Posted on

Altcoins Rally: What’s Next After The Breakout

Altcoins have witnessed a significant surge recently, with their collective market capitalization rising from $575 billion to $615 billion in just a few days – an increase of 7%. This momentum hints at the potential for further growth in the Altcoin sector.

Breakout From Descending Triangle

The Altcoin market capitalization had been trading within a descending triangle pattern since its yearly peak in April. This technical pattern, characterized by a series of lower highs but consistent lows, typically signals a bearish sentiment – suggesting that each rally is met with increasing selling pressure, keeping upward price movements in check.

Related Reading: November Outlook For Bitcoin Price: Another Pump Or Retrace?

However, this past weekend marked a pivotal change. The market capitalization decisively broke through the pattern’s upper resistance line, surging by 7%. Such a breakout from a descending triangle is a bullish pattern, often indicating a reversal of the prior downtrend. With this breakout, the market cap is now eyeing the target set by the initial peak of the pattern, which could mean an additional increase of 7%.

 

The significance of this breakout is further highlighted by the fact that the Altcoin market cap has not only broken through the resistance but also surpassed the previous high set in July. This breach could signal that the market is transitioning from a bear-dominated phase to a bullish one, where buyers are regaining control and pushing the market to new heights.

Bitcoin Decreasing Dominance

Bitcoin’s dominance on the market has recently slipped to 52.50%, down from its annual peak of 54%. This is a normal market fluctuation, considering Bitcoin had been on a ten-week streak of increasing dominance.

Related Reading: Bitcoin Season: Leading The Charge In The Crypto Market

Yet, it’s crucial to note that Bitcoin’s market share has dipped below the pivotal 53% support level. Should Bitcoin fail to reclaim dominance above this support level, we could anticipate a further decrease to the next support at 49%, opening the door for Altcoins to capture a greater portion of the cryptocurrency market cap.

In bear markets, Bitcoin’s dominance tends to increase as the market pulls back, which suggests that if Bitcoin manages to hold or increase its price, Altcoins could experience further rallies.

 

Conversely, an increase above the 53% support could set Bitcoin out for the next resistance at 58%, at the expense of Altcoins’ market share.

Historically, bull markets often begin with Bitcoin leading the way due to events like the halving event, which reduces the inflow of new Bitcoin.

Nonetheless, there are still phases when Altcoins rapidly gain momentum, experiencing significant and rapid price increases. The current market breakout, along with a reduction in Bitcoin’s dominance, hints that such a phase could potentially unfold now.

Top Altcoins Gains

In the past week, many Altcoins have witnessed remarkable gains. Here are the top performers:

  • Pancake Swap: +95%
  • Trust Wallet Token: +53%
  • Neo: +48%
  • MultiversX: +46%
  • Blur: +45%

Predycto is the author of a cryptocurrency newsletter. Sign up for free. Follow @Predycto on Twitter.

Posted on

Four Reasons Why Investors Are Bullish On Chainlink

Chainlink’s recent price surge of 63% has turned heads in the cryptocurrency community. This uptrend begs the question: what’s driving investor confidence in Chainlink? Let’s dive into four key reasons that might be contributing to this bullish trend.

#1 Chainlink Dominance In The Oracle Space

Oracles act as a bridge between blockchain networks and the external world, fetching data that decentralized applications (dApps) rely on to function. This data can vary widely, from cryptocurrency price feeds essential for decentralized financial (DeFi) platforms to weather information or the results of real-world events for betting platforms.

Related Reading: November Outlook For Bitcoin Price: Another Pump Or Retrace?

Chainlink has emerged as the leader in this pivotal market, capturing a 47% share with its extensive network of over 1,000 oracles and support for 14+ blockchain platforms. By positioning itself as the primary provider of external data integration, Chainlink has become an essential component of the blockchain infrastructure.

#2 Other Products By Chainlink

Expanding beyond its initial focus on data feeds, Chainlink now offers a broad spectrum of blockchain services that have significantly strengthened its market presence:

  • Verifiable Random Function (VRF) – a verifiable method of producing complete randomness at a low cost, particularly useful to create random outcomes within gaming and gambling applications, as well as for any application requiring unpredictability in its protocol.
  • Automation – allows smart contract developers to utilize Chainlink’s infrastructure to automate their smart contracts cost-effectively and securely, which is crucial for the scalability and efficiency of decentralized applications (dApps).
  • Cross-Chain Interoperability Protocol (CCIP) – enabling seamless interaction and transfer of data and value across blockchain networks. This interconnectivity is pivotal for a more integrated and accessible blockchain ecosystem.

