Market News
Bitcoin's price suffered a massive drop, and it was trading below $46,700 at the time of this writing. BTCUSD had lost 20% in the last seven days, while only some low cap altcoins continue to grow in value, according to CoinGecko.
We could be witnessing another correction period that may open the doors to a continuation of the current altcoin rally.
Additionally, other metrics continue to surprise us, showing that bitcoin has not lost its steam just yet.
CoinDesk reports that there is an opportunity to accumulate GBTC (GrayScale Bitcoin ETF) at the cheap since the premium has now turned into a nice discount. They wrote “The Grayscale Bitcoin Trust (GBTC), from the crypto asset manager Grayscale, is the largest U.S. investment vehicle for buying bitcoin (BTC) through a stock exchange. The Grayscale discount represents the difference between the price of the underlying bitcoin assets and the value that’s implied from the price of the trust’s shares. (Grayscale is owned by Digital Currency Group, CoinDesk’s parent company.)”
We believe that once a significant number of buyers takes advantage of this opportunity, GBTC price will return to being close to the spot bitcoin price.
Adding to the above, due to the recent surge in eth fees, CoinDesk reports that “The network congestion on Ethereum blockchain has increased demand for Ethereum alternatives as well as layer 2 scaling projects like Polygon, which has sent their tokens’ prices skyrocketing.”
CoinDesk added that “The price of scaling solution Polygon Network’s native token, MATIC, was up by more than 22% in the past 24 hours, per data from Messari. Its price logged a record high on Saturday at around $1.87.”
Hence, we think there’s a chance that ETH/USD consolidates while traders have a bigger appetite for riskier assets. However, once the rally is over we think eth will begin a new move towards higher price ranges, closer to $5,000.
Traders Tweets
Today’s first tweet comes from Crypto_Ed_NL a cryptocurrency trader.
In his post, the trader wrote that “$BTC has been ranging in what looks like an endless chop since the end of February. Now go find me a BTC bull run that ended with 3 months of consolidation, followed by a breakdown and ending the bull run.”
We agree with his take that this is not the bull-run cycle top just yet. One of the reasons he points out is that tops usually end with a blast, not in a consolidation period.
Hence, we think there’s plenty of more steam ahead, especially once bitcoin goes back above $60,000.
Until then, we believe the best move for investors and traders is to look into altcoins. Mainly, ETH/USD.
The following tweet comes from Documenting Ethereum, a Twitter account focused on ethereum statistics.
In its post, Documenting Ethereum discussed a spectacular indicator, that “~9.4% of the circulating $ETH supply is now locked in the DeFi ecosystem.”
Since ethereum’s goal is to become the internet’s world computer, we’re quite excited to see a significant portion of the entire ether supply being locked in DeFi (Decentralized Finance) protocols.
Hence, that’s just another reason why we’re extremely bullish on ETH/USD.
The last post of the day comes from Koroush AK, a cryptocurrency analyst.
In his post, he wrote something we hope all long-term investors hold to heart, that “I do not believe one person's tweets have the power to bring down $BTC long term.”
Additionally, AK shared the strategy we enjoy applying the most when there is blood on the streets (sellers are moving the price down). He concluded that “This Elon FUD is just another opportunity for accumulation.”
Crypto Market Watch
Bitcoin's price plunged during the weekend, by more than 10%, and it is now trading around $46,700, according to CoinGecko. While we think that this situation will continue for now, we also believe this is a great time to be invested in altcoins, mainly ether and smaller caps.
Looking at BTCUSD, we suspect there are confirmed buy orders of around $45,000; we think those same buyers are providing support at $47,000 as well. Therefore, we don't think bitcoin's price should drop below $45,000.
ETHUSD is now trading just above $3,450, and while it is consolidating, we think it will soon start another rally. Ether was expected to experience corrections, producing more high-probability trade setups, but this was only obvious during shorter-term time frames. Right now, we recommend some caution when opening long positions. Our target remains around $5,000.
Conclusion
Currently, the market is picking altcoins over bitcoin. Hence, altcoins like ether will be the most profitable in the next few days.
Nevertheless, there are two primary critical indicators traders should monitor to spot a trend reversal and to move their altcoins into bitcoin:
Bitcoin's price going above $60,000.
Bitcoin's dominance rising.
Once we see both indicators above confirming that bitcoin is rallying once again, we think the time to focus on altcoins is over.
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