Monday Market Outlook #5
This past week or so has been an eventful one.
With Altseason in full force, we can see just how volatile this market can be in the altcoin space — from $ETC pumping 400% in 2 days, $SHIB now worth $11 billion dollars, and $DOGE enjoying its time in the NBC limelight.
Last week we talked about the initial Ethereum pump above $3,000 and where it would likely head: either rip higher in violent fashion, or back test the $3,000 level for support. Obviously, it ripped higher.
Ethereum continues to pump violently upwards as it crossed the $4,000 dollar mark last night. Remember, this is the time for altcoins to pump, and if you remember from last week, when I talked about how money flows during Altseason, you know that it works in phases. I made another flow-chart to further breakdown the money flow:
Currently, we are in the 3a phase. Ethereum and large cap altcoins are pumping in tandem as money flows back and forth between the two. Let's look at some charts and see what our price targets for Ethereum are before before we head into phase 4 of the money flow.
This is the ETH/BTC chart on the weekly timeframe. A charted parabola shows that Ethereum price action is ahead of schedule, which has been the running theme for this bull run (it seems all high-time-frame (HTF) projections across Bitcoin, Ethereum, and other large cap altcoins are usually right, but are just too far out and happen much earlier than projected).
With that being said our price target is the .087100 sat level or $5,020 dollars. I think once we hit that level of resistance we could see a consolidation from Ethereum, which would cause phase 3 to proceed into phase 4 without looping back.
This means we are about midway into the altseason, and here is my projection for how much more rotation from Bitcoin into altcoins there is ahead of us.
This is the altcoin dominance chart that shows the percentage of market cap for cryptocurrency that is allocated towards altcoins (everything except Bitcoin).
We are skyrocketing towards previous highs made in 2018/2017, around the 60% level. That would be our next resistance (as there really isn't any on the way), showing we have about another 12% to go. That would be to the tune of $300 billion dollars either being rotated or newly entering into altcoins.
This shows we have a good ways to go for the remainder of Altseason.
But, what about Bitcoin? After all, the reality is that the market is still held up by the performance of Bitcoin until proven otherwise.
As you can see from every single bull cycle in the past, the NUPL chart (Net Unrealized Profit/Loss) peaked ABOVE the 75% mark. We have been ranging in between the 50-75% range for over 7 months and judging from price action we are not going to be coming close to an all-time-high (ATH) any time soon.
This means we will continue to coil up in this range for a while longer. The previous bullrun lasted 9 months from the 50% level to the peak of the market. This shows that we could be in the beginning stages of a much larger bull run than we think. Here is my project for the upcoming months on Bitcoin.
This is the BTC/USD chart on the daily timeframe. I am an ardent believer in the belief that the herd is usually wrong. It is a pretty common pattern that the herd – in this case, the majority of investors – get bullish around resistance levels. Resistance levels are called resistance for a reason, because most times price increase is resisted at that point.
If we look at the MacD, there is an obvious bearish divergence as the MacD heads downwards and price upwards. This is an indication that price will eventually breakdown. Personally, I think we continue back down to the $52,000 dollar level and build an even stronger support. This means we would be continuing within this range for almost 7 months.
If we continue to range at 3x the price of the previous ATH set in 2017 for 7+ months consecutively, you can bet your bottom dollar this bull run will be extended much longer than we anticipated. With that kind of price action we are talking about a price target much higher than 99% of people are thinking.
The altseason is playing out according to plan. In our opinion we are nowhere near the top of the market. The institutional wave is coming believe us when we say they cant afford to see Bitcoin fall back down to the 20-30k's.
Speaking on institutional demand, make sure to read tomorrow's Drip. We'll talk all about it, and what it means for this bull run.