This week’s newsletter was inspired by the Moontower newsletter, which is IMO the best options trading newsletter on the internet, full stop.

A week or two ago he shared his market dashboard — the essential data he looks at to intuit exactly what’s going on in the options trading universe.

I’ve taken inspiration, and today I’m going to share with you my revamped dashboard for the crypto markets.

This dashboard tells you a everything you need to know about the crypto markets broadly, enabling you to make data driven, insightful investments based in the reality of trading today.

At the bottom of the email, respond to the poll to let me know if you want me to include this dashboard every week.

If you have any recommendations to add or change what I’ve built here — click reply and let me know that too! Let’s make this as valuable a tool as we can.

Market Vibes

Crypto Reads

OpEd by Akash Networks CFO: The Case for Congressional Focus on Decentralized AI

Moontower: A Cockpit View of Q3: The inspiration for this Postive Skew post.

[podcast] CHAIN WARS: ETH vs SOL: The Steady Lads were joined by Kyle Samani, Managing Partner at Multicoin Capitol for a discussion on the great Chain Wars, crypto's moneyness, and why Kyle says SOL will flip ETH!

The ultimate crypto market dashboard

The key to a good dashboard is hinges are x things:

1. Fast to grok

2. Covers the things that matter

3. No fluff

That’s it. That’s all we need. Moontower is an options trader, so the cockpit Kris created over there is geared towards options. It uses stock and ETF prices to scan sectors, assets, and principal components of price action. It also focuses very closely on volatility, both implied and realized.

Our crypto dashboard follows a similar approach. I use broad basket ETFs to cover adjacent markets (stocks, commodities, dollar/rates) and small baskets of individual tokens to approximate sector coverage. I include some measures of volatility, but also focus on other momentum metrics to better fit the needs of crypto investment strategies.

Strap into the cockpit

Click to expand or zoom in to see the details:

For the rest of the newsletter today I’ll be explaining what this is and why I like it. Before getting I pat myself on the back though, I do have some things I want to improve.

First, this is too narrowly focused on crypto. That limits its predictive power. It lacks the rest of the world.

I spent some time working to add a few macro ETFs to cover stocks (SPY), tech (QQQ), gold (GLD), commodities (GSG), and bonds (IEI). I got annoyed dealing with date issues between bitcoin and these TardFi assets, and ran out of time. I’ll add them for next week.

Second, this focuses only on price action. It lacks some of my other key indicators. Those metrics wouldn’t fit into the same column structure, so I’ll have to come up with a different visualization.

Metrics like stablecoin market cap growth, bitcoin MVRV, bitcoin/ether ETF flows, the dollar strength index, and more are all crazy powerful indicators that are not (yet) in the cockpit.

If I built a simple website that would display all this data dynamically, would you view it?

Reply to this week’s newsletter and let me know. I’m considering building it.

What tokens are displayed in the cockpit and why?

I organized the cockpit around the majors and six important sectors.

The majors are the tokens that lead the ecosystems you’ve probably heard of: Bitcoin, Ethereum, and Solana. These are the largest, most liquid, and most talked about tokens and ecosystems. Everything starts here.

DeFi is what brought me into crypto in the first place and represents the strongest product market fit found the industry (excluding gambling). Decentralized finance represents the protocols that enable borrowing, lending, yield, and other core financial applications on a permissionless, decentralized platform. I chose blue chip protocols Aave and Uniswap here as they are huge, well known, and provide services across many ecosystems.

DePIN is short for Decentralized Physical Infrastructure. The idea here is to use crypto incentive schemes to create decentralized networks of actual hardware. Helium (HNT) is probably the most well known, providing wireless infra for phones and IOT use cases. I also included Hivemapper (HONEY), a Google Maps competitor, and Filecoin (FIL), a decentralized storage network.

Memes are popping off once again this month. In the crypto casino. there’s no asset as pure as a meme coin. It goes up when everyone collectively decides to buy. It goes down when everyone decides to sell. That’s it. Analysis over. I chose memes for the cockpit that are available on Coinbase. WIF is my favorite meme coin, but isn’t yet on Coinbase, so I left it out in favor of DOGE, BONK, and Shiba Inu.

Real World Assets are next, another sector I’ve written about previously. These protocols focus on bringing traditional financial assets on-chain — think treasuries, derivatives, and the like. Ondo is the leader in the space today, and Maker (now Sky after a recent rebrand) is both blue chip and well positioned for the next wave of Wall Street adoption.

