Crypto Update 3/5/2024
Crypto's Back!!!
Back to the moon!!!
Crypto is back!!!
Shake and Bake!!!
Bitcoin (BTCUSD) just broke out to new All-Time Highs. Sending the crypto bears back into hibernation. After the SEC approval of Bitcoin spot ETFs, many thought it was the beginning of the end for Bitcoin. The -16% drawdown we saw mid-January didn’t shake the faith, as folks rushed to buy up the newly created Bitcoin ETFs. Demand quickly outpaced supply as we rocketed off those levels.
Many who owned this highly volatile asset class from prior cycles know that -15% to -25% drawdowns are normal in a Crypto bull market cycle. We anticipated the All-Time Highs would be tested however maybe not this soon. Then again that’s crypto for you it moves fast creating serious FOMO.
Where do we go from here?
It’s important to remember that new All-Time Highs after a massive base usually lead to more All-Time Highs later. Folks like Tom Brady and Matt Damon were pumping crypto back in 2022. Folks who got caught up in the hype of “laser eyes” and FOMO and bought the “Top” in 2022, finally found themselves down -75% a year later. They are just now breaking even if they held on this entire time. They painfully learned that just because you reach All-Time Highs doesn’t mean new highs will come immediately afterward.
Sadly I don’t have a crystal ball, but I believe the market has the following options:
Options 1:
A retest of $60K level and then blast higher.
Option 2:
Consolidate sideways and chop around in a range until the having in April. This happens every 4 years and typically results in the market trending higher
Option 3:
Rejection. Just sell-off completely back down to the $45K range where we saw the ETF get approved.
Ultimately I think Bitcoin will reach $100K to $120K, when and how is the real question. If we get a healthy pullback in price, then I don’t think it’s a bad idea to add to a long-term position. Shorter time frame positions might want lock in some gains.
Enter Ethereum
Bitcoin isn’t the only one leading the crypto bull rally Ethereum (ETHUSD) also managed to break above a key resistance price level of $2900 level which is also the 50% retracement level. It quickly followed that up by blasting through $3500 level.
Both Ethereum and Bitcoin are clear leaders. Looking at the ETH vs BTC chart we can see that momentum may have shifted back in favor of Ethereum. I was told the other week that “no one is watching this ratio". Of course, this let me know that IS something we should be watching. In the past, this ratio has been a signal to altcoin buyers that it’s time to buy!
Altcoins get your Altcoins
Chainlink (LINKUSD) lead the charge for altcoins back at the start of the year, and broke out of its base. We are starting to see other names such as Solana (SOLUSD), and Avalanche (AVAXUSD) follow.
What’s more interesting to me, is how far this is trickling down. This past week we’ve seen long-forgotten shitcoin names like Dogecoin (DOGEUSD) +80% and Shibu Ina (SHIBUSD) +46% getting bought up in a crypto feeding frenzy.
These two names are usually great indicators of risk sentiment. Right now people are full YOLO and throwing caution out the window. Guess it’s time to update your profile pic to “laser eyes”. Look even the Presidents doing it!
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