Investing isn’t a sprint but in the cryptocurrency world we have some sprints and also consolidation periods. Overall we move slower than everyone buying this local tops think we will. We saw far too much hype in the past four weeks with analysts suggesting 30k targets for this year when price was in fact much higher than fundamentals and some slower indicators like the 200 Moving Averages.
using more conservatives entries anything below 9k can be a good entry for the
next 3 months and more. We really need to see how price action evolves after breaking
down this red line but before it happens the idea is quite simple: above 10k
Supply is in control (until it isn’t), below 9k Demand should be in control.
Historically any break below the 100SMA is sharp and quick but since this Bull Market is still at the beginning we may have a longer consolidation period and we may even test the 200SMA.
About alts, it’s still unclear when the altseason may start so better to wait until we have a clear and strong signal, for instance alts pumping more than 15% in a single day.
Adjusting some settings on the Major Mayer Multiple, for example the Slower MA ( SMA #B) to 400 (instead of 300) and the MMM EMA to 50 (instead of 14) we obtain some interesting results, other setting are also interesting but for mid/long term cycles this two changes can be revealing.
We keep monitoring the crypto market but we still need more confirmations for some kind of Bullish Reversal. Anyway we can expect volatility from here since many people are waiting for the same, this can be good or bad but we can’t guess if this time we actually start breaking more resistances or if we keep failing as we did many times in the last months (year).
In the short term things look better with many supports playing out but they can start failing. Keep checking the charts we previously shared on tradingview and also this new one.
Total Market Cap is looking better but we need to stay very cautious trading this bottom. At the moment we have an impressive volume pushing us in the right direction, we started breaking some resistances, some alts already broke their downtrend and it seems that the buying pressure may increase as alts will start retracing (providing better entry points than now) nevertheless nothing is granted.
I’m looking for a confirmation of an Adam and Eve bottom (even if the Eve low is 10% above the Adam low, not really perfect) expecting that should push us out of the broadening wedge (green lines). It may happen soon or not but a pullback from here is quite expected. Using the Total Market Cap we may pullback 10/15% but better not to fall more than that or we may move below our supports (yellow and blue lines) invalidating a move higher in the short term.
Using the VPVR (Volume Profile) we have almost no price action between 150B and 170B, meaning this range can easily be skipped by buyers and sellers, nevertheless we have the 200 Daily MA playing as resistance. Usually we expect some support/resistance from the 50MA and 200MA but breaking them easily also happens often as we can see recently with EOSUSD but sooner or later a retracement happens.
For any MA to be a strong Resistance or Support it needs multiple testes and failures. For instance on EOSUSD the 50MA and 200MA are very far from each other and the 50MA is still below the 200MA, so the 50MA will be our next support and the 200MA will remain the resistance (even if it broke, it will likely not last longer).
Some new traders/investors will probably focus on USD prices and even experienced traders will sometimes “ignore” other pairs nevertheless we always need to keep an eye on every cross pair available since they all have relevance at some point. Also considering this we may even play with some strange pairs just to find out if any correlation exists.
We could work with many examples but for clarity let’s focus on LTC. In the next chart we can see LTCBTC in yellow and LTCUSD in blue. When BTC is in a Bearish Market for a longer period (2014 and 2018) all alt coins usually follow that price action. Funds move from alts to BTC and fiat currencies (or other stable coins) pushing alts lower and lower but when the trend/market gets Bullish, BTC pairs can enter in correction phases while USD pairs remain quite stable for a longer period. Even in Bull markets the USD and BTC price can fall from time to time but not as much as in a Bear Market. For instance, from July 2015 to February 2017 LTCBTC lost value but LTCUSD consolidated because BTCUSD was slowly increasing in value.
In Bull Markets we have periods when BTC pairs get dormant or lose value because funds start moving/rotating between alts. To understand this rotations we need to look for potential tops and bottoms on cross pairs. Looking at the LTCBTC we can clearly see where LTC lost or gained traction but we also see some interesting things if we use the LTCETH pair (blue line in the chart below).
In fact, we notice an ascending channel on LTCETH for the last two years and also that every time this pair tested the top of the channel LTCUSD started a new consolidation or correction some weeks after.