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
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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.
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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.
Thanks for this detailed chart analysis! It has been featured in Editors' Picks!
VictorCobra
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@TradingView, Of course! Thank you for the feature, and for providing this platform :)
-Victor Cobra
EssStSt
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Thank you for your ongoing contribution and insights, we appretiate it!
VictorCobra
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@EssStSt, Of course! I love this stuff. Thank you for your support :)
-Victor Cobra
C_EWAVE13
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Great for sharing this kind of object with us.
This is my personal opinion on the chart, we may see a lower TOTAL 2 zone and then we may see a new cycle even!!!
These days market's situation is very very complicated and it is hard to make a great decision!
C_EWAVE13
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@C_EWAVE13, I see chart based on E-wave, price action and ichi-moku strategies, and we are in a very important Fibo level combined with price action
DaytimeTinkerer
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@C_EWAVE13, Exactly, "market's situation is very very complicated and it is hard to make a great decision" . This is why everyone just uses their crystal balls. It's just amazing how many people accept another's vision of the future. Is it b/c they use a bunch of fancy charts ?
VictorCobra
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@DaytimeTinkerer, It's always hard to make a good decision. You need to make a good decision to begin your portfolio and have some initial growth. But from there, it's just about risk management. The charts and trendlines tell us about how much profit/risk exists in the market, and how far things can fall. So it helps a bit with risk management, but charts are not meant to be "predictive."
-Victor Cobra
C_EWAVE13
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@DaytimeTinkerer, no idea mate. Just have to manage your risks carefully from my point of view.
bm8ter
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This is the information I find important. Thanks for sharing !