Alts Market Cap 08/2020

Alts can keep trying and failing but one day they will push higher.

Alts Market Cap (Total Market Cap excluding BTC)

Meanwhile keep this in mind and don’t take anything for granted, they may or may not breakout soon. If past price action somehow repeats it can push higher and many alts may not retest some of their previous lows but who knows.

Alts Market Cap (2014-2016)
Alts Market Cap (2018-2020)

Bitcoin Update 08/2020

BTC seems to be in the final stage of this consolidation and more alts seem to be pushing higher. We still can’t be sure how and when the breakout of this consolidation will happen.

1) BTC can move higher soon enough; 2) lag there for a while or 3) even dump a bit before breaking this 2 years resistance, but one thing is now clear, we will breakout from this resistance and move higher sooner than later.

Bitcoin Weekly Chart – 200SMA (blue); 50SMA (yellow)

We also know that after pushing higher the strategy needs to be adjusted. Everything will move faster, harder and with less weeks in red, meaning less opportunities to buy lower.

Meanwhile keep an eye on Alts Market Dominance to see where the next support/resistance is. We have so many possible scenarios but more Bitcoin lags, higher is the chance that alts keep pumping well. Many investors keep ignoring alts however some of this alts broke their descending channels/patterns and started new trends.

Alts Market Dominance

BTC 200 Days SMA

BTC is trading above the 200 Days SMA (Simple Moving Average). We have now a full daily candle above that Moving Average but it doesn’t mean BTC is safe or will continue pushing higher. We can expect this second break (previous failed) to last but we need more confirmations.

At this point it doesn’t make sense to remain Bearish. BTC broke the descending channel formed since July 2019, it retested that resistance and bounced from it. BTC still have plenty of resistances to break and it may continue going down nevertheless price action is historically Bullish above that Moving Average (we don’t have so many breaks and failures in BTC price history).

BTC Bullish Confirmations?

BTC broke some resistances but now we need confirmations. Using the 3 Day chart we can foresee two major scenarios.

  • BTC doesn’t pullback much (preferably 8.5k but ~7.9k should be fine) and keeps rising breaking more resistances (including ~13k).
  • BTC achieved a new lower high (below 10k) and starts pushing lower (eventually finding support near 5k).
3Day BTC
Daily BTC

What’s next?

6 Weeks ago BTC traded above the Weekly 50SMA (yellow dotted line) but at that time the 21 Week SMA (blue dotted line) was higher than it is now and sellers won that fight. Nevertheless, If BTC starts trading above the Weekly 21SMA, we may start the next leg up. If not, we remain Bearish for short and mid-term.

Weekly BTC

BTC Recap

As we know, BTC produced a very strong impulsive move from 3k to 14k but it doesn’t mean it will not go below 6k again. In fact we don’t have much support below 6.3k and revisiting 6.9k can be the catalyst needed for another crash to 5k. Nothing is granted but we already saw a strong dump when BTC broke down the 3Day 200SMA and something similar can happen again.

3Day BTC

The only way to avoid that would be holding above 7.4/7.5k and finally pumping well above 8.1k. 9.5k/10.3k is the next resistance, if we retest that level and confirm support near 8k we may be over with this wave 2 but almost everything is suggesting the opposite. We should expect more lows, eventually another crash (capitulation) liquidating over-leveraged traders/investors. Don’t be one of them.

3Day BTC – Clean Version

BTC pump and Alts dump

While BTC is pushing higher, breaking the previous resistance (near 7.5k) alts keep dumping. ETHBTC is only 5% above the last low (achieved in September 2019) and we don’t know what will happen next. Many expect BTC to pump but honestly we need more than this to be optimistic. BTC clearly needs to show strength holding above 7.5k and breaking 8.5k. If it doesn’t happen 5k remains our next target.

3Day BTC
Weekly BTC
Monthly BTC
Alts Market Dominance

BTC Struggle

And everything else is also struggling or even achieving new lows. BTC is failing to stay above the 50Week SMA and the most likely scenario under this conditions is visiting the 200Week SMA (at the moment near 5k).

For any Bullish scenario BTC should stay above 6.9k and it also needs to close the month above 7.5k.

Weekly BTC

What about Alts?

If we consider Alts Market Dominance we still need to push more than this to be excited. Sooner or later Alts will start a consistent Bull Run like BTC is doing but meanwhile we need more Bullish price action than what we saw. What I want to highlight is the fact that Alts Mkt. Dominance tested the Weekly 21 SMA and dipped to the 9SMA. If Alts remain above the 9 Week SMA and even push above the 21 Week SMA everything may start moving much faster but until it happens they can keep lagging.

Weekly Alts Market Dominance

BTC Major Wave 2 Completed?

BTC achieved an even stronger bounce than what would be expected. When we have such moves it’s better to wait some days or even weeks before taking anything for sure. A small example why can be seen on the next chart. Since the market structure is different I’m obviously not expecting the same reaction nor new lows but testing some previous resistances as support (before more pumps) is still a possibility.

BTC “Pumps and Dumps” in Bear Markets

Nevertheless instead of focusing on the short term let’s see what this mean for mid and long term using Multiple Time Frames. First of all this pump puts BTC above the 200 Day SMA, quite relevant Support in Bull Markets. As we already know we dipped below for one month and it could mean something worse than it seems to be (nothing granted yet because we need to remain above this MA but don’t forget the Halving in May 2020).

Daily BTC and the 200SMA

Using the 3Day chart we see how this pump wasn’t random, the strength of the reaction is always unknown but when the Market starts a new Cycle (Bullish one) BTC tends to retest the 3D 200SMA and it may happen again in the next weeks or months (we can’t be sure yet – or ever, nothing is granted). What BTC needs for confirmations is to stay above this two moving averages (in this time frame).

3Day BTC with 100SMA and 200SMA

Using weekly and monthly charts we also have confirmations for a Bull Market continuation but we also see that it may happen faster or slower depending of the next days/weeks. BTC doesn’t have to pump to 20k in few days (like some already speculate) and it doesn’t have to go lower… patience is key.

Weekly BTC with 50/100/200SMA
Monthly BTC with 9/21/50SMA

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