Day Trader Steve — Market Flow Newsletter No. 05
After a lengthy hiatus and rebrand, we return to an improved system.
• Intro & Last Edition Recap:
It’s been almost 7 months since my last edition - and for good reason. My contrarian views finally bit me in the ass. I was as surprised as anyone to find that the masses did in fact finally crack the code, and were right, en-masse, for the first time ever.
The 4 year Bitcoin cycle is ALIVE and well.
We are currently 7-8 months through a typical 12 month correction period.
We’ve been in a crypto bear market since October, 2025. There is no arguing against it. I take solace in the fact that I at least addressed those plausible invalidation levels back in November, 2025:
There are invalidation areas and technical zones which would make me wrong on all counts. [If] we lose the previous local low price of $75k, things start getting invalidated really quickly, so this is PIVOTAL. It would be very hard to argue we continue a bull run if that price is lost, even if we went down to the 200W EMA and bounced, it would be nearly impossible to run back up from $65k and create new ATHs.
Back in the first week of February 2026, we established a potential Bitcoin bottom wick into $60k - we recently retested that zone two weeks ago (06/05/2026), when we put in a small deviation wick into $59,080.
Today’s prices carry enormous confluence across the previous cycle’s All Time Highs, and the 2024 accumulation range which spanned February-October prior to the final upward push. This is obviously not a guarantee of a “true bottom,” but it’s an interesting level nonetheless.
• What have I been doing the past 7 months?
I took a 6 month break from trading between October to March - full stop.
Not one trade placed.
I learned. I researched. I fiddled. I rebranded.
It was absolutely necessary in order to develop an improved trading toolkit and execution system, after suffering enormous liquidation losses last October.
Over the past 90 days my new proprietary VWAP system has produced a 51.4% win rate at an average Win/Loss ratio of 2.35x
If this can be sustained (or even improved), it is an enormously profitable trading system.
• What Happened to Alt-season?
Hindsight is easy because it takes away uncertainty. It’s incredibly easy to look at charts after the fact and go, “Wow, how the fuck didn’t I see that coming?” It’s easy because there’s no uncertainty anymore - it happened, it’s over. When you’re looking at probabilities in real time and you don’t know whether trend will break or sustain itself, it leaves a lot of room for interpretation.
Bitcoin’s ATH run into the $126k zone disappointed a lot of people. I can’t even tell you the number of CT analyst projections talking about $250k-$300k this cycle.
NOT. EVEN. CLOSE.
We can therefore understand why Alts were even more disappointing. They are extremely high beta to BTC.
If the major crypto asset underperforms, it’s no wonder all these small MCAP Alts did effectively nothing. Huge Alts like BNB barely put in an 8x from 2022 cycle bottom to 2025 cycle high. ETH, not even 4x.
Last cycle bull run between 2020-2021 ETH put in a 47x move from around ~$100 to $4,700. 4x felt like a joke in comparison. Again, can’t even tell you how many CT analysts were calling for $10k ETH and beyond.
NOT. EVEN. CLOSE.
But this brings us to a very interesting chart: TOTAL3ES
Which is the Alts crypto market cap excluding BTC/ETH and Stablecoins (USDT/USDC etc.)
History does not repeat - but it certainly rhymes. The most interesting thing is that despite relative Alt underperformance, the entire MCAP is still 100% higher than it was during the 2022 cycle lows. Some of this is definitely dilution, more and more Alt tokens created, increasing MCAP while spreading capital thinner. However, an additional $130B is a meaningful jump in liquidity which can’t be entirely explained away by token dilution. There are real Alts thriving like TAO, HYPE, TON for example.
For a more comprehensive deep dive on Alt market structure, I’ve thrown together a quick macro pattern recognition video which compares current levels to the 2022 cycle lows:
Based on the above analysis video, it would seem at least somewhat probable that we are potentially through the worst. If we possess patience over the next year, we could find ourselves buying the absolute bottom prior to the next bull run.
As we move forward, I’ll start exploring the strongest charts and tokens which deserve your attention.
If you want to learn more about my new proprietary VWAP Trading system, be sure to join The Heron Room.
As always, Trade Smart, Reduce Your Risk, and Stay Safe!
— DTS
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