It has certainly been a wild ride for Crypto so far in 2018.
Total market cap fell from its peak on Jan 07th of $823B to $248B. That's a cool 70% wiped off the markets. Gone. The most significant reason for this drop was simply that the market had grown high, too fast. What goes up must come down.
coinmarketcap.com/charts/
As I noted in my analysis on Jan 18th a clear indicator of this is how far the price had deviated from the standard Moving Average. On each of the 4 occasions when price had grown over 60% above the MA we get a correction. The correction in 2018 was larger probably because we had more new investors who are not conditioned to such massive price swings.
But as sure as the sun rises in the East, the market eventually started it's recovery....
Since the February low we have seen a classic Adam & Eve Double Bottom formation (thepatternsite.com/aedb.html) and a 65% recovery back to $10,000.
In accordance with the rules I noted in the Jan 18th analysis above the market has broken out of the bear market and turned bull. Key indicators are:
- Price has broken back above the 200 MA (dark purple line). Price has tested this a few times and used it as support
- Slower 50 MA has moved from below to above the 200 MA (Golden Cross - www.bigtrends.com/ed...-technical-analysis/) indicating that their is less resistance for price to increase
- Since the recent surge in April the Relative Strength Index (RSI) has held above 50 (bullish zone) & price is seeing higher highs and higher lows
- Price has broken through the cloud and will find resistance to fall back though it. The flat cloud top at 11500 level will act as a magnet and attract price upwards (remember that this is a lagging indicator)
- Their is significant buy support at the 8800 level, again suggesting price with find resistance at lower levels.
I am not in the business of trying to predict future prices since the future is unknowable in specifics. Future price is however foreseeable in character and the probability is that Bitcoin price will continue to increase in the short and medium term.
What About Altcoins?
Simply put #AltsAreBack. Rather that regurgitate the analysis here check out the excellent tweetstorm here: twitter.com/bmb...674262772797441?s=12
"Howard Marks describes two ways to profit from markets: (1) buy more of what goes up and less of what goes down, and (2) cycle adjustment: building risk exposure when markets rise and reducing when they fall. Most people ignore the 2nd."
The punchline is that since the market correction in April Altcoins have been out performing Bitcoin. Bitcoins market dominance has fallen from 45% - 36%. His analysis suggests that bitcoin may loose further market share but I speculate it will recover sooner than later due to the FA below....
Fundamental Analysis
- positive news & FUD about Bitcoin, Crypto and Blockchain is being spread in equal measure. Large media outlets continue to mostly report negative stories. e.g. Warren Buffet (e.g. cryptocannibal.com/2...berkshire-vc-munger/)
- However institutional investment is coming, e.g.
-- uk.finance.yahoo.com...tcoin-135933407.html
-- www.crypto-news.net/...e-a-crypto-exchange/
-- bitcoinexchangeguide...tutional-hedge-fund-
-- Regulation is coming. It might impact negatively in shortterm but is good longterm
Summary
As institutional money pours in it will first come into Bitcoin and later into larger alt coins.
The TA is looking bullish to place longs with tight stop losses to protect downside
This is not investment Advice folks!
Total market cap fell from its peak on Jan 07th of $823B to $248B. That's a cool 70% wiped off the markets. Gone. The most significant reason for this drop was simply that the market had grown high, too fast. What goes up must come down.
coinmarketcap.com/charts/
As I noted in my analysis on Jan 18th a clear indicator of this is how far the price had deviated from the standard Moving Average. On each of the 4 occasions when price had grown over 60% above the MA we get a correction. The correction in 2018 was larger probably because we had more new investors who are not conditioned to such massive price swings.
But as sure as the sun rises in the East, the market eventually started it's recovery....
Since the February low we have seen a classic Adam & Eve Double Bottom formation (thepatternsite.com/aedb.html) and a 65% recovery back to $10,000.
- Price has broken back above the 200 MA (dark purple line). Price has tested this a few times and used it as support
- Slower 50 MA has moved from below to above the 200 MA (Golden Cross - www.bigtrends.com/ed...-technical-analysis/) indicating that their is less resistance for price to increase
- Since the recent surge in April the Relative Strength Index (RSI) has held above 50 (bullish zone) & price is seeing higher highs and higher lows
- Price has broken through the cloud and will find resistance to fall back though it. The flat cloud top at 11500 level will act as a magnet and attract price upwards (remember that this is a lagging indicator)
- Their is significant buy support at the 8800 level, again suggesting price with find resistance at lower levels.
I am not in the business of trying to predict future prices since the future is unknowable in specifics. Future price is however foreseeable in character and the probability is that Bitcoin price will continue to increase in the short and medium term.
What About Altcoins?
Simply put #AltsAreBack. Rather that regurgitate the analysis here check out the excellent tweetstorm here: twitter.com/bmb...674262772797441?s=12
"Howard Marks describes two ways to profit from markets: (1) buy more of what goes up and less of what goes down, and (2) cycle adjustment: building risk exposure when markets rise and reducing when they fall. Most people ignore the 2nd."
The punchline is that since the market correction in April Altcoins have been out performing Bitcoin. Bitcoins market dominance has fallen from 45% - 36%. His analysis suggests that bitcoin may loose further market share but I speculate it will recover sooner than later due to the FA below....
Fundamental Analysis
- positive news & FUD about Bitcoin, Crypto and Blockchain is being spread in equal measure. Large media outlets continue to mostly report negative stories. e.g. Warren Buffet (e.g. cryptocannibal.com/2...berkshire-vc-munger/)
- However institutional investment is coming, e.g.
-- uk.finance.yahoo.com...tcoin-135933407.html
-- www.crypto-news.net/...e-a-crypto-exchange/
-- bitcoinexchangeguide...tutional-hedge-fund-
-- Regulation is coming. It might impact negatively in shortterm but is good longterm
Summary
As institutional money pours in it will first come into Bitcoin and later into larger alt coins.
The TA is looking bullish to place longs with tight stop losses to protect downside
This is not investment Advice folks!