A Year In Review: Crypto Goes Bonkers, Asset Bubble Continues
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I'll begin this post by saying that it's been quite a year. And honestly, I should probably focus a bit more on the things that matter to me - art, music, etc. But it's important to not be too hard on oneself. Markets can be a big distraction and a way of detaching oneself from other things in life. Interest in the market also reflects disinterest in other things, and I think our society is very sick. Just look at what's happening around us these days. There is no consensus reality anymore. I could write about this for ages.
In any case, I've been writing about this market since 2018, and I'm in decent profit on the crypto I accumulated since then. It's been fascinating observing the transition from bear to bull market, and I've certainly learned a lot. Thank you to everyone who has been following me on my journey!
I've tried to understand the crypto market cycle, but as I said was possible, this cycle is looking very different. Intriguingly, altcoins are still following my trajectory, while Bitcoin has become something of its own. While potentially revolutionary, I think there are some dangers here in widening the already absurd wealth gap. But hey, in the places where fiat currencies are becoming worthless, Bitcoin has been quite helpful for those who have been able to get ahold of it. At least it has been able to serve this function, despite the wealthy elite starting to get their greedy hands on it. In the end, it's not even greed - it's the fear of losing power, or of become like the "other."
Here is my most recent market cycle projection, and you can see how Bitcoin has diverged quite substantially from what it did during the last cycle:
Over the last year, I haven't perfectly predicted anything (no one can), but I've made some pretty great analytical calls and observations.
Firstly, I called the bottom after the March 12th liquidity event, and suggested Bitcoin would head straight to $10-12k from there, which it did:
I also suggested that crypto would continue to outperform the stock market:
In July, I made a study of how altcoins are certainly not created equal. SInce then, WTC has continued to slide in USD value, while VET has continued to increase. Not all coins get supported by the rising tide:
Also in July, I suggested Bitcoin would continue up, as many were calling the top. Instead, I looked at prior consolidation periods.
I continued to watch the decline of the USD and the appreciation of assets (hence the title of this analysis):
Even as cryptocurrencies began to move up substantially, I called the retrace to the 100 day MA. Ethereum has more than doubled since then:
In October, I called the breakout towards the ATH, though I did not expect a significant new ATH to be reached this year. In this sense I was incorrect, but the range was indeed broken:
I even called the breakout on XRP in November, and then sold for profit after the SEC news:
I called a similar breakout on LTC. This one has shown itself to have more legs:
Anyway, that's it for the review. What's happening now? WHERE'S THE TOP?? No one knows, since the market is breaking structures left and right. Bitcoin is arguably entering a second bubble rather quickly, sort of how I made a wild speculation on a "double bubble" back in June, 2019:
Looking at the BLX chart (the longest price history index for Bitcoin), we can see that it's in a clear parabolic run. It does indeed have room to drop soon and move sideways until mid-2021, where it could hit the purple trendline again. That would put the correction target in the realm of 19-22k. On the other hand, it can shoot straight up to the top, around 67k. This is why accumulating during the bear market was clearly the move. Right now, it seems nearly impossible to time when the next buying opportunity will be, but I will do my best.
As you can see in the above charts, the TOTAL crypto market cap (right) broke above the uptrend channel. A rising wedge or channel breaking to the upside is usually the signal of a parabolic run, as buyers are powerful enough to make an even MORE aggressive uptrend, rather than breaking down from the channel and losing momentum. ETH (right) is sitting just below the channel resistance. If it breaks up, I expect ATH prices for the #2 cryptocurrency within the first month or two of this year. If Bitcoin pulls back soon, ETH can retest the middle of the channel again before breaking out. On the bearish side, I don't want to see the uptrend broken to the downside.
