Monthly Crypto Alpha Report – October 2024

The fear in the markets has made way for hope – and well-founded hope. BTC still needs to clear the final hurdle though. 

Market Roundup

Bitcoin

BTC has printed a higher low, the first sign that the downtrend might be broken.

We’ve also taken out the local top of August 25.  

What the bulls have to prove now, is that they can take the 69 k hurdle, or thereabouts.

Zooming in a bit on this chart, we see a nice W pattern evolving.

This breakout, in other words, will set us up to test the all-time high for BTC.

Zooming out again, let’s look at the weekly MACD chart of the past years. If the current price action continues, it could cross in a week or two. It could set us up for a nice BTC rally.

Look at a few previous bull crosses of the weekly MACD. Big pumps have followed such a MACD cross. It flashed in October 2020, and a 400% pump followed. I’m not saying the pump will be so huge this time, but a 100% to 200% gain for BTC is in the cards, I contend.

As you can see in the chart, a MACD bull cross doesn’t always lead to a pump. But the current circumstances lend themselves to such a scenario. 

Why do I think a pump is in the cards?

• Gold prices are at an all-time high. Typically, $BTC often lags behind gold by a few months.
• The Fed just cut rates by 50bps, with plans for another 50bps cut before the end of 2024.
• China just announced multiple rate cuts, and the Chinese central bank has flooded the market with liquidity. Countries all over the world are turning the money printer back on.
• Fresh money is coming into the crypto market, worldwide liquidity but also crypto specific (FTX repayments are on the horizon). The dollar (dxy) has confirmed its breakdown, which is always good for risk assets.
• Institutions like BlackRock are promoting Bitcoin, small countries like El Salvador keep stacking, state pension funds are buying Bitcoin 
• Q4 has started: traditionally a good quarter for the crypto markets. On top of that, the US presidential elections are coming, and the incumbents want to pump their voters’ (stock) portfolio.

All this doesn’t mean that BTC can’t drop back to the 64 or 62K level. This could be a bullish retest.

And to be fair, there is still a risk of a recession in China that could spill over to the rest of the world. This could still ruin the party. Another risk that lingers is when the soft landing scenario in the US won’t play out as hoped.

Ethereum

Ethereum measured in BTC has broken down from its multi-year wedge pattern. Two weeks ago, it even traded below 0.04 BTC, a level not seen since spring 2021. 

There are solid reasons for long-term optimism though. Also, it is reasonable to believe that ETH is very close to a bottom in BTC terms (or maybe it’s already behind us). 

Historically, ETH catches up to BTC in the final phase of the bull market. The Ethereum ecosystem is still thriving: its Layer 2’s are in big demand and in terms of developers Ethereum is still the solid number 1, by a long stretch.

Interestingly, in 2019, ETH only started rallying versus BTC after the FED initiated a cycle of rate cuts, starting on July 31, 2019. Now that we have started the new rate cuts cycle, this should give ETH bulls hope. The above blue pattern at the tail end of the wedge is a sketch of how this ETH/BTC recovery could unfold. The takeaway is that it could take us well into 2025 before ETH is strong against BTC again.

Airdrops of the Month

Top Altcoins To Watch

NFT Mints of the Month

DeFi Farm of the Month

Final Notes

The current setup is bullish, now we are waiting for the final confirmation. In the meantime, prepare your watchlist of altcoins.

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Legal Disclaimer

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.

You can find a full disclosure of all my crypto & venture investments here.