Another day, another series of YTD and/or all-time lows against Bitcoin

 

Another day of the Alt-pocalypse

Bitcoin continues to stagger and shock not just those involved in the cryptocurrency world, but in the broader trading and investing world as well. Yesterday’s abrupt and rapid drive of Bitcoin towards $13,000 from $11,800 yielded great gains in the preeminent cryptocurrency. In fact, Bitcoin has risen so much that it now controls over 64% of the entire cryptocurrency market cap. But Bitcoin’s rise has been the altcoin markets demise. Today is just another day where we see altcoins create new YTD or all-time lows against Bitcoin. The USD value remains mostly flat to lower.

The Great Cryptocurrency Bear Market of 2018 still exits for the altcoin market. Altcoins continue to bleed Satoshi’s against Bitcoin and their USD values have remained flat or continue to drop. I’ve written and discussed in the past the importance of cryptocurrency market that has a rotation of capital, a ‘Circle of Life’ for the cryptocurrency markets. The process has 4 phases:

  1. Fiat to Bitcoin
  2. Fiat to Bitcoin to Altcoins
  3. Altcoins to Bitcoin
  4. Bitcoin to Fiat.

So far, in 2019, we have only observed the 1st phase being met: Fiat to Bitcoin. What I mean by this is that traditional fiat currencies like the USD or Euro are the chief mediums of trade to acquire Bitcoin. The second stage involves Bitcoin being used as the medium of exchange for acquiring Bitcoin. This is probably the most expansive and bullish phase we would observe in the entire market. Ideally, during Phase 2, we would observe a decrease in the bullish momentum of Bitcoin, maybe even a small negative percentage loss. But during Phase 2, we have a sort of equilibrium in the market where Bitcoin is leaving in vast amounts to prop up the altcoin market but enough fiat money is coming from outside the cryptocurrency market (new money) to support Bitcoin’s price. Phase 2 is where we see various altcoins experience +20% to +30% gains in a single day. We have not yet entered that phase.

 

When is Phase 2?

One of the greatest discoveries of the early fathers of technical analysis was the discovery of repetition and order in a system that appeared disorderly. Cycles are an inherent component and part of any market. Because we know that Phase 2 is coming, the ultimate question is: when? There is one objective condition that must be met and one subjective. The objective condition is the technical one. We need to see altcoins at significant lows – either new yearly or new all-time lows. The subjective condition is the psychological one. We need to see, hear and feel misery and despair from those involved in the altcoin market(s). Are these conditions met? We’ll take a look at the technical one here soon, but to answer the psychological condition: yes, we are at a psychological low. I know, for example, that traders in the Cardano Official Trading channel on Telegram are miserable. I know that you can go on Reddit or any site discussing cryptocurrencies that people are dismayed at the state of the altcoin market. So we know we are at a psychological low (could go lower!). Now let’s discuss technical – rather let’s look at some technicals.

0x (ZRX)

 

ZRX has been in a Bear market since May 10th, 2018. That’s 425 days of straight and direct downwards movement. It has lost -90.38% of its value since May 10th, 2018. It’s just a hair above its all-time low so it is near a very strong and historically important support zone. This new major low has occurred right at the start of a new 192-day Law of Vibration time cycle. ZRX’s chart is not unlike many other altcoins charts in both the length of time it has been in a bear market and the percentage loss. If ZRX is a representation of the broader altcoin market, then it is my opinion that the low of the altcoin market against Bitcoin is in and very, very near a strong reversal. We should expect to see an extremely bullish rise in the altcoin markets over the next couple of weeks.