 29 % right now in terms of the top 200 advancing.

8:18Bijan Maleki:And that's been downtrending for a while too. So not a lot of crypto doing well. It's a lot of the same ones that we talk about each week, but there are some interesting things. And then finally, I want to, we'll look at a few specifically, but I want to go through looking at a lot of crypto through the lens of this Williams alligator indicator, which is kind of a fun indicator that I pull up every few months or so, and it gives an interesting perspective. It's a good way to look at things and sort of compare like relative strength. Like what is an example of a really good looking chart versus a bad looking chart.

8:52Bijan Maleki:Unfortunately, Bitcoin is not a good looking chart in this regard, but we'll dig into a lot of these. So that's kind of where I want to go. But yeah, that's kind of the quick nutshell. What's going on? I think things are trending in the right direction. Financial conditions are easing off. We'll see how much it trickles into crypto, but that's kind of the nuts and bolts of where we're at right now.

9:14Kris Bullock:Yeah, absolutely. Falls in line with Jamie Kutz's trend chameleon as well. I think I just saw it yesterday. It was eight. I think it was 18. And then yesterday, briefly for a little bit, it was 21 out of the top 100. But that was like over 24 hours, almost 24 hours ago now. And Bitcoin's risk off on his indicator as well. Bitcoin was actually one of the signal changes to the downside that changed in his trend chameleon. So right in line also shows me Jamie Coots's trend chameleon indicator is awesome. So check it out if you haven't. Chris, I saw some, I guess we're starting with Bitcoin first, because I saw some very interesting coins in that top 18 that we have kind of forgotten about that I definitely also want us to look at.

10:03Kris Bullock:But yeah, go ahead, pick the chart and let's dive into it. Oh, actually, no, sorry. Before we get into that, I had a question for you because NASDAQ, right, just yesterday, believe it hit an all-time high. We had the SpaceX earnings, which beat S &P, sorry, right, which beat the earnings. But I'm seeing some people saying it's a relief rally and not to buy into it. And obviously, that greater effect is going to impact crypto. What are your thoughts on that?

10:33Bijan Maleki:I mean, it's funny. if you'd asked me on Friday or Saturday or Sunday, I would have made that same argument. I was kind of coming into this week, very skeptical, thinking that this week was going to kind of be the tell in terms of how the Warsh press conference was processed and absorbed, you know, and so far so good. I can't find it. Anyway, I should have bookmarked it. But But basically, I had made a chart that showed like I noted where like right during the worst conference. And you could see it was it was an S &P futures chart, mini futures, and it dropped way down right after the worst speech.

11:14Bijan Maleki:And then I was like, I want to see how this closes out the week. Like if it closes out the week in the in the green or at least above the level where the worst press conference was, then that will tell me that like the market largely absorbed any of the sort of hawkishness that came about from his speech. And it actually closed the week out in the green overall. So I think overall we're seeing, and then I feel like this week is going to be the tell. As long as this week kind of goes up, I feel like, again, any of the hawkishness will have been absorbed. I think that's also being reflected by bond yields, which are trending down.

11:53Bijan Maleki:They've continued to trend down. They've broken down below their daily moving averages. Well, I'm just looking at the 10-year and the two-year, but they're proxies for the bigger ones too. And so they're trending down. And so to me, that's telling me that even without him actually pulling any levers, the market is reacting favorably. I think just across the board too, the rest of the financial conditions entering into more favorable territory too is telling me that like um i think we're i don't think we're necessarily looking at a relief rally here necessarily um i guess time will tell but my gut is uh particularly if this week closes with a solid green overall like on the weekly candle um i'm you know and if that happens and financial conditions ultimately close the week under that 50 threshold that 50 threshold and get into sort of neutral territory at least, then I think that, you know, we're looking at a decent, I don't know.

12:54Bijan Maleki:I don't know what we're looking at, but I just don't think it's necessarily like a relief rally, a dead cat bounce kind of thing like that. I think that there's more to it than that. Also, the Kospi continuing to show strength since then, I think is indicative too of risk appetite coming back on. And I think too, the big deal with situational awareness, I think that that actually will act as like a stabilization mechanism, you know, because it's sort of taken out of the hands of a somebody who's a little bit more risky and put into the hands of somebody who is more risk averse, who operates with a different risk profile, who's going to manage those positions differently.

