Altcoin market signalling expansion before Bitcoin or Ethereum?
In any market, one of the hallmarks of the beginning and the end of a new expansion phase is speculation/investing in emerging markets. It’s part of the Risk-On, Risk-Off way of trading/investing. With cryptocurrencies being the most speculative of speculative markets, its weird to think that something in this market is more speculative than others – but there is. And Altcoins represent the highest degree of speculation.
Altcoins Leading The Charge?
Since the start of the Columbus Day weekend, the cryptomarket has seen some big moves in a few coins. 0x (ZRX) is one of them. Since Friday (October 5th), ZRX has moved from 0.00009510 to 0.00011990 – that’s a +26% move. Sure, during that move it retraced great than 50% of that move, but at the time of writing this article ZRX has jumped and recovered that loss. It’s currently sitting above the key Major 4/8th Harmonic. This is a big deal because the 4/8th Major Harmonic is the hardest price level to cross above or below. It’s a testament to the strength of the move that it sold off, recovered and is now trading above this key level. ZRX is just one of five coins of what I call the Coinbase 5. The Coinbase 5 are the five cryptocurrencies that Coinbase Tweeted back in July that they were considering adding to their platform – the other four being Cardano (ADA), Basic Attention Token (BAT), Stellar Lumens (XLM) and Zcash (ZEC).
Key trend lines broken for Bitcoin
In the image above, there are a series of different colored trend lines and other objects on the top and bottom of the chart. These are parts of a form of analysis called Hurst Cycle Analysis. Very simply, Hurst Cycle Analysis is the study of price swings over specific time frames and finding trends off those time frames. The diagonal lines are called Valid Trend Lines in Hurst Cycle Analysis – they are color coded to reference a specific time frame. The image shows Bitcoin has recently traded above the 18-day (purple) and 40-day (blue) downtrend lines. Back on September 19th, Bitcoin crossed above the 21-week trendline and has been able to remain above that line in price and in time. The next major trendline for Bitcoin to cross above is the 40-week uptrend line, which is currently above the $10,000 value area. If we follow this daily chart and assume the bullish nature continues, then the 18-day uptrend line should hold as a good support level.