Dear Subscribers,
The last two weeks have been more quiet but as exciting for bitcoin, with price reaching year highs and the potential scenario of a rate-high pause through January from the FED.
In this Uncharted:
We go over how bitcoin price stalls after reaching $38.5k for the first in 2023. The search for fresh liquidity could see a plunge to $33k before rebounding in the bull run.
We analyze Federal Reserve Chairman Jerome Powell words today, pushing back on market expectations for aggressive interest rate cuts ahead.
We outline our moving views in terms of an upcoming altcoin season, and which coins you should have under the radar. The market remains focused on bitcoin, with potential for a broader altcoin surge in the future.
Let’s dive in!
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State of the System
Let’s pick up where we left off last time in the Uncharted 52’s outlook on November 17th:
“Bitcoin has entered a consolidation phase after two weeks of volatility, hitting $38k for the first time since May 2022, before the brutal bear market. Bitcoin remains buoyant on several factors, including ongoing optimism that regulators will soon approve the first spot bitcoin exchange-traded fund (ETF), which would be expected to usher in a fresh wave of investor interest.”
During the Wednesday morning the bitcoin price reached its highest level since 2023. At the time of writing, Bitcoin was up about 10% in November, making it the first green 11th month of the year since 2020. Bitcoin closed November at $38.8k for the first time since May 2022 the morning on Friday, following a strong multi-month surge fuelled by rising institutional demand.
We are still deep in the bullish quadrant as bitcoin keeps trying to break the $38k resistance level and stay.
The numerous failed attempts to break resistance between $38k and $39k are making the scenario on a wider breakout over $40k before the end of the year doubtful. Bitcoin is leading markets in the ongoing consolidation, raising the prospect of a sweep through liquidity in a lower support zone of $30k as seen in figure 2.
It is advised to remain patient for potential flash dumps and consider dollar-cost averaging (DCA) bitcoin as it approaches the $32k mark. This strategy acknowledges that bullish movements often emerge from periods of despair, while bears may be fuelled by FOMO. The key is to maintain a strategic approach rather than succumb to panic.
While many are anxious to drive the cryptocurrency to new highs, there is a growing sense that a pullback may be on the way, and such a correction may be welcomed. A drop to the $35k level, in particular, has an alluring prospect of reviving the market's dynamics. The Risk Signal is stable at 0, which suggests that once volatility picks up, the move will take us higher. In other words, the next big move is unlikely to be a break below the current range.
Altcoins, too, have been charting an impressive course. Solana, for example, has been leading altcoin growth, indicating a broader interest in the crypto economy beyond bitcoin.
Most altcoins are losing ground versus bitcoin while gaining ground in USD. Only a 4.5% reduction in bitcoin dominance has occurred. When the Bitcoin dominant market structure goes bearish, the true altseason begins. Yes, there are outliers, but until further notice, this is still the bitcoin show.
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