13:30Bijan Maleki:And I think that that's going to help reduce some of the volatility that we're that we were seeing, certainly some of the selling we were seeing in the AI sector. So all of those things combined, I think, is going to lead us to there's there's more to this than we think. Particularly since it kind of has come to light that a lot of the selling, particularly over the past two weeks, was the product of situational awareness, you know, and the leverage and the unwinding of a lot of these positions that were over leveraged and things like that. And so, yeah, I think that we're potentially in the clear for now, but we'll see again, ultimately.

14:11Kris Bullock:Yeah. All right. Yeah. Just as a reminder, I think the 30 year rates have crossed or neared 7%, which is pretty high. Crazy. Yeah. No, pretty crazy. All right. Let's see. So we have the Bitcoin chart up and I think you were looking at the alligator. Yeah.

14:34Bijan Maleki:So let's look at the Williams alligator. So this is on the weekly timeframe specifically, because I wanted to get a sense of like which assets are really actually showing strength and are in real true weekly solid uptrends, you know, that are actually like bucking the bull market or the bear market rather that the rest of crypto is in. And this is a good way to visualize that. Obviously, it's just one way. You guys know I use tons of different indicators, but this is just one way. And so we can look at Bitcoin and we can see, obviously, this is a perfect example of a bad looking chart. You know, this is sort of the bull, I keep saying, the bear market exemplified.

15:12Bijan Maleki:You know, all three of these in the full downtrending order. This is an example of what you don't want to see. But I'll go through just the quick top handful, and then I'm going to dig into the ones that actually look good. So, you know, here's Bitcoin. Here's Ethereum. Ethereum looks a little better. You can see at least that one of them has started to round back upwards, but it's obviously still nowhere close to where it needs to be. Solana, kind of the same thing, but not as good as Ethereum. We'll look at SWE, kind of the same thing, more like Bitcoin than the other two, honestly. But here's where it starts to get a little bit interesting.

15:51Bijan Maleki:Let's look at Tron. Tron is like, well, it's a complete opposite picture. Now, it's not awesome. It's more just like flat, but at least all of the moving averages are in the order that they should be in to you know show that it's in an uptrend yes it is flat right now you know that's that's true but like this is more what you want to see you want to see green red blue that's the order that these need to be in and Tron is the complete opposite picture the rest of them not so much looking at XRP ugly B &B ugly you know to kind of round out round out the rest of the big dogs in the top 10. But here's a few that look good.

16:29Bijan Maleki:We know Hyperliquid is in that conversation. Hyperliquid looks good. Now, it's kind of rolling over, but it did. Hyperliquid has bounced. And Hyperliquid, as I've talked about in recent weeks, has been largely coupled with the NASDAQ. And we know the NASDAQ hit a major moving average, a 20-week moving average, and bounced perfectly off of it. So too has Hyperliquid. And it's showing some resilience. It's very, again, very coupled with the NASDAQ. And it's doing exactly what that's doing. So as long as the NASDAQ keeps going, I think Hyperliquid probably will go with it. So Hyperliquid looks good.

17:01Bijan Maleki:It needs to rebound though, because pretty soon we're going to get a crossover here and that's going to start to put some chinks in that armor a little bit. Next is Near. Near looks pretty... Hold on, I've got Near right towards...

17:20Bijan Maleki:Nier looks better than most, although it already is starting to lose its steam. It needs to bounce too. It was doing really good primarily off the back of this giant weekly candle that it had here where it went up like 58 % in this one week, and it sort of bled out ever since then. But it did bounce on this level here, on this major support level that it had cleared before that it broke out from. So that was a good sign. Obviously, it needs to continue this bounce and reverse this trend. It's starting to give back this sort of reversal that it had. But nevertheless, it looks a lot better than the rest of the crypto space, basically.

17:59Bijan Maleki:The next one that's caught my eye that actually looks pretty interesting is Pump. Pump isn't there yet, but it's in the process of going through that reversal. You know, it's got one crossover too. It's going to have a second crossover here. pretty soon. And then, you know, we'll have sort of all three crossed over before too long if it keeps up this trend. But it's put in some really mega weeks, like in the last couple of months, it's got a 36 % week here on the current week, it's up 17%. And it's generating money. It's, you know, it's doing well. So it's one of the handful that are generating a lot of revenue and, you know, doing the thing that it needs to do sort of with a real world audience that we know of.

