This is just a simple observation. Don't really have time to go too in-depth with this one, but this is a substantial deviation from the prior cycle. This time, it appears Ethereum and other altcoins are leading the market. This makes sense, since Ethereum has numerous applications and investment vehicles within its own ecosystem. Bubbles within bubbles. Even so, I think the cryptocurrency market is unlikely to withstand a prolonged Bitcoin downturn, unless everything moves to stablecoins. Even then, there probably wouldn't be enough liquidity for such an event. Stablecoins are likely to be further regulated as it is.
Anyway, for the month of April, TOTAL2 closed at $1.073 Trillion. It closed at $1.198 Trillion in August. This tells us that the majority of the space is still in a bull market (at least in terms of market capitalization). TOTAL2 also never closed below the 9 month EMA (orange), while Bitcoin closed below it in June.
We also cannot ignore the rise and application of stablecoins. TOTAL3 (the market cap minus both Bitcoin and Ethereum) also made an ATH monthly close.
I do think sentiment particularly in the altcoin market is very frothy. Despite this, the market can continue up, and the next move can be quite explosive. As they say, "the market can stay irrational longer than you can stay solvent." If we see something like that, with everything going up suddenly in rocket-style fashion, I think it's likely to end in a blowoff top (similar to 2017). TOTAL2 will not be in a bearish trend until the monthly trend reverses. Even in 2018, alts didn't really continue making monthly highs once Bitcoin topped.
Does this tell us that Bitcoin itself hasn't topped yet?
That's it! We'll see. Very interesting times. I'll write a more philosophical post soon, but for now back to my other work. Thank you for your support! This is not financial advice. This is meant for speculation and entertainment only.
-Victor Cobra
Anyway, for the month of April, TOTAL2 closed at $1.073 Trillion. It closed at $1.198 Trillion in August. This tells us that the majority of the space is still in a bull market (at least in terms of market capitalization). TOTAL2 also never closed below the 9 month EMA (orange), while Bitcoin closed below it in June.
We also cannot ignore the rise and application of stablecoins. TOTAL3 (the market cap minus both Bitcoin and Ethereum) also made an ATH monthly close.
I do think sentiment particularly in the altcoin market is very frothy. Despite this, the market can continue up, and the next move can be quite explosive. As they say, "the market can stay irrational longer than you can stay solvent." If we see something like that, with everything going up suddenly in rocket-style fashion, I think it's likely to end in a blowoff top (similar to 2017). TOTAL2 will not be in a bearish trend until the monthly trend reverses. Even in 2018, alts didn't really continue making monthly highs once Bitcoin topped.
Does this tell us that Bitcoin itself hasn't topped yet?
That's it! We'll see. Very interesting times. I'll write a more philosophical post soon, but for now back to my other work. Thank you for your support! This is not financial advice. This is meant for speculation and entertainment only.
-Victor Cobra
Comment:
If the market has already topped, we should see TOTAL2 get rejected hard here and eventually close below the 9 month EMA. Sentiment in the altcoin market supports a drop here, but I'm unsure whether or not the market has reached its peak. There are other dynamics at play in global markets, and these could affect crypto quite significantly.
Comment:
Retesting 1.07 Trillion at the moment. This was the monthly close for April (previous ATH close). Still some room for downside here, before the market begins to look bearish. Closing the monthly above this level would be bullish, in my opinion.
