Monthly Crypto Alpha Report – December 2024

Can we take a moment to celebrate? 100k!

Being glued to the screen for four years has finally given us the promised price target.

So please, guys and girls who have gritted your teeth all through the past bear market and recent consolidation – give yourselves a pat on the back. Do a little dance, if it fits your character. You’ve made it.

And strap in, because it appears like we’re not done yet.

November closed with the biggest green monthly candle for BTC in absolute terms, a 26k gain.

Obviously, the election of Trump and his pro crypto army had something to do with this. The market was holding its breath – and got what it wanted.

Add to this the buzz around MicroStrategy’s insane buying spree, and talks of a strategic Bitcoin reserve in the US. This might not materialize, but the fact that it’s on the table would have been unthinkable just 5 years ago.

After BTC peaked just below 100k it took a breather. Then, in the early hours of December 5th, it started its next move higher, finally breaching the first milestone price target since 2017 (10k at the time).

The only reason for caution is that the global liquidity conditions have been quite tight in the recent month. BTC seems a bit overstretched versus global M2. However, according to a report from Andreas Steno, the Fed is considering changes to support liquidity developments as early as December, effectively waving the bull flag for risk assets again. Let’s see how it plays out.

Altseason is upon us

Bitcoin dominance seems to have broken the months-long uptrend. 

It seems to have topped just above the 60% level and is currently sitting around 56%.

As Bitcoin dominance is now at its lowest level in more than 3 months, it is officially altcoin season: alts are now en masse outperforming BTC.

90% of altcoins have outperformed BTC in the past 90 days. That outperformance mostly happened in the recent two weeks. 

This doesn’t mean that the altcoin dominance will stay so high from now on. First of all, these levels don’t last longer than a few months. Second, another BTC pump could take the wind out of the sails of altcoins for a while, so the altcoin index could drop below the 90 percentile mark again… until BTC takes a breather and alts outperform again. That will be the true altcoin season.

Only a month ago, interest from retail investors (‘normies’) just started materializing. But now, they’re back. 

The Coinbase app ranked #1 among financial apps at some point in November. In the overall ranking, Coinbase hit 19 on December 2, one spot higher than Google Maps. Still, we’re not in the frenzy zone of, for example, spring 2021. But that could change in days or weeks. 

Ethereum Looks Very Decent

Last month we called this section: Ethereum, Darkest Before Dawn? Indeed, that might have been the case. 

ETH has been up 56% since the beginning of November, compared to BTC roughly 48%.This is another sign that altcoin season is heating up.

ETH is currently gearing up for a massive breakout from a multi-year wedge. Above is the most watched chart on Crypto Twitter, for sure (ok, after BTC maybe). 

Apart from the charts, there is also bullish news on the fundamentals. For example, the Ethereum Layer 2 chains are doing really well in terms of on-chain activity. Base, especially, is going berserk. This L2 activity benefits the Ethereum ecosystem and will ultimately create price pressure on ETH.

Then there are the ETF’s. Currently, there are no US Ethereum ETF’s that compound staking rewards. An interesting development is that ETF provider Bitwise has acquired Attestant, a well-known Ethereum staking service provider. Attestant specializes in non-custodial staking services. The acquisition suggests a strategic move of Bitwise to integrate staking into their ETF ecosystem. This could pave the way for an ETH staked ETF.

Here is the 50-day simple moving average of the ETH/BTC chart. After bumping its head against this line for months, it seems to have reclaimed it as support. Historically, in this phase of the market, whenever ETH managed to cross and hold this SMA, it meant that ETH/BTC bottom was in and alt season kicked off.

Things are looking good. We’re in the later stage of a bull market, in a traditionally bullish December month that’s also post US elections. Monetary conditions are loose and the business cycle is looking solid. What’s not to like?

The number will likely go up, but, as always, be prepared for pullbacks and choppy sideways periods.

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TCL Publishing ltd (director Lark Davis, owner of Wealth Mastery) is not providing you individually tailored investment advice. Nor is TCL Publishing registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. TCL Publishing is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.

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