After all of the Fear, uncertainty and doubt since the beginning of the year, those who saw what we saw and took the necessary action to add to their positions during such a prime market opportunity are being rewarded in spades as we speak! With full market-wide reversals back to the upside, we’re very glad to see that since the last article I wrote back at the beginning of April before the final sell-off and capitulation leg took place, we’ve not only hit our targeted support zones across BTC and other Major-alt coins, but we’re back on track regaining the previously lost local trend with extreme bullish momentum that is likely to continue for the foreseeable future. Ultimately, this means that the broader market crash in response to global narratives we saw is now nothing but a blip on the radar as we continue the Bullrun. Trend wasn’t lost across any of the major assets, even looking over at US Indices; the S&P500 (yes – we keep a very close eye on this too) didn’t lose major trend support and completed a fairly textbook retest correction which is now being followed by a continuation to the upside, likely to All Time High prices again with feverous momentum – another great sign that the bottom is in. Even the Fear and Greed Index is pushing 70+ again, now in “Greed” territory, compared to when sentiment was down in the slumps in “Extreme Fear” around 15 just a mere 6 weeks ago. Make no mistake, that’s just how quickly things change in this space. Let’s take a look at where we think things are going from here, so we stay ahead of the curve once again as we melt-up into the retail euphoria phase that is to come.
Since our last article, we’ve seen the capitulation and market sell-off reaction that we predicted in response to Trump’s Tariffs. This has taken us to the zone of support which I outlined in the previous April article for a great deal of assets that we’ve been actively trading, the most notable one being Bitcoin of course. We got the final leg of the sell-off very quickly for BTC and for the broader market as a whole within days of publishing the article which gave the heads up to our clients that this was a high likelihood. As a result, it should’ve been no surprise too that we also landed into the strong support zone I outlined in that article, which consequently saw us bottom at precisely $74,434, of which we then started to move back up hard and fast with a “V-Shape” reversal pattern.
A clearer view of the chart can be found here:https://www.tradingview.com/x/EPRxOLse/
Not only did we start heading back up hard and fast, which is to be expected after a large emotional sell-off, but we also with haste started breaking through multiple local weekly resistance levels in order to solidify the notion that the bottom is well and truly in. These levels are derived from the previous trend resistance and landed us both $86,084 and $96,262, both of which price is holding well above now at a whopping $102,000 again (That didn’t take long!) All that’s left now is for BTC to keep up the momentum and crack the previous $109,356 High that we set in December, so that we can carry on melting up as we enter the later stages of this Crypto Bullrun.
With this being said, clearly Bitcoin has performed tremendously as the leading asset for the Crypto-space this cycle. Despite being in the later stages of the Bullrun, its strength this cycle cannot be underestimated; however, as we’ve detailed in previous articles, the dominance of Bitcoin has always reached a plateau each and every cycle where despite continuing to rise nominally in price, its strength relative to its altcoin counterparts starts to diminish as retail and now institutional investors will begin to hunt down those fundamentally sound and resilient projects that are somewhat undervalued in order to close out the maximum possible gains for their portfolios as prices start to get crazy from here.
Looking at BTC’s Dominance chart once again, we can see the channel of resistance we outlined earlier in the year to clients still holds true as the index appears to be topping precisely where we anticipated, and it couldn’t come at a more opportune time.
A clearer view of the chart can be found here:https://www.tradingview.com/x/BZ2q2inw/
At the start of May, once the recovery in nominal prices across the board started to pick up speed, we consequently saw BTC’s Dominance top-out around 65% which was the top of our predicted resistance zone. Since then, we’ve started to pullback and given that major altcoins individually remain bullish from here, this correction in BTC’s Dominance is likely to continue; therefore, meaning that Altcoins are gaining quicker in gains relative to Bitcoin. Again, this doesn’t mean that Bitcoin is going down in nominal prices, rather that altcoins are going up quicker and faster in % gains relative to BTC’s continued upwards growth. I suspect BTC Dominance will likely continue to fall from here for the remainder of this Crypto Bull run cycle, at least until shortly after the major altcoins top-out in their respective nominal dollar prices; of which then when the bear market eventually starts to set in, BTC will renormalize and re-absorb the majority of Cryptocurrency liquidity once again despite being in a bear market, just as it’s done historically in previous cycles. Let’s take a look at two of the Major altcoins now that we’ve been keeping a close eye on which we believe are likely to perform well from here on out over the coming months.
