BTC and Alt Market Update
Dear Readers,
BTC/ USD
With price currently making all time highs, the excitement for such is curiously absent as compared to previous market cycles when all time highs were being made. And then this is explicable when we consider the nature in which highs are being made this time round.
As opposed to a regular price dynamic to be found in the multi-year cycle, we have one of irregularity [chart above]. First the parabolic and continued spikes up on 2017 and 2021, and now a stalled out extended range at the previous top, where price did not go parabolic [also irregular are the the previous tops themselves - a parabolic blow-off top and a double top]. This irregularity has led to many calling for a top and and a more serious correction as per 2019.
The only regularity would seem to be the way in which over-all macro price action is contained within the LGC [logarithmic growth curve]. And when we keep that curve as our primary datum, we can be confident of a future move up in the near term as price is still in the lower half of the channel.
Moving on to a focus on the more immediate price action in the chart above. We see first a strong technical move up in early 2024, that, while bordering on a further parabolic move, stalled out to form the left side of the cup that formed over the course of the year.
This created both some serious consolidation to that move while keeping price relatively high within a range. This in turn led to the market getting used to this price range that had been reached previously a full 3 years earlier. In a word, and sentiment-wise, it was something of an anti-climax…. just as the double top was a few years back. The market likes to keep us guessing.
Yet, technically, it is quite something else. What we have now is a serious base and platform built at a high price, and while still in the lower half of the LGC channel.
Even if the shortest-term trendline drawn above does not hold, there is plenty of room for the greater pattern of the cup for the building price action moving forward over this 4th quarter.
The fib target provides a shorter-term target, which also does not exclude price from going higher on the wider multi-year timeframe. Indeed, if price were to break that 100K barrier this may well have the psychological impact on market sentiment to send price parabolic proper…. to prices approaching twice that interim target.
Of course, the multi-million dollar question to be asked of the multi-year cycle is whether that spike, if and when it comes, will be front-run. Over and above the question, the most probable outcome in my opinion is that the LGC channel will continue to hold [as it has done since first projected in 2018].
And of course, if the LGC channel continues to hold, yet another serious correction after a spike is to be expected. It is because there is a good chance that price may well come back to present prices after a spike that we look to take profits on the extra volatility of alt/ USD. This gives us a kind of ‘have your cake and eat it too’ policy - one can continue to sit on their core BTC position while taking profits on the expected volatility of alts.
ALT/ USD
In regard to the alts, I think the TOTAL 2 chart is useful in providing a picture and analysis of price action of the over-all market cap.
In zooming out we get the best perspective from a macro view - a multi-year base was formed, price broke out to a higher level that has held for near a year, the weekly MACD has re-set to the zero-line.
Zooming in, the chart shows plenty of technical interest. The time fib marks a correction equal to the initial breakout. The second price fib gives price tightening in an ascending triangle. Price also has a greater descending channel to contend with.
At this particular juncture, the big question is whether the downward channel or the ascending triangle will win out. Place your bets ladies and gentlemen… with money you can afford to bet with. Though TA can mitigate risk, it can never eliminate it. And this is an obvious truth, when you consider that if it could, you’d soon own half the world.
With that disclaimer said, I certainly have been gaining some exposure to longer-term alt positions over the past few years while also trading the volatility of alts to re-build cash. A multifarious approach is always the best, and also the best way in which to manage risk… to both sides.
Until next time,
Stay [relatively] safe out there,
Dave the Wave.