The introduction of CCIP, especially, underscores Chainlink’s commitment to driving the industry forward. It simplifies the user experience and broadens the potential use cases for blockchain technology, aspects that are highly attractive to institutional investors looking to enter the space.

#3 Institutional Interest

Chainlink’s CCIP and other products have allowed it to collaborate with big institutions, such as:

  • SWIFT – a global financial network that 11,000+ financial institutions use to securely transmit information and value, up to trillions of dollars.
  • DTCC – a global financial entity that processes and settles security transactions totaling quadrillions of dollars.
  • ANZ – one of the big four banks in the Asia-Pacific region, handling billions of dollars annually.
  • Other notable institutions working with Chainlink are BNP Paribas, Citi, and PwC Germany.

These partnerships highlight that institutions see the potential opportunity for blockchains and real-world systems to interact effectively. Chainlink’s co-founder Sergey Nazarov says:

It’s now clear that both top global banks and leading market infrastructures believe there will be greater adoption of digital assets across the entire banking industry, and that this adoption will happen using multiple different blockchain technologies at the same time.

#4 Bullish Price Action

Chainlink had traded between $5 and $9 between June 2022 and September 2023. In October, its price finally managed to break out of this range after an increase of 63%, reaching $12. This price increase was one of the largest within the cryptocurrency market, highlighting the faith investors have in this token.

Related Reading: Bitcoin Season: Leading The Charge In The Crypto Market

The price currently sits in a previous trading range between $11 and $17. For the price to reach the top of this range, it would have to climb another 50%.

With its previous all-time highs of $53, it suggests there is still much room for Chainlink’s price to grow. Specifically, a 340% increase would have to occur for it to reach its previous highs.

Predycto is the author of a cryptocurrency newsletter. Sign up for free. Follow @Predycto on Twitter.

Posted on

November Outlook For Bitcoin Price: Another Pump Or Retrace?

November has often been a standout month for Bitcoin, with historical data indicating an impressive average price jump of 43%. This would propel Bitcoin to around $48,000. But with October already showing a significant price increase, the question arises: Will Bitcoin continue its bullish trend, or is a retrace on the horizon?

November Monthly Returns

November has been particularly bullish for Bitcoin over time, with an average of 43% of price increases over the years. If this trend holds true for this year, we might see Bitcoin touching $48,000.

Related Reading: Bitcoin Price To Reach $170,000 in 2025 – Mathematical Model Predicts

However, it’s worth noting that this very high average is significantly influenced by the extreme 453% surge in 2013. If we exclude this outlier, the average settles around 11.54% This leads to a more conservative forecast, pointing to a potential rise to around $38,000.

Diving deeper into historical data, 8 of the past 13 years have shown price increases in November, making another increase this month seem plausible. Yet, a closer look reveals that 4 of the last 5 times in November there was a price dip.

In 2022, the FTX collapse played a pivotal role and 2021 marked the peak for Bitcoin, suggesting that these decreases might be outliers rather than indicative of a changing trend.

For a closer comparison, 2019 stands out as it too was a pre-halving year, just like 2023. That year, after a promising October, Bitcoin saw a 17% dip in November, which would equate to a value of $28,000 if repeated this year.

Bitcoin Price Action In 2023

Through 2023, Bitcoin has demonstrated a recurring behavior following significant price increases of more than 20%. Typically, these surges have been followed by consolidation periods, and subsequently, a retrace to at least half of the initial increase.

Related Reading: Bitcoin Season: Leading The Charge In The Crypto Market

Take January, for instance. Bitcoin’s price increased from $16,500 to $24,000, only to decline to $20,000 by March – a retrace of 60% from the initial increase.

One particularly extreme example was in August when Bitcoin retraced the entirety of a prior 20% rise.

It’s noteworthy that these retraces haven’t always been immediate. After the rise in March, it wasn’t until June – a span of three months – that the price saw a 50% retrace. On average, this year’s price retraces have taken between 1 to 3 months to manifest post-rise.