Even alts like NANO are moving here. NANO is actually in a bit of an ascending pattern on the weekly. If it breaks this resistance, it can shoot up ridiculously fast towards levels not seen since 2018. I accumulated some more Nano somewhat recently, due to the ease of selling my Reddit MOONS. I think one of the reasons why NANO is doing well right now is due to the attractiveness of pure currency coins with limited supplies and high decentralization:
VET also looks extremely good, though I'm a little wary of the project, since the token is most likely a security. I may reduce my VET exposure if it breaks out further here towards my upper targets (green):
NEO is underperforming, after outperforming this past summer. This is concerning and a bit surprising, considering how advanced their blockchain is, and considering the major upgrade right around the corner. Let's see if it can surprise the market soon and head up towards $30+:
LTC is in a broadening formation, and it can break up towards $250 if it escapes the already aggressive uptrend:
As I explained in my recent video, this are the two scenarios I'm looking at for XRP, unless some incredibly good news comes out soon. The green X is where I exited my entire long term position in favor of LTC. If I bought back now, I'd have 3x as much XRP, but I'm hesitant.
XLM has room in this channel, and looks much better than its cousin XRP, though not performing with the rest of the market right now due to its association with XRP. However, I do think XLM is in a much better position than its cousin. So, I still hold my XLM position.
As for alts outperforming Bitcoin, they have a chance if Dominance can fall from this historical resistance level. This is a really important psychological ratio for the cryptocurrency market. 70:30 is a ratio where people start to become worried about Bitcoin completely annihilating growth in the rest of the market. It's just large enough for people to doubt altcoins. So it makes sense that alts tend to start outperforming once this ratio is reached. There is a chance for dominance to get to the high 70's, but I can just as easily see it retrace to the low 60's here again, breathing some life back into the rest of the industry:
Anyway, it'll be really interesting to see how this bull market evolves. And of course, there's always the possibility of a short-lived bubble, especially if global markets go into a frenzy and things become even more unstable. The future is uncertain. Just best to let go, sit back, and enjoy the ride of our ridiculous shared reality. Don't over-invest. I honestly feel like I've over-invested my time (not money) into this market. Ironically, I'm less inclined to post during bullish price action, but I'll try to provide as much content as I can. I can't miss out on this entirely :)
Thank you for reading! This is not financial advice. This is meant for education, entertainment, and speculation only.
-Victor Cobra
In any case, I've been writing about this market since 2018, and I'm in decent profit on the crypto I accumulated since then. It's been fascinating observing the transition from bear to bull market, and I've certainly learned a lot. Thank you to everyone who has been following me on my journey!
I've tried to understand the crypto market cycle, but as I said was possible, this cycle is looking very different. Intriguingly, altcoins are still following my trajectory, while Bitcoin has become something of its own. While potentially revolutionary, I think there are some dangers here in widening the already absurd wealth gap. But hey, in the places where fiat currencies are becoming worthless, Bitcoin has been quite helpful for those who have been able to get ahold of it. At least it has been able to serve this function, despite the wealthy elite starting to get their greedy hands on it. In the end, it's not even greed - it's the fear of losing power, or of become like the "other."
Here is my most recent market cycle projection, and you can see how Bitcoin has diverged quite substantially from what it did during the last cycle:
Over the last year, I haven't perfectly predicted anything (no one can), but I've made some pretty great analytical calls and observations.
Firstly, I called the bottom after the March 12th liquidity event, and suggested Bitcoin would head straight to $10-12k from there, which it did:
I also suggested that crypto would continue to outperform the stock market:
In July, I made a study of how altcoins are certainly not created equal. SInce then, WTC has continued to slide in USD value, while VET has continued to increase. Not all coins get supported by the rising tide:
Also in July, I suggested Bitcoin would continue up, as many were calling the top. Instead, I looked at prior consolidation periods.