Ethereum took a beating with the rest of the market during the Trump Tariff scare which makes a lot of sense as FUD (Fear, Uncertainty & Doubt) doesn’t discriminate when it takes hold and isn’t rooted in much logical reasoning. As a result, we saw ETH lose its previous support and double-bottoming structure, falling into another major trend support level at $1554 where it has since held firmly.
A clearer view of the chart can be found here:https://www.tradingview.com/x/BiQ2pPUB/
The good news is that despite what might appear as ugly price action at first, this has positioned ETH to be extremely undervalued whilst still retaining the #2 place in the Crypto pecking-order in terms of Market Cap this entire time. These types of “good deals” amongst major tokens are EXTREMELY rare and should not be ignored. This is why since the bottom has come in across the entire market, we’ve seen ETH not only reverse back up too, but we’ve seen it in fact outperform significantly compared to not only other major altcoins, but the entire market as a whole, pumping near a whopping 100% in just the last 5 weeks. This because “The harder they fall, the harder they pump” and the ETH/BTC chart echoes this sentiment as well, showing that it’s currently holding the long-term Macro Bottom from pre-covid, therefore meaning we likely will bottom out here again creating a very strong “Double-Bottom” support, further giving credence to the notion that ETH will continue to outperform BTC from here despite falling out of favor in the eyes of retail earlier this cycle.
A clearer view of the chart can be found here:https://www.tradingview.com/x/BWQmuWqW/
The fundamental narrative that’s shifting for ETH now which is helping support this shift in Price Action is that the Pectra Upgrade has gone live; simply meaning that ETH is finally starting to correct its scalability issues that created high gas fees and network congestion which has been plaguing users of the network for a number of years.
While it’s nice to see ETH finally catching a break, there’s another major Altcoin asset that had once previously fallen out of favor too, but this cycle has seen it truly come back with a vengeance, and we don’t have to look far down the market capitalization list to find it…
XRP, the token of Ripple I remember wasn’t even on people’s radar last cycle due to the now determined unsubstantial lawsuit filed by the SEC and the delistings that followed the suit. Since then, Ripple have reclaimed their deserved place in the top 3 pecking order of assets (not including Tether), their token; XRP has truly held up well this cycle, undoing any of the previous cycles poor performance and is well poised to take advantage of this cycle’s continued growth. From a Price Action standpoint, XRP is holding up much better than ETH as it didn’t lose structural trend despite falling a sizeable 52% from peak to trough from when we were predicting an imminent market pullback in December of last year.
A clearer view of the chart can be found here:https://www.tradingview.com/x/1Umm4GiG/
XRP held its uptrend on the weekly timeframe, unlike ETH; therefore, despite XRP falling to a low of $1.61 where we correctly targeted our support zone months prior, it shouldn’t prove too difficult to keep creeping up higher from here as there’s far less headwind in ways of resistance to stop continued price appreciation. Conversely, XRP has also been setting up two different yet very bullish patterns over the last few months, both a Bull flag and an Inverse Head and Shoulders. Similar to what we predicted BTC would do around $50K pre-US Elections, I wouldn’t be surprised to see XRP do something similar from here. Given its strong narrative and ETF-hype as a well-positioned American-based Cryptocurrency project with close ties to the Trump Administration, this one is looking finally ready for incoming All Time Highs for the first time since January of 2018.
Finally, there’s a combination of Bullish narratives hitting the market all at once since the market’s price recovery; between the beginnings of a deal for the China & USA trade war negotiations, a potential ceasefire for the Ukraine and Russia war, US CPI Inflation data coming in lower than forecast once again last week and of course Trump’s 90 Day pause on Tariffs, there’s no wonder prices are reflecting the bullish sentiment that we’re going higher from here. Even the S&P500 has done a textbook V-shape reversal off its major support at 4825, now back at near 6000 again; a very similar recovery to how the index pumped coming out of the March 2020 covid crash. It’s clear that the market’s perception of all these cascading narratives has shifted radically from “It’s over” to “We’re so back.” All of this is great for Cryptocurrency, and with the first glimpses of a late-stage alt season truly beginning, make sure you’re ahead of the curve with us at Stormrake and ready to seize the opportunity like many of our clients did in the last 6 weeks – because believe it or not, you’re still early.
Written by James Ryan
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