Defi, Denominators, and Deep Dives

Crypto price action is reshaping investor narratives (again). Here's how I'm looking to play it.

The narrative spotlight all weekend (and today) has been the Bitcoin Breakout. We’ll talk about it more in a moment, but let’s first take a look at the S&P 500:

It’s another rotational snoozefest in the broad markets, with the market inching up 25 basis points on the day.

And this is going to continue, whether you like it or not.

Here’s why.

The current vol in the market is at 9%.
Spot VIX is at 17%.
August VIX futures are at 19%.

There is a persistent demand for hedging, especially as we head into tariff deadlines in the U.S.

But if everyone’s hedged… then you can’t see downside. There’s too much robust hedging under the surface, and any dip is bought as dealers rebalance their positions, providing natural support.

We’re almost on the other side of July opex. VIX futures expire tomorrow, with July equity options rolling off the book by the end of the week. Maybe once those clear off the board we can have more sensitivity, but given the fact that Aug is still at 19% suggests that we have an anti-complacent market.

The grind higher will continue until the hedgers throw in the towel.

Change The Denominator

Sometimes, the most telegraphed breakout pattern in the world manages to work. Bitcoin cleared 112k and now has a new “price floor” at 118k.

I’m now looking at some of the other tokens for plays… but if you’re going to do technical analysis on them, you’ll need to do it twice.

Here’s a chart of Ripple (XRP):

It had a great push in 2024 and is now (potentially) emerging from a base for another move higher.

Yet this is XRP in USD terms… we also want to see it in BTC terms.

This is a weekly chart of XRPBTC. The structure looks a lot different! A multi-year base and break is forming that could lead to some serious outperformance.

Breakout Setup - Galaxy

Galaxy Digital (GLXY) is a solid momentum name that has plenty of narrative tailwinds behind it. They’re into data centers and digital assets, with some kind of an AI kicker.

When I’m stalking a setup, I want to focus on where the actual liquidity is. That means I’m not going to wait for a confirmed breakout to new 52 week highs. Instead, there’s a hidden level at a place called a “volume shelf” just above 22.

The stock is right on the edge of clearing that major liquidity zone that’s been there for years… and some smart call options could be worth a bet into these levels.

DEFT Deep Dive

The hottest trade in town is the “announce a crypto treasury” play. Names like SBET and BMNR have been trapping shorts and ripping higher, but just because your company now owns some Ethereum doesn’t mean you’re going to be a good steward of capital.

Defi Technologies (DEFT) is a name I’ve been following for a while. They recently uplisted to the Nasdaq and have an interesting business model of a “crypto bridge flywheel.” That can start providing some parabolic action.

I’m lining up an interview with company leadership, and should be ready to go this week along with a comprehensive look into the value proposition of the company, and how it could be a much more sustainable bet on the crypto ecosystem.

Stay tuned!