Analysis of the cryptocurrency market and conclusions as of 30/04/2024

In the attachment, you will find a Bitcoin chart with visible support zones marked in yellow. We have just reached one of them, reaching up to 59,000 USD. There is a good chance that this zone will hold, but if not, we have a huge chance of reaching at least 52,000 USD for Bitcoin.

In the 4-hour chart, you can also see the average of the last 66 candles, which clearly reflects the "average real market value" of Bitcoin. We can see that deviations from this average are usually not significant, and the price sooner or later returns to it. I observe that the current deviation has entered quite a large territory. Of course, this fact alone is not yet a guarantee, nor does it mean that we will rebound and grow. We may continue to fall further, also lowering the average itself.

However, we see that we are entering a territory that is a buying opportunity for BTC and many altcoins with at least part of the capital, e.g., 10%. This is a potential bottom, but it may be deepened, so capital needs to be prepared for that. In the very likely case of a bullish continuation, we will look at these prices with envy in six months. Eventually, there will come a moment when alts will rise 30-50% in a few days, and your inner Scrooge McDuck subconscious will either tell you it's too late because the market has taken off - or ask "is it still worth buying?"

It is important to note - we are in an uncertain phase in the market, and there are many terms in this article that may be this or that, as we already see above. People who do not like this probably have little experience in the market. Because at the end of the day, no one has a guarantee in which direction the price will be influenced by thousands of independent market players. Therefore, we consider all pros and cons. It is like predicting the weather based on thousands of factors and differential equations only approximating reality. Therefore, those who feel like criticizing me for analyzing "50/50 chances of growing or falling", I invite you to a page dedicated specifically for you: https://wrozkavelessa.pl/ - only 30 zł for the service.

Going back to the analysis. In the weekly chart, we see first a very steep trend that we are approaching. You can see that we are missing a few weekly candles to elegantly reach it, for example in the price range between 55 and 60 thousand USD, and then bounce back. However, the crypto market likes to break trends, so this is just a premise, not a guarantee. I show this, however, because it provides perspective over the long term, while many people would like to create this trend here and now. This may simply not happen.

Back to the illustration. Below, we see a much less inclined growth channel that held the price movement from the low of our last bear market to the incredible breakout at the end of February this year. Since then, this channel has become support, but it would not be surprising if the price returned to it. This would be a healthy price normalization. Let's imagine further consolidation with a downtrend that could last until summer or longer. This would not be surprising. This should also calm us down.

On the left side of this chart, we see the covid low from 2020. First of all, we see again that our upward tunnel had contact with the price here. On the side, I would add that it led the price much more strongly in 2015-2016, but I do not show this on the illustration. The crux here, however, is that this correction lasted 261 days. This should speak to our sensibilities and calm us down if we track the markets every day and expect dynamic movements in any direction.

Bitcoin dominance is currently at 55% after dropping from 57% on April 13th. For beginners, I remind you that every movement in Bitcoin dominance of even 1% means huge increases in altcoins. I also attach this as an illustration. Note that the second level, i.e., 57%, was a potential support level stemming from the local low in 2020.

However, we are still in an upward trend in terms of dominance. We are still making higher highs and higher lows. Starting from the beginning of the market, we can draw a downward trend that on a logarithmic chart could take us back to 58%, because we have not touched it yet (the illustration is on a logarithmic chart). Changing the chart to linear, unfortunately, we see that this trend has already been broken and now acts as support. This means the potential for further Bitcoin growth with altcoin declines, or for example, a situation in which Bitcoin remains in place while alts bleed out.

In the figure, you will also see Fibonacci retracement measurements. You can see that even a drop to 51% would keep the dominance in an upward trend. However, this is just a curiosity because such a significant drop in dominance would effectively mean an altseason.

