Monthly Crypto Alpha Report – January 2025

Even though BTC made it past 100k in December, the mood sure can turn fast in the crypto market. Price-wise, we’re right back where we started on the first of December.

But even though December didn’t end on a bullish note, the current market structure looks good. BTC has had a healthy correction after the big pump to 100k and flushed out most greed and leverage.

Quality altcoins like Solana have held up really well. Booming new narratives such as AI Agents show us that the market still has a risk appetite. It’s just the money printing that’s missing. Let’s jump in. 

As we cautioned in last month’s Crypto Alpha Report, BTC seemed overstretched versus global liquidity conditions. A correction was in the cards. 

Ol’ orange coin topped right above 108k and then took a 16% hit. This is of course natural in a bull market and it makes sense towards the end of the year, as investors, both retail and professional, want to realize some profits and close their books.

BTC went on to flirt a bit too often with the 50-day EMA around the 93k mark, but has in recent days bounced off of it. It also broke through the downward trendline. The RSI reclaimed the yellow line. For now, it seems like the breakdown from a looming head-and-shoulders has been fended off.  

This all happened against a backdrop of MicroStrategy buying truckloads of BTC, and talks about a Strategic Bitcoin Reserve.

In the meantime, a bit under the radar across the pond, a milestone was reached. In the EU, the remaining provisions of  Markets in Crypto Assets (MiCA) went into effect. With this new regulatory framework, all EU member states have a single set of crypto rules. This makes it easier for crypto companies to operate and it will no doubt boost institutional confidence. Which, in the long run, is bullish for the prices.

What’s suppressing the rally right now is a lack of growth of global liquidity (M2). M2 has been in a downtrend since October. The nature of the global financial system dictates that it will have to go up again, to refinance the interest on the enormous pile of debt. But be prepared for some choppiness in the meantime.

Altseason is… not quite upon us

Last month, we proudly declared altseason. Well, it was a short one!

Did it all mean nothing then? No. The uptrend of Bitcoin dominance has been broken. As can be seen in the chart below, the Bitcoin dominance tried to reclaim the rising channel but was rejected.

I take this to mean that we’re in between stages. It’s not ‘Bitcoin season’ anymore but it’s still too early for a full-fledged altcoin season. If history rhymes, in Q1 or early Q2 of 2025 we will witness a true altcoin season. 

So maybe take the short altcoin season we had as an omen of what is still to come!

Ethereum Failing the Breakout

Ether flirted with a breakout but failed. 

ETH bulls still don’t have a lot to cheer about. Patience is a virtue. A potential inverse head-and-shoulder pattern could form against the downward-sloping resistance line. A break of $3.800 would be another attempt to finally break loose.

Here is the 50-day exponential moving average of the ETH/BTC chart. 

After bumping its head against this line for months, it seemed to have reclaimed it as support. Then it was rejected again. Currently, it looks about to be primed for another attempt. A good breakout on this is what Ethereum and the altcoin market in general needs. 

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.

Solana

Of the major coins, Solana is probably looking the best. 

The daily MACD has flipped bullish and SOL has crossed the important $200 line. At the time of writing, SOL is poking its head against the downtrend resistance line. If it flips that, we’re good again.

Let’s see what January brings, as professional investors start with a fresh P&L and have money to spend. The markets are waiting for Trump to take office. Will he bring some pro crypto action or will he have more important matters on his mind? Will global liquidity see an uptick again? It’s all to play for.

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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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