IN TODAY’S REPORT
What we cover: TECHNICAL ANALYSIS Edition. Alt Index at key level. The Bottom 90% speaks. Bitcoin’s massive formations.
Three Charts to Watch Right Now
ALTCOIN INDEX. Total Crypto Market Cap minus $BTC, $ETH, $USDT, $USDC.
As always, one of the best ways to look at altcoins as a whole is to sum all the money invested in crypto and then subtract the collective market cap of Bitcoin and Ether along with stablecoins Tether and USD Coin. What’s left? Everything else.
As I wrote about several times this year, altcoins formed a large bull flag pattern (see green shading) which — as the pattern itself suggested — finally broke out this fall, later accelerating post-election.
Altcoins have now stalled at their prior cycle high (late 2021) where we’re likely to see consolidation (red shading). How long will this last? In normal enviroments, I’d speculate a few weeks to a few months. That said, we’ve just seen a massive regime change for crypto. Whatever you make of the new administration-elect on the whole, for the crypto market it’s a full force, tires screeching U-turn from the administration of the past four years. Gensler gone. “Operation” (more like quiet policy) Chokepoint gone. Formerly DOA Lummis Bill now potential law and soon. All to say, the pause may be shorter than normal.
TAKEAWAY: While I’ll be keeping an eye on my many exit indications if the crypto bull continues as expected, I can’t recall a time in my career when the stars have so aligned around the fortunes of a single asset class. The crazy, clickbait predictions you hear every cycle? A few may actually end up coming true in this cycle. This chart should move higher in 2025.
BOTTOM 90% Market Cap Dominance. Weekly Chart.
Take away the top 10 coins and tokens by market cap, and you’re left with the thousands of alts which comprise the bottom 90%. If you want to know how much of the total market cap the bottom 90% controls, look below. As I write this, the number is a modest if not paltry 11.37%.
TAKEAWAY: At its peak in late 2017 / early 2018, the Bottom 90% Dominance hit around current levels which was a massive advance back then. Last cycle in late 2021, it hit around 20%. With more coins and tokens than ever, we're likely to see this hit 20% or higher. Alts may be poised for a pause, but the party is not likely over. Not by any stretch.
BITCOIN (BTCUSD). Weekly Chart w/ Halving & Halving Midpoint Dates.
Before it exploded to the upside, the REKTelligence Report noted that the dominant pattern in Bitcoin was undeniably the massive Cup & Handle formation which was “poised to eventually break higher, potentially significantly.” That’s now history as Bitcoin tops $100,000 level.
TAKEAWAY: Just like last cycle, a massive weekly chart formation preceded an explosive move higher for Bitcoin. Based on prior halvings and Bitcoin's subsequent behavior, the king crypto has significant room to run. And that's without even considering the potential impact of a BTC strategic reserve.
Looking ahead, 2025 will be a crucial year for crypto in myriad ways, all of which I’ll cover in upcoming reports. Buckle up, friends. I believe it will be the most eventful year in crypto’s history.
Until next time…
peace_love_crypto
-DB
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