Bitcoin Confirming Its Breakdown As Some Altcoins Show Relative Strength
Bitcoin is on the verge of a ‘breakdown’ but, interestingly, some altcoins are showing significant (relative) strength and really strong bullish reversals when priced in BTC. As explained to members of our crypto investing research service a structural shift might be underway in crypto markets. The details are available in the alert sent on August 27th, available in the restricted area.
First of all, the word ‘breakdown’ requires an explanation, it should be interpreted correctly. A breakdown is typically used when price clears a horizontal level. However, it may also be used to signal that price is moving below an absolutely crucial trendline.
As seen on below chart, Bitcoin is in the process of losing the rising trendline that connects the lows from the Corona crash with the lows of June of 2022. In our view, this is a breakdown which might not turn out to be dramatic. There will be a really bad outcome when BTC is going to clear the June lows (3 day closing basis) which would qualify as a double breakdown.
Ultimately, Bitcoin might follow the bearish trend channel lower. However, note that the June lows came with a very strong harmonic setup so the probability of them holding is rather high! The June lows might be re-tested though.
In the meantime, several altcoins are gaining strength against BTC. Hard to believe but true. We shared a few charts in this week’s crypto research alert: ADABTC, ETHTBC, MANABTC. Really solid, provided the bullish reversals hold.
We have even proof of this emerging trend shared in the public space. Loyal readers might remember this article: Ethereum’s Volatility Is Disappearing written back in July. It turned out that Ethereum’s trendless state preceded a big move higher. This put ETH in a really good spot: ETH is 30% above its June lows while BTC is much closer to its June lows.
We also noticed Bitcoin’s Most Trendless Period In History published back in August. It turned out that Bitcoin was not able to create momentum.
The coming few months should confirm Bitcoin’s underperformance and relative strength of several altcoins, this might come with buy alerts for some altcoins we are tracking. Remember, January 1st, 2023 Will Be A Crucial Date for Bitcoin, the market is clearly working towards clarity which we expect to get in the next 12 to 15 weeks!