Preparing for the next leg up

Uncharted 43

Dear Subscribers,

In this Uncharted:

• We describe crypto’s bullish momentum and the short, mid, and long-term scenarios. We deep dive into each one of the factors that can take BTC’s price to higher levels.

• We examine the macro environment as stocks climbed for the fourth straight day, but the real winners of this week’s trading were crypto investors. Prices of cryptocurrencies shot up across the board after a judge issued a favourable ruling for Ripple Labs in its battle against the SEC.

• We analyze Ripple’s success story, serving as a reminder of the potential gains and opportunities within the altcoin space. Regulatory clarity and increased confidence resulting in investors seeking diversification and exposure to groundbreaking projects will likely turn their attention to altcoins, driving capital inflows.

Much more below, so let’s dig in!

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State of the System

If you are a subscriber from the last Uncharted and other publications, you could have seen our clear sentiment of a bullish scenario for BTC in the mid-term and long term. Crypto is back in full force, as seen by the most recent read in the State of the System in figure 1. We are deep within the bullish quadrant as BTC regains momentum, climbs to $31.5k, and altcoins show strength. The risk of a pronounced drop is low, and XRP is disregarded as security has picked up sentiment. We are in the initial phase of a substantial extension that will drive BTC beyond $32k and trigger the long-awaited alt season.

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.

Bitcoin ranges between $29.8 - $31.5k for under a month. This month-long consolidation period has subdued volatility, but we are confident that we will break out of the range sooner rather than later. Bitcoin’s bullish trend remains in play, pushing the potentially challenging bottom levels to $28.7 and $29.5k. Yet, $30.1k looks like a more accurate mid-term bottom according to bitcoin’s average true range, as shown in figure 2.

Figure 2: BTC price evolution and Trading Volumes.

Zooming into the current range, hold of the $31.1k level would set the foundation for the next move up. We need to be wary of the forging short-term range between $31.2 and $32k, as shown in figure 3. The spot CVD needs to hold the uptrend to break above the supply wall set at $32k, which means that this break above brings in new players willing to bid (buy, market orders) to push the price higher.