Monthly Crypto Alpha Report – February 2024

Was that only a month?

It feels like a quarter ago when we were still waiting for the Bitcoin spot ETF approval. Time flies when you’re having fun… 

What a month though. The ETF, Larry Fink shilling the tokenization narrative… airdrop mania… Let’s get some perspective.

While strictly speaking we saw BTC’s fifth green monthly close in a row, the price basically ended the month where it started (roughly 200 dollars higher).

The January monthly candle for BTC was a nice example of a so-called long-legged Doji candle.

This type of candle has roughly the same opening and closing prices and long upper and lower ‘shadows’. It reflects indecision in the markets. 

We know of course what caused the wicks: the excitement and speculation surrounding the spot BTC approval. Traders went long with leverage, pumping the price before getting liquidated. It turned out to be a sell-the-news event after all! 

But that’s ok. After the dust will have settled, the upward price pressure of the ETFs will be noticed.

While we can’t celebrate gains on the monthly chart, a few observations are comforting. 

First, the Bitcoin ETF launch and its first trading weeks were a huge success. The two biggest BTC ETF’s – Blackrock and Fidelity – have already sucked up more than 100,000 BTC.

Second, the Grayscale Bitcoin Trust was also converted to an ETF, which means that, finally, the old trust product no longer exists. The premium or discount at which GBTC used to trade to spot price has inflicted a lot of pain on the markets. It was the cause of the downfall of the infamous funds like 3AC in 2022 and subsequent market crash. 

Now that this product no longer is, we can finally put this final piece of toxic bear market trash behind us. We can start the new cycle with a clean slate. 

In fact, the current market structure looks quite like summer/autumn 2020, as can be seen from the below chart. Just like in early autumn 2020, we are a few months after a bullish crossover of the MACD.

Maybe we should be patient though: unlike the autumn of 2020 we are still before the Bitcoin halving. This suggests that the explosive part of the bull market could be a bit further ahead than just weeks. 

Another difference between now and then is that currently, the FED is trying to keep interest rates high as long as they can. At the time of writing, regional banks in the US show signs of trouble again, which could force the FED’s hand (read: money printer go brrr, crypt

As mentioned, some technical indicators remind us of summer/autumn 2020. It’s also the new narratives that bring back memories of that period in 2020.

At the time, we saw Paul Tudor Jones and Michael Saylor championing Bitcoin as the ‘fastest horse’. Now, its Blackrock’s Larry Fink shilling the tokenization narrative.

And in the same way we had DeFi summer back then, it’s the airdrop frenzy now.

Let’s keep going and enjoy the ride. By the way, are you already thinking about your selling plan 😉 ?

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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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