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

The core call: Chris's financial-conditions index — a blend of real yields, credit spreads, the dollar index and equity volatility — has dropped to 51, the lowest print since it turned red roughly eight weeks ago. Fifty is the line between "tight/red" and "neutral/gray," and he says even neutral is usually enough for risk assets to move. He frames this week as the tell for markets after what he calls "the worse[t] press conference": futures sold off hard during the speech but the week closed green, and he reads that as evidence the hawkishness has already been absorbed rather than a dead-cat bounce. Supporting evidence he cites: S&P 500 breadth is at its highest level since November 2024; Global M2 broke out of its sideways range from mid-April; the dollar index dropped back into its long-term range; the VIX spiked into the 20s but is back down to 15; and 10-year/2-year yields have broken below their moving averages even as the 30-year has pushed near 7%. He also credits the Kospi's continued strength as a risk-appetite signal.

Why it matters for crypto — and why he's not fully convinced yet: Bitcoin is sitting in a volatility squeeze (Bollinger Bands compressed since mid-July, unusually long duration), with a triggered DMARK 9 and trend-reversal signals that Chris says tilt the odds toward an upside breakout given the improving macro backdrop — though he stresses this isn't guaranteed and the timing is unknown. The catch: demand hasn't shown up. ETF flows have been slightly negative the past two weeks, and Coinbase premium/new-user onboarding hasn't moved. He wants to see the conditions index actually cross into gray before expecting inflows to follow. Beyond Bitcoin, breadth is weak: only 18 of the top 100 tokens are in green uptrends over 90 days (44 are merely outpacing Bitcoin, which isn't the same thing), and top-200 crypto breadth is around 29% and still downtrending. His overall read: crypto is "largely in a bottoming pattern," not yet confirmed as trending.

Names he flags, via a weekly Williams Alligator screen for relative strength:

• Bitcoin, Ethereum, Solana, Sui — moving averages not in bullish order; Bitcoin is the textbook bad chart, Ethereum/Solana modestly better.
• Tron — flat but correctly ordered averages, unlike XRP and BNB, which he calls "ugly."
• Hyperliquid — closely coupled to the Nasdaq, bounced off its 20-week moving average alongside it; rolling over slightly and needs to hold or a bearish crossover looms.
• Near — bounced off support after a 58% single-week candle but is already "losing steam"; needs to reverse the current pullback.
• Pump — moving averages converging into a bullish setup, generating real revenue (up 36% one week, 17% the current week), but on the daily it's overextended — closed outside the Bollinger Bands twice in a row with a DMARK 12/13 cluster — so Chris expects a near-term pullback; the weekly trend is turning bullish but he flags prior false signals of the same shape. Market cap roughly $1B, ranked ~68.
• Venice — same pattern as Hyperliquid: big prior rally, correction, but structure intact; watching whether the current pullback holds as a higher low.
• Ondo and Morpho — both "accelerating out of the bottom," tied to DeFi/real-world tokenized assets, a theme Chris expects TradFi interest to follow; Morpho's averages are aligned bullishly but flattening.
• Uniswap — flipped its "mega trend" indicator green, reclaimed the 200-day moving-average cloud, showing green weekly signals across his indicator set. But it's sitting at a resistance cluster around $4.15; he wants a meaningful weekly close above that, and later in the show, with Uniswap up 8% on the day off its 20-day moving-average cloud, he specifies a close above roughly $4.50–$4.55 as confirmation of continuation.
• Zcash — recovered from a hack scare, bounced almost exactly off a 0.786 Fibonacci retracement, moving averages now trending up; Chris compares its resilience to Solana's in the prior cycle ("it refuses to die").
• Canton — in a sharp downtrend, roughly three standard deviations below its mean, at a DMARK 8 (watching for a 9). Chris's unresearched hypothesis is that Canton, given its ties to traditional finance and big banks, would have benefited disproportionately from the CLARITY Act and has instead been hurt by the recent market turmoil; its thin liquidity across exchanges also amplifies selling pressure. He says to avoid it until a bottom is visible.

Two names for the rest of the month: asked directly which two charts he'd feel comfortable holding through month-end, Chris named Hyperliquid and Uniswap.

Other flags: AAOI (viewer question) is up 41% on the week on optical/interconnect strength tied to the broader AI-sector bounce; it's back above its 200-day moving-average cloud and now inside the 20-week cloud, sitting at the top of its Bollinger Bands. Chris's preferred setup is a pullback/retest of the 20-day moving average near $109–110 to confirm support before buying, while flagging that some of the move may reflect an unwind of positions tied to a fund associated with Leopold Aschenbrenner (situational-awareness-related selling), which complicates reading pure TA. Gold looks constructive to him: it held November's support level on repeated tests, reclaimed its 10-week moving average, shows bullish daily divergences and is on the verge of flipping its weekly "mega trend" green; a close back above the 200-day moving-average cloud would, in his words, make it "pretty much game on" for a run back toward its all-time-high range. He also dismissed JST (a Justin Sun–linked token) as not a buy despite appearing on the top-18 momentum list, calling the chart "too good."