I continued to watch the decline of the USD and the appreciation of assets (hence the title of this analysis):
Even as cryptocurrencies began to move up substantially, I called the retrace to the 100 day MA. Ethereum has more than doubled since then:
In October, I called the breakout towards the ATH, though I did not expect a significant new ATH to be reached this year. In this sense I was incorrect, but the range was indeed broken:
I even called the breakout on XRP in November, and then sold for profit after the SEC news:
I called a similar breakout on LTC. This one has shown itself to have more legs:
Anyway, that's it for the review. What's happening now? WHERE'S THE TOP?? No one knows, since the market is breaking structures left and right. Bitcoin is arguably entering a second bubble rather quickly, sort of how I made a wild speculation on a "double bubble" back in June, 2019:
Looking at the BLX chart (the longest price history index for Bitcoin), we can see that it's in a clear parabolic run. It does indeed have room to drop soon and move sideways until mid-2021, where it could hit the purple trendline again. That would put the correction target in the realm of 19-22k. On the other hand, it can shoot straight up to the top, around 67k. This is why accumulating during the bear market was clearly the move. Right now, it seems nearly impossible to time when the next buying opportunity will be, but I will do my best.
As you can see in the above charts, the TOTAL crypto market cap (right) broke above the uptrend channel. A rising wedge or channel breaking to the upside is usually the signal of a parabolic run, as buyers are powerful enough to make an even MORE aggressive uptrend, rather than breaking down from the channel and losing momentum. ETH (right) is sitting just below the channel resistance. If it breaks up, I expect ATH prices for the #2 cryptocurrency within the first month or two of this year. If Bitcoin pulls back soon, ETH can retest the middle of the channel again before breaking out. On the bearish side, I don't want to see the uptrend broken to the downside.
Even alts like NANO are moving here. NANO is actually in a bit of an ascending pattern on the weekly. If it breaks this resistance, it can shoot up ridiculously fast towards levels not seen since 2018. I accumulated some more Nano somewhat recently, due to the ease of selling my Reddit MOONS. I think one of the reasons why NANO is doing well right now is due to the attractiveness of pure currency coins with limited supplies and high decentralization:
VET also looks extremely good, though I'm a little wary of the project, since the token is most likely a security. I may reduce my VET exposure if it breaks out further here towards my upper targets (green):
NEO is underperforming, after outperforming this past summer. This is concerning and a bit surprising, considering how advanced their blockchain is, and considering the major upgrade right around the corner. Let's see if it can surprise the market soon and head up towards $30+:
LTC is in a broadening formation, and it can break up towards $250 if it escapes the already aggressive uptrend:
As I explained in my recent video, this are the two scenarios I'm looking at for XRP, unless some incredibly good news comes out soon. The green X is where I exited my entire long term position in favor of LTC. If I bought back now, I'd have 3x as much XRP, but I'm hesitant.
XLM has room in this channel, and looks much better than its cousin XRP, though not performing with the rest of the market right now due to its association with XRP. However, I do think XLM is in a much better position than its cousin. So, I still hold my XLM position.
As for alts outperforming Bitcoin, they have a chance if Dominance can fall from this historical resistance level. This is a really important psychological ratio for the cryptocurrency market. 70:30 is a ratio where people start to become worried about Bitcoin completely annihilating growth in the rest of the market. It's just large enough for people to doubt altcoins. So it makes sense that alts tend to start outperforming once this ratio is reached. There is a chance for dominance to get to the high 70's, but I can just as easily see it retrace to the low 60's here again, breathing some life back into the rest of the industry:
Anyway, it'll be really interesting to see how this bull market evolves. And of course, there's always the possibility of a short-lived bubble, especially if global markets go into a frenzy and things become even more unstable. The future is uncertain. Just best to let go, sit back, and enjoy the ride of our ridiculous shared reality. Don't over-invest. I honestly feel like I've over-invested my time (not money) into this market. Ironically, I'm less inclined to post during bullish price action, but I'll try to provide as much content as I can. I can't miss out on this entirely :)
Thank you for reading! This is not financial advice. This is meant for education, entertainment, and speculation only.
-Victor Cobra
Nota
Damn, ETH has followed my trajectory pretty perfectly. I wonder if the $2400 level will be hit soon.
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