18:42Bijan Maleki:So I like pump. Another one is let's look at Venice because we know that's been one that has been solid. Venice looks a lot like hyper liquid in that it, you know, had a huge rally has corrected, but obviously it's still all three in the right order and it's still sort of setting a, well, hopefully this stays as a higher low anyway and continues this bounce. But Venice is in the conversation of something that is, has been completely bucking the trend for the entire time. Ondo is another one that is really kind of jumping out at me lately. Ondo is another one of those that like, is, I think it's like accelerating out of the bottom.

19:25Bijan Maleki:Like, like, like you could say the, the pump chart was, or even the near chart to some degree where it's, it's not like been in an uptrend for a year, like Venice or hyper liquid necessarily, or for the year to date, But it's accelerating out of the bottoming pattern. It bottomed along with everything else. And it's starting to show more relative strength than a lot of the majors, you know, like the likes of Ethereum and Bitcoin and Solana and those. It's one of those that's like doing well. It has relevance because of its real world tokenized assets, that sort of thing. It's making waves and it's in the process of fully reversing this bottoming pattern and turning into a strong weekly uptrend.

20:05Bijan Maleki:It's coming out of a bottoming pattern, which I like. And so this is one that I feel like is something you want to keep an eye on to be looking for like a long term entry on. I'm not saying it's there yet, but I'm just saying that this is something that is showing significant relative strength coming out of the bottoming pattern. And I like the way it looks. So another one similar, another DeFi one is Morpho. Morpho looks good. Looks even better, honestly. Now, it's arguably a bit flat over the last several weeks. But look at this. I mean, look at, you know, this is what you need to see. The moving averages are all in the right order and they're generally all trending up now They've started to kind of roll over so it needs to break out of this a little bit But I think that this is another one that should be on people's radars.

20:53Bijan Maleki:I think DeFi Anything related to DeFi that's generating cash anything that's related to real-world tokenized assets is gonna gonna generate money is gonna have a a sort of Product market fit outside of crypto, you know that that sort of trad fi is gonna be interested in and this fits in that category Ando fits in that category. The next one, Uniswap, also fits in that category. Uniswap has been pretty interesting of late. Where is it here? One of these days I need to put this in alphabetical order. Let me just type it in.

21:34Bijan Maleki:So Uniswap is another one too that's showing strength coming out of the bottom. Just again, just like Ando, just like Morpho. I like this too. So we've had one crossover here. We're angling towards another crossover. Yeah, I mean, I'm going to kind of dig into Uniswap for a second, actually, and look at it through this lens too, because it's solid. It's looking solid. It's triggering. It flipped the megatrend green a few weeks back. It's worked its way back above the 200-day moving average cloud. It's got green dots on the weekly on the trading alpha indicator Like it's above the 20 day or 20 week moving average like a kind of across the board on all the indicators that I look at I'm looking at Uniswap going.

22:17Bijan Maleki:This is a this is a breakout. This is a good good-looking setup Now the only reason that I maybe have a little bit of pause with it Is if I look at it like well, let me let me go back or here Let me if I look at it through just like horizontal levels, it's got a little bit of work to do

22:46Bijan Maleki:kind of here. So it had set a low here. If we look here, we can see there's a bunch of touches down around this level. There's a touch here, there's a touch here, there was a big consolidation here, and then even another sort of consolidation range kind of at the bottom of these wicks, you could argue. And so this has been like a big kind of support resistance cloud for quite a while. In fact, I'm just going to draw like a box and show you what I mean by that.

23:18So yeah, so we've got this range here and big cluster here, cluster here, and then you can see

23:27Bijan Maleki:it came up butted up against the bottom side of it here, butted up against the bottom side of it here. And then really, as it came out of these lows, it's actually run up against resistance again. Like it wicked up to the top of this level perfectly right on the line, the same line that it came down and touched here. Let me turn my highlighter on so I can show you. So I'm talking about this level here, and then it came up. If you can't see the wick, it touched right off here and then got rejected and has kind of been rejected and is sitting on a reversal signal here. So it's at resistance, basically, even off the back of that big rally that it's been having out of the breakout, out of the, you know, coming back up above the 200-day moving averages and things like that.