Does The IOTA Chart Tell Us We're Near An Alt Cycle?
Updated
I made a recent post about my good calls and bad calls, but I want to highlight another one of my bad calls: That the alt market would boom and take more of Bitcoin's dominance. The majority of the market actually expected this, but it has not happened. In fact, Bitcoin dominance has been increasing since it broke out.
What's interesting is that even the alts that look very bearish against Bitcoin look pretty bullish on their USD charts. Take my recent XLM post for example, or even Ethereum. This analysis is not necessarily a trade setup (although IOTA could easily double up from here if it reverses). I'm just looking at the fact that IOTA, being one of the worst performers recently, is inching closer to its historical bottom. it also broke out of its logarithmic downtrend and retested it as support. WTC did the same thing before doubling up on its Bitcoin ratio. If you look at the first bottom (green circle 1), there was a massive capitulation wick before it went on its run. It's possible this will happen again with a number of altcoins very soon, so people likely have some very low buy orders set. Some coins will not have these sorts of wicks, so it's really a gamble, if you believe we will have another altcoin cycle.
As I've been mentioning in recent analyses, if big/mid-cap altcoins do not show signs of life soon, the market will not be playing out how I thought it would (or many thought it would). I think it would actually increase the likelihood that Bitcoin would drop, since people will start questioning the validity of the space. NANO continues to do relatively well, but that's also because people see it as a possible alternative to Bitcoin. However, there's no reason to panic yet, since the USD prices of most alts look healthy.
I'm VERY interested to see how this plays out. If it occurs like prior cycles, selling alts right now would be selling them close to potential bottoms of their cycles against Bitcoin. Traders will be traders, and indicators are showing that a lot of these coins are at strong buying levels. However, the lack of any bounces so far is concerning. In that case, there could be some downside for some, but I'm going to wait and see what happens. Fundamentally, there doesn't seem to be a reason for some well-supported altcoins to never recover. There is a possibility that Bitcoin will just completely take over, but I'd find that hard to believe, given the advancements many altcoins have over Bitcoin. Bitcoin will remain a somewhat decent payment method and a solid store of value either way. Regardless, I'm happy with my long term entries. If I'm wrong, I'm wrong.
This is NOT financial advice.
-Victor Cobra
What's interesting is that even the alts that look very bearish against Bitcoin look pretty bullish on their USD charts. Take my recent XLM post for example, or even Ethereum. This analysis is not necessarily a trade setup (although IOTA could easily double up from here if it reverses). I'm just looking at the fact that IOTA, being one of the worst performers recently, is inching closer to its historical bottom. it also broke out of its logarithmic downtrend and retested it as support. WTC did the same thing before doubling up on its Bitcoin ratio. If you look at the first bottom (green circle 1), there was a massive capitulation wick before it went on its run. It's possible this will happen again with a number of altcoins very soon, so people likely have some very low buy orders set. Some coins will not have these sorts of wicks, so it's really a gamble, if you believe we will have another altcoin cycle.
As I've been mentioning in recent analyses, if big/mid-cap altcoins do not show signs of life soon, the market will not be playing out how I thought it would (or many thought it would). I think it would actually increase the likelihood that Bitcoin would drop, since people will start questioning the validity of the space. NANO continues to do relatively well, but that's also because people see it as a possible alternative to Bitcoin. However, there's no reason to panic yet, since the USD prices of most alts look healthy.
I'm VERY interested to see how this plays out. If it occurs like prior cycles, selling alts right now would be selling them close to potential bottoms of their cycles against Bitcoin. Traders will be traders, and indicators are showing that a lot of these coins are at strong buying levels. However, the lack of any bounces so far is concerning. In that case, there could be some downside for some, but I'm going to wait and see what happens. Fundamentally, there doesn't seem to be a reason for some well-supported altcoins to never recover. There is a possibility that Bitcoin will just completely take over, but I'd find that hard to believe, given the advancements many altcoins have over Bitcoin. Bitcoin will remain a somewhat decent payment method and a solid store of value either way. Regardless, I'm happy with my long term entries. If I'm wrong, I'm wrong.
This is NOT financial advice.
-Victor Cobra
Note
Wow, IOTA managed to get back BELOW its downtrend, though the rejection at 4400 was decently strong. We need to get back above ASAP, or it’ll confirm that the altcoin market is extremely weak.Note
If we do happen to see some strong buying at these levels, I’ll be able to breathe agai. :)Note
We had a nice buying candle today, but not enough (yet) to push us back above support. The bear trap idea is still in play, as long as Bitcoin doesn’t drop too much more. The only bullish scenario I’m seeing is if alts can start pumping back on their ratios if Bitcoin proves it can be stable at these levels I think people are getting out of alts, afraid of a big bitcoin drop....but if it doesn’t come, people will probably start to scale back in.Note
As you can see, we're clearly in the final buying zone for IOTA. We had a nice green doji candle that took us briefly back to 5200 on high volume. Looking at the chart, we can see that the volume on this bounce was greater than the recent sell volume. If IOTA is to make a bigger bounce, I'd like to see another big buying candle appear over the next day or two, to take us back above the triangle resistance. Note
We just recently bounced off the long term trendline for the altcoin market cap. If this is going to continue as a healthy recovery, I'd like to see it hold. Otherwise, the bear market may only be halfway over for most alts. Alts NEED to hold current price levels, or we risk losing the long term trend. Note
And there you have it, folks! The first sign of a reversal in IOTA. We're back above our downtrend. I posted earlier today: " If IOTA is to make a bigger bounce, I'd like to see another big buying candle appear over the next day or two, to take us back above the triangle resistance." If I were trading this would be the confirmation to go long. In an ideal world, I'd like this to be the start of our alt season. If so, we should assume that money will start pouring back into other altcoins, since Bitcoin hasn't dropped much. Note
If, however, IOTA pumps on its own, it will still be a sign of weakness, as it would mean it's just an oversold bounce, rather than a reversal. If we're using IOTA as a bellwether, we'd need to watch for these signals.Note
So far, IOTA is on its own, and other alts are even drifting a bit lower on their ratios. As I said, for this to really be a bullish crypto signal, other altcoins will need to follow suit. Recently, it's only been one or two coins pumping at once. it used to be that the whole alt market would do well, but now there seems to be much less interest in the market. If several major alts can pump together along with IOTA, my confidence in the market will be restored.Note
I will post an update (new analysis) when we see the reaction from the rest of the market. I'd still give it some hours to sink in. If we are on the verge of an alt cycle, money should start flowing into coins little by little. I wouldn't be worried about a fakeout unless IOTA retraces this whole pump and breaks back below 5000.Note
Looking at it today, things are substantially worse. IOTA pumped, yes...but most other alts are still sliding lower and lower. NEO made a pump attempt today, but it hasn't sustained very well so far. Either this is a real test of patience (trying to get people to sell), or we're about to see a really big bloodbath.Note
As the day progresses, some alts, including ETH and NEO, are starting to show signs of life. I guess we’ll see what happens.
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