In today’s video update:
Are Bitcoin’s recent buy signals getting exhausted?
What alts caught our eyes? You won’t believe what one of them did :)
Let’s get started:
This is a free post. Sign up for a premium membership for just $1 today
At the beginning of May we were expecting the beginning of a new bull market as confirmed by the Golden Cross (50 and 200-day moving averages) and positive seasonality.
The recent rally coupled with increased market breadth (participation from altcoins) is confirming a new young bull has begun.
Additionally, some very interesting updates the institutional crypto front have emerged.
We're hearing from Coinbase that 60% of their volume come from institutions these days. (1)
The NYSE Arca is looking to list an ETF Backed by Bitcoin and T-Bills (2). This would be a genius move to increase bitcoin inflows and create positive pressure on the price.
Bitcoin halving is now less than one year away.
All of this is incredibly bullish for Bitcoin and should provide great support if prices move lower in the short term. We expect the new wave of adoption to take us past $60,000 in the months to come.
However, the shorter-mid term is not as rosy.
We've noticed a historical pattern of "pump and re-accumulation" coming out of bear markets.
Seasonal tendencies also favor a move lower for Bitcoin into July. Seasonality is not enough to hang your hat on but can provide a nice wind.
Our BTCUSD systems are still long. The last buy signal was generated the 29th of March at $4053 (previous buy was $3475).
Although we don't have a clear sell signal yet and just a trailing stop loss at the $6,200 level because of the excessive volatility, I believe at 54 days old this signal is getting quite long in the tooth.
A break of $6,900 would trigger some of our systems to get out
So far, we classically topped on a furry of bullish predictions of $9,500, $14,000 and new all-time highs... A few days ago it seemed like everybody had a higher target for Bitcoin.. yet the price has struggled since.
Personally, I was skeptical and I believe the picture looks more and more like this
The market tops on greed and conviction. Indifference is right around the corner... And the best buying opportunity will be after the fear and the panic..
After the market shakes out the weak hands once again and all of those who bought above $7,0000.
All in all, this should be constructive for Altcoins
As Bitcoin slides into indifference, the appetite for risk will shift to altcoins.
We're already noticing this in our Dominance model. The blue line is a measure of Bitcoin's dominance compared to other coins.
When it is above 0 it means that you should favor Bitcoin in your portfolio compared to other coins. When it drops below 0 we get what is generally known as an "alt season".
Early April we got a signal that it was time to abandon alt coins and only hold bitcoin.
So far we have not gotten an "official" signal for alt-season but Bitcoin's dominance and strength have fallen off a cliff since the top a few days back.
Our models see the most consistent and least volatile returns to come from the following coins: Monero, Ethereum, EOS, Dash
Over the past few days, we've been allocating from our Bitcoin portfolio into these potentially more rewarding coins.
Bitcoin Cash although weaker in the past few weeks, held up extremely well bouncing back from the bottom of the bear market and deserves being mentioned.
In fact, a portfolio of 50% Bitcoin Cash (BCH) and 50% Binance Token (BNB) would have been a winning combination and would have crushed Bitcoin since the bottom of the bear market.
For those interested in smaller tokens and trades that can move a lot - the likes of Fetch.AI, Celer, Matic and IEO we present the following coins and buy signals.
The number represents the number of active "Buy" signals right now for that coin.
My guess is that Holo (HOT) could also very well be the next Chainlink (LINK) and hit a 200% gain for those getting in now.
Today I have two interesting stories I’d like to share with you.
The first one is a chart of GDX Gold Miners from 2014 to 2016.
There are some clear similarities to the recent price action in Bitcoin.
You can see at the end of 2014 - early 2015 GDX consolidated between $20 and $25. After a few weeks of consolidation we got a dump to the $12.5 level..
Then a violent rally took us above the consolidation area in the $30 level.. From there we got a dump followed by some sideways action.
This is what I’m expecting for Bitcoin to do next. We are in the final days of the pump and a dump could be starting any time soon..
During this dump and sideways lateral action during which we digest gains, I expect alt-coins to surge…
I’d like to share with you the second story now.
It’s called Ethereum and you can buy it today for 0.028 BTC - the lowest price you’ve ever seen since the March 2017 pump.
We are trading at 2 year lows in ETH/BTC. It doesn’t get much more of a “value play” than this.
Altcoin sentiment is so depressed right now most people feel they will go to 0… Especially when priced in BTC…
But if you think Ethereum will not go to 0… It’s definitely worth your attention.
If we recover and close above the 0.03BTC level it can quickly become an attractive long.
Remember that painful feeling in your stomach in November when Bitcoin crashed below $6,000? The despair and fear you felt watching it sink to $3,200?
The good news is that it has now been magically reversed. “Magic Internet Money” is trading at a relaxed $6,300 — can you hear the bulls flexing?
One of my early-career trading mentors used to say that when the ducks are quacking, you gotta feed them.
So far Bitcoin has been tracking its seasonal tendencies well. They are due for a slowdown soon enough.
As you can see Bitcoin anticipated seasonality a bit this year in the February lows. Right now seasonality is positive (above 0) which should keep a floor under prices but it’s not pricing in big rises… Things get a bit more bleak after June.
Our Bitcoin trading models are still long this move
That being said, I’m hoping this is all prepping us for alt-season.
Back in April we identified Breadth was weakening for Altcoins and advised to stay away — to say that most of them have since struggled would be an understatement.
Alts have gotten CRUSHED by 30-40% on average with many “reputable” names sitting at new lows in BTC for the year.. I’m hoping this is setting us up for a nice massive alt season.
This is a chart of the Altcoin market cap priced in Bitcoins, with Bitcoin in grey overlaid on top.
What we’re noticing is that during periods of rapid Bitcoin price increases - alts lose their BTC value. Makes sense, right?
You can see the massive Altcoin season after BTC’s peak in December 2017. That was wild! As Bitcoin corrected alts pumped hard.
In May 2018 Bitcoin and Alts pumped at the same time.
Surprisingly or not, during Bitcoin’s final capitulation in November the Altcoin market priced in Bitcoins remained steady… Even grew a bit as Bitcoin rallied slowly… and started getting crushed after the April Rally.
Obviously we are now at an inflection point.
Even if this is not the “local top” for BTC during this cycle we are getting close to it… Maybe we can push to $6,700 before, maybe not..
But eventually BTC will start to consolidate and digest its gains, I’m preparing for explosive gains in the beaten down Altcoin sector.
Loading more posts…