Crypto Alpha Report - January 10, 2025
Happy Friday, friends! Is the Bull Market over or on the verge of epic continuation? Join us for Fundamentals Friday as we dive deep into the evidence and find what side of the market we should be on.
Let’s re-iterate a powerful metric: Bitcoin Balance on Exchanges. Currently, in January 2025, we have the lowest balance of Bitcoin on exchanges we’ve seen since January of 2019 - which was the bottom of the 2018/19 Bear Market.
Liquidity and the order books are thin when the Exchange Balance is very low. This means price is subject not only to wild price swings (which is why being careful with leverage here is crucial) but also sets up price for rapid price appreciation if a surge of fresh buying comes in.
However, the knife cuts both ways, as it also means less buy-side liquidity to absorb market sell orders.
However, on the positive side, we analyze how this metric has helped predict Bitcoin’s price movements, whether bullish or bearish. We notice that since 2019, prolonged periods of Bitcoin Balance declining have led to bullish price action, and it’s only once the Balance on Exchanges begins to rise again that it calls the Euphoria Phase of the Market Cycle - when prices increase rapidly.
Secondly, the long-term holder distribution of Bitcoin seems to have peaked and is currently declining - reaching peaks we’ve seen in previous cycles. In the 2017 market cycle, this metric peaked in August of 2017, when we saw a pullback in Bitcoin’s price from $4,000 to $3,600 - then we continued to rally to $19,000.
In 2021, this metric peaked in January, which saw Bitcoin’s price pullback from $40,000 to $32,000 - we then rallied to $63,000.
In 2024, this metric peaked on Dec. 10th, which has seen Bitcoin’s price pullback from $105,000 to $90,000 - we then rallied to ???,??? in 2025.
Here’s to a frothy future!
Crypto Market Update
Stablecoin Dominance
So far, a swat down from resistance and a decline of -2.17%. Buyers indeed stepped in, supporting Bitcoin’s price specifically and key altcoins. If this is the beginning of a rally, expect this metric to move as low as 5% again - but fair warning: a sustained close above 6% means a breakdown in risk on crypto assets.
Bitcoin + Stablecoin Dominance
It was an indecisive day for this metric, putting in a doji right below our 200 DMA. With altcoin buyers stepping in tentatively, this metric could go either way.
Altcoin Performance Relative to Bitcoin
Altcoin buyers have stepped in tentatively, as this metric has increased by 50 bps. This is the zone we should anticipate altcoins to bounce back - so I’m currently feeling optimistic about this metric rising following the deep deviation we had several weeks ago.
Bitcoin
Bitcoin put in an amazing rally from $91,000 to $95,000 overnight, printing more consecutive bullish hourly candles than we’ve seen since 2017.
Trends
5M: Bullish
30M: Bullish
1H: Bearish
4H: Bearish
D: Bullish
W: Bullish
Bitcoin has reclaimed a bullish 5M and 30M trend following an epic rally off of the lows. While the Hourly trend has yet to flip bullish, we have reclaimed the key moving averages of the 1H trend, and the dip to $94,000 looks like a liquidity grab before a move higher up. Key resistance at $95,900 - a break above would confirm just a test of the bottom of Bitcoin’s consolidation range and a pushback to $100,000.
Key Levels
Point of Control: $93,972
VWAP: $93,988
Value Area High: $94,848 - $95,675
Value Area Low: $92,301 - $93,127
Next Liquidity Zone Above: $$96,393 - $98,487
Next Liquidity Zone Below: $87,000 - $90,200
Strategy:
Continue to hold long positions. 30M chart shows a liquidity void was just tapped at $95,700, but our local Point of Control held before that. If this is a bottom, there’s no need to re-test support. It looks like they pushed the price back down to $94,000 to fill orders before letting the price send.
Let’s re-iterate a powerful metric: Bitcoin Balance on Exchanges. Currently, in January 2025, we have the lowest balance of Bitcoin on exchanges we’ve seen since January of 2019 - which was the bottom of the 2018/19 Bear Market.
Liquidity and the order books are thin when the Exchange Balance is very low. This means price is subject not only to wild price swings (which is why being careful with leverage here is crucial) but also sets up price for rapid price appreciation if a surge of fresh buying comes in.
However, the knife cuts both ways, as it also means less buy-side liquidity to absorb market sell orders.
However, on the positive side, we analyze how this metric has helped predict Bitcoin’s price movements, whether bullish or bearish. We notice that since 2019, prolonged periods of Bitcoin Balance declining have led to bullish price action, and it’s only once the Balance on Exchanges begins to rise again that it calls the Euphoria Phase of the Market Cycle - when prices increase rapidly.
Secondly, the long-term holder distribution of Bitcoin seems to have peaked and is currently declining - reaching peaks we’ve seen in previous cycles. In the 2017 market cycle, this metric peaked in August of 2017, when we saw a pullback in Bitcoin’s price from $4,000 to $3,600 - then we continued to rally to $19,000.
In 2021, this metric peaked in January, which saw Bitcoin’s price pullback from $40,000 to $32,000 - we then rallied to $63,000.
In 2024, this metric peaked on Dec. 10th, which has seen Bitcoin’s price pullback from $105,000 to $90,000 - we then rallied to ???,??? in 2025.
Here’s to a frothy future!
Crypto Market Update
Stablecoin Dominance
So far, a swat down from resistance and a decline of -2.17%. Buyers indeed stepped in, supporting Bitcoin’s price specifically and key altcoins. If this is the beginning of a rally, expect this metric to move as low as 5% again - but fair warning: a sustained close above 6% means a breakdown in risk on crypto assets.
Bitcoin + Stablecoin Dominance
It was an indecisive day for this metric, putting in a doji right below our 200 DMA. With altcoin buyers stepping in tentatively, this metric could go either way.
Altcoin Performance Relative to Bitcoin
Altcoin buyers have stepped in tentatively, as this metric has increased by 50 bps. This is the zone we should anticipate altcoins to bounce back - so I’m currently feeling optimistic about this metric rising following the deep deviation we had several weeks ago.
Bitcoin
Bitcoin put in an amazing rally from $91,000 to $95,000 overnight, printing more consecutive bullish hourly candles than we’ve seen since 2017.
Trends
5M: Bullish
30M: Bullish
1H: Bearish
4H: Bearish
D: Bullish
W: Bullish
Bitcoin has reclaimed a bullish 5M and 30M trend following an epic rally off of the lows. While the Hourly trend has yet to flip bullish, we have reclaimed the key moving averages of the 1H trend, and the dip to $94,000 looks like a liquidity grab before a move higher up. Key resistance at $95,900 - a break above would confirm just a test of the bottom of Bitcoin’s consolidation range and a pushback to $100,000.
Key Levels
Point of Control: $93,972
VWAP: $93,988
Value Area High: $94,848 - $95,675
Value Area Low: $92,301 - $93,127
Next Liquidity Zone Above: $$96,393 - $98,487
Next Liquidity Zone Below: $87,000 - $90,200
Strategy:
Continue to hold long positions. 30M chart shows a liquidity void was just tapped at $95,700, but our local Point of Control held before that. If this is a bottom, there’s no need to re-test support. It looks like they pushed the price back down to $94,000 to fill orders before letting the price send.
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