Alt L1s are similar to the majors above, just smaller and/or newer. Avalanche (AVAX) had a great run last cycle and did well for me in Q4 of last year, Aptos is one of a new breed of chains that spun out of Facebook’s Libra program several years ago, and Sei is a popular, ultra-fast chain that’s differentiated itself (mostly from price action tbh) over the last year. There are so many more that could be added here, but for the sake of this being a single dashboard, I think these three have us covered.

Finally, I included a Layer 2 sector. Layer 2’s sit on top of protocols like Ethereum or Bitcoin or others, and open up new use cases thanks to lower costs or faster speeds. Ethereum has a robust (some would say fragmented) layer 2 ecosystem, represented here by both Arbitrum and Optimism. Optimism’s tech is actually the infra that support’s Coinbase’s own L2, Base (which does not have a token….yet). I also included Stacks, a layer 2 built for the bitcoin ecosystem.

There are other sectors I didn’t include. Gaming is a big one, for example. In my experience those other segments do not lead the market, and therefore should not be included on a market view dashboard like this.

Who knows what the future holds though — crypto changes fast. In the future I’ll update the dashboard to match market conditions.

Metrics that get to the point

The first few are obvious - skim as you want:

Last Price

This is the number we want to go up. In practice this will be the most current price available, but newsletter’s aren’t real time, so I used yesterday’s close for this.

Daily Return

The % change in the price since the previous day.

30-Day Return

The % change in the price from 30-days ago.

I prefer a 30 day view over a weekly view because crypto can be so choppy. A strong week does not create a trend. A strong month though….

Forecast

This is the forecast metric I use in my systematic system. It uses exponentially weighted moving averages, normalized using average daily volatilities (and some scaling to always sit between -20 and 20).

From a cockpit perspective this forecast is an excellent way to gauge overall market momentum. This is the only column with added color coding because it is such a fast and direct way to see what the market is doing in a glance.

Return Z-Score (7-Day)

The 7-day return z-score is the number of standard deviations the most recent daily return sits compared to the 7-day average. If today’s return is crazy above or below the short term norm, I want to know about it.

These z-score indicators are like canary’s in the coal mine. If you see a number over ±1, and definitely if you see a number beyond ±2, that’s your signal to Google until you figure out what’s going on. You could have a breakout on your hands.

Return Z-Score (30-Day)

Same idea here, but longer time frame to smooth out any short term volatility issues.

I wouldn’t ever buy or sell based solely on these z-scores. They are, however, a great tool to compare tokens on the same scale, regardless of price, volatility, and scale.

It’s also worth noting that crypto returns (and financial returns in general) are not normally distributed. You can’t apply the normal standard deviation assumptions and expect to have a good time. Finance is all about the fat tails.

Average Daily Volatility (25-Day)

Daily volatility is a key component of several of these metrics, and I think it’s helpful to see it on it’s own.

This metric indicates how much a token’s price fluctuates on average each day. Vol is both our friend and our enemy. More vol = bigger, faster swings up (and down). Check daily vol for a while and you’ll start to get a sense of how each of your tokens behave. This can be very useful when recognizing changes you may need to trade.

Correlation to BTC

Diversification is the only free lunch in finance, and the biggest component of all your shitcoins price action will be it’s correlation to bitcoin. Use correlation (and beta) to start to see if your favorite coin is actually special (“idiosyncratic” in nerd speak) or if you’re just leveraged on bitcoin.

In crypto, “the market” is usually just bitcoin. If you want to outperform, you have to find assets that don’t just do what bitcoin does. Diversify!

Beta to BTC

I wrote a post dedicated to bitcoin beta a few months ago. Beta to BTC calculates the sensitivity of a token’s returns relative to Bitcoin’s returns.

If bitcoin goes up, does your token go up more? the same? less? That’s its beta.

Similar to the correlation metric, I want to know which tokens and categories have beta to bitcoin. In some cases you want to diversify away from bitcoin, but in other cases you want to load up on beta and let it rip!

POLL: Do you want me to include the ultimate crypto dashboard in every email?

Portfolio Update

We are so back. I bought the dip this week following the sell off on Iran/Israel conflict.

The dollar continues to support risk assets with the easing cycle now underway, so I used the sell off to buy into some choice tokens at a discount.

I bought AVAX, SEI, and BONK specifically. I did a screen of the tokens that performed the among the best Q4 of last year (playing the markets recency bias), ran their numbers (crypto is a reflexive market), and selected these based on their current price action and relative strength (strong forecasts).