A Maximalist's Market

Uncharted 42

Dear Subscribers, in this Uncharted:

• We analyze BTC’s post-rally performance as bitcoin price upholds uptrend to weaken resistance at $31k with the rally to $32k, with some downside risk factors, but a strong bullish sentiment in the market.

• We describe the impact in the macro environment of the Personal Consumption Expenditures Price index (PCE), the Federal Reserve's preferred measure of inflation, among other factors.

• We go over the situation of altcoins' underperformance and BTC's extended grip over the broader digital asset market as BTC’s dominance keeps growing. Here we also consider factors such as the SEC’s latest move against spot bitcoin ETFs and one altcoin that may continue thriving in a bitcoin-centric environment.

Let’s dive in!

---

---

Join the Premium Telegram Channel to get the latest updates on the Crypto market!

---

State of the System

If you have followed our Twitter (@Negentropic_) you have probably seen it echo our Compass series’ clear sentiment of this year’s blow-off top, and bitcoin’s rise to $35k being just around the corner this summer. Our conviction of this level being achieved in the near term is higher than ever now, and as we see in figure 1 our State of the System metric has now moved deep into bullish territory. Any short-term jitters will likely be relatively small, yet we analyze where short-term weakness may stem from in our Macro Environment, Crypto’s Course, and Outlook sections below.

Figure 1: State of the System is a bitcoin-centric market modality visual distinguishing between bullish and bearish regimes and transitions depending on bitcoin’s performance along two axes: Risk and Directional Momentum.

Looking at bitcoin’s price (figure 2), the level around $30.5k has been solidifying, while the next significant price level that we could fall back to in a normal retraction is around $28k. Not all that bad, and also the average level where MicroStrategy amassed bitcoin over the last 2 months. 

Figure 2: BTC price evolution and Trading Volumes.

Are we very concerned about a $2k to $3k retraction? Not really. Take a look at the bitcoin risk signal (figure 3), and how it seems to enter a similar modality to other times this year where its massive rises from sub-$20k to where we are now kicked in.