In summary, Bitcoin is already relatively expensive compared to altcoins. It certainly provides greater security against any further declines than altcoins, but it is not excluded that the 57% level we reached was the maximum Bitcoin dominance in this cycle. I do not blame people who are slowly deciding to exchange a small percentage of their Bitcoin for the most promising altcoins through pending orders. This is, of course, catching falling knives rather than joining a bullish trend, so some analysts focused on safety would consider it too risky.

It is worth mentioning that the fear and greed index on CoinMarketCap has reached 58 out of 100 points. During the previous correction in January this year, we dropped to a level of 49.5 for two days. This means we still have potential for declines if the situation were to repeat itself.

On the other hand, many altcoins have already experienced declines of 30-40% over 30 days. Looking at the chart, we see very concrete corrections, e.g., 43% from the DOGE peak, 38% from Ethereum (although this only lasted for a moment), and currently 27%, etc. These are significant drops, and hunting for, e.g., DOGE or ETH to drop by 80% from their peak, in my opinion, does not make sense (it is unlikely and would indicate entering a bear market).

Therefore, I attach the Ethereum chart to Bitcoin, where you can see that ETH is at an important Fibonacci point between 0.5 and 0.618 of the previous growth. This is a very important zone. At the same time, we are still in a downtrend, under the trend that has been holding us from above, and... we have broken this trend, which was previously support and is now resistance.

Again, I don't want to sound indecisive, but it looks both uninteresting and like an opportunity at the same time. Perhaps this is one of those moments when you should "be greedy when others are fearful." However, for those who prioritize safety over profits, we would like to wait for the moment when ETH breaks this trend currently holding from above, which will probably be around 0.056 ETH/BTC. It is a matter of individual risk tolerance.

In conclusion, the market is very uncertain, and we certainly do not have a clear upward trend, nor do we have certainty whether this is the bottom of the declines or whether they will be deepened. It may also happen that we will continue to consolidate for another 2-3 months. However, these are levels where you could slowly buy, as well as place orders to buy even lower.

We need to arm ourselves with patience, which is not a strong point for me. How to do it? (Nothing here is investment advice, these are my private observations and opinions).

1. Do not keep all your funds in crypto yet. Leave some funds for further purchases.
2. Set up an order grid going very deep down. For example, for DOGE below 0.14 with cents, 0.13, 0.12, 0.11, 0.10. I believe a drop below this level would be a disaster. Orders allow us to sleep peacefully and we rejoice when they fill. On the side note, DOGE/BTC is at the level of 0.00000221, and it could still drop to around 0.00000184 (of course, it does not have to).
3. If it turns out that we have just caught the bottom and are already going up, make further purchases on a confirmed upward trend, but with less risk. At this point, be very careful that a local upward correction does not necessarily mean breaking the current downtrend. Here, we would mainly like to see a sustainable break of the Bitcoin ATH - either with a retest or with great momentum - this would be a fairly clear signal of a continuation of the bull market. Again - a sustainable break.
4. For advanced users - consider using a portion of your capital to catch Fibonacci extension orders of the mentioned upward corrections to buy back on lower declines, if they occur. Similarly, thinking about the current market, I'd consider a BTC pump to $64k as an opportunity to evacuate a small portion of capital before a potential further decline. That is, if we feel too heavily invested in crypto. As I mentioned again, the range of 59k-74k does not guarantee the creation of any upward trend. Therefore, from the level of e.g., 70k, we could again drop to 50k if this correction were to last a few months. Therefore, at this point, I'm talking about a small portion of capital, and even 70k could be an opportunity to de-leverage if we bought too many alts (if the market were to pull down everyone so strongly, i.e., if we fell back from 70k again).
5. The continuation of the bull market over the next dozen or so months is still in play, so regardless of what we do now, holding cryptocurrencies should give us a chance for significant profits. Therefore, all the above ideas are just a way to optimize profits locally for people with restless hands. Patient individuals, unfortunately, I do not count myself among them, will win by keeping their hands under the chair and focusing on other things.