Right now, the ratio is testing the previous all-time high from the end of 2017. The same can be said for both the TOTAL crypto market cap, and the TOTAL2 market cap (minus Bitcoin ). The altcoin market is a little more in danger here.
This is actually very interesting. Obviously, it means that anyone who bought $20k Bitcoin at the last peak isn't doing better than had they stuck that same money into the S&P 500 index .
Things seem to have reached an equilibrium, and an interesting historical moment. I'd like to also note that the Bitcoin correction from July 2017 came much closer to its previous ATH against SPX than it came to testing its own previous ATH .
Failure to hold these levels could really be a bad sign, as it would mean crypto will no longer seem as attractive as an alternative investment, and the bull market for crypto could be over indefinitely. The psychology here is pretty important. People see outsized gains from crypto, and it becomes a bubbly market with rampant greed and lots of leverage. This may have already become its ultimate downfall.
This chart is really to see if this presents a buy signal. While Bitcoin hasn't retested its previous ATH against the U.S. Dollar, it has now retested its previous ATH against SPX . My next target would be for it to double from the previous high on the ratio, likely putting Bitcoin between $100-200k on its next leg up. If SPX stagnates/corrects for a bit, perhaps Bitcoin can touch $120-130k. On the side, some permanent damage may be done to the Bitcoin market if it cannot hold these levels, and if it cannot keep up its momentum against the stock market. The jig would be up, so to speak. The next level on the downside would likely be the mid-2019 ratio, which would probably put Bitcoin back between $13-20k.
The big question is: Can Bitcoin continue to appreciate against the stock market at the same rate?
This is not financial advice. Just something I noticed. It is meant for speculation and observation only.
This is SPX/M2 money supply, which shows that markets are at a critical level.
A lot of upside potential from here, but it probably won't last. The next recession/depression will probably tell us whether or not crypto is really here to stay. There's also a fractal I'm watching in the Dow Jones that looks remarkably similar to price action leading up to the 1929 crash. Probably won't play out exactly like that, but I find it really interesting.
Take care, and thanks again for your comment!