Furthermore, before any retrace occurs, there’s still room for additional upside. To illustrate, after the aforementioned March rise, Bitcoin experienced an additional 10% increase before eventually retracing the initial surge.

Potential Scenarios For November
Using the above, potential scenarios for November are listed below:

  • Very bullish scenario: Bitcoin rises by 10-20%, potentially reaching up to $42,000.
  • Bullish scenario: Bitcoin rises by 1-10%, potentially reaching up to $38,000.
  • Bearish scenario: Bitcoin decreases by 10%, dropping to around $31,000. This would mean a 50% retrace of the surge in October.
  • Very bearish scenario: Bitcoin decreases by 20%, dropping to around $28,000. This would mean a 100% retrace of the surge in October.

In conclusion, given past trends and current market behavior, November promises to be a pivotal month for Bitcoin.

Predycto is the author of a cryptocurrency newsletter. Sign up for free. Follow @Predycto on Twitter.

Posted on

Bitcoin Season: Leading The Charge In The Crypto Market

Over the last month, Bitcoin’s price has seen a significant surge. Its price has increased by 30%, reaching a new yearly high of $35,000, 10% above its previous peak this year. Interestingly, while the growth of Bitcoin is clear to see, the broader cryptocurrency market hasn’t quite managed to keep up.

Altcoin Market Cap

The Altcoin market cap, which is the total cryptocurrency market cap excluding Bitcoin, has been trading within a descending triangle. This pattern, characterized by its lower highs and equal lows, often indicates a bearish trend in the market. This pattern suggests sellers are gradually overtaking buyers.

A breakout from such a pattern is typically seen as a bullish indicator, with the target being the first peak. In this case, the Altcoin market cap would potentially see another 15% increase, matching the yearly highs in April.

A similar pattern was seen in the previous cycle, where the Altcoin market cap was trading within a descending wedge. After the breakout, the Altcoin market cap saw an increase of 90%. Such historical trends show the importance of closely monitoring these patterns as potential indicators of market shifts.

Contrastingly, as the Altcoin market cap is forming lower highs, Bitcoin’s price is forming new yearly highs. This dynamic suggests that Bitcoin is gaining market share from the rest of the crypto market. This is often referred to as ‘Bitcoin Season’.

Bitcoin Season

Bitcoin’s market share is at 54%, which is the highest it has been in over two years.

The last time Bitcoin’s market share was at this level was during the bull market in 2021. As that year progressed, the asset began losing market share, as investors turned their attention to coins with lower capitalization, enticed by the prospect of higher returns.

Now the trend seems to be reversing. Investors are gravitating back towards Bitcoin, lured by its higher returns than the rest of the crypto market.

The next resistance is at 58%, so if Bitcoin breaches this mark, it stands to gain an additional 5% in market share.

Historical trends have shown that in the initial phases of bull markets, Bitcoin often takes charge, as it pushes on to create new all-time highs. This is typically driven through Bitcoin-centric narratives such as the halving which reduces the new supply of Bitcoin being mined. This year, heightened anticipation surrounds the potential approval of a Bitcoin ETF. If approved, it could pave the way for a wider range of investors to engage with the asset.

Standout Altcoins Performers

Even during the dominant ‘Bitcoin Season’, certain Altcoins have still managed to show even more impressive returns. Some notable ones are the following:

  • Injective: +74%
  • Solana: +68%
  • PEPE: +67%
  • RENDER: +45%
  • Chainlink: +45%

Predycto is the author of a cryptocurrency newsletter. Sign up for free. Follow @Predycto on Twitter.

Posted on

Best Time to Buy Ethereum Could Be Soon: Last Cycle Suggests

Ethereum has been in a descending channel against Bitcoin since August of last year, meaning Bitcoin has been the better investment over this time. However, historical trends show the tides could be changing soon, with Ethereum possibly on the brink of entering an accumulation phase.

Ethereum Price Action

Ethereum is trading at $1600, marking a 22% decrease from its price last August. Bitcoin, on the other hand, is 8% up over the same period.

This is a common trend that happens during bear markets. Coins with larger market capitalizations tend to be more resilient against price decreases as investors become more risk-averse and look to preserve their capital. While Ethereum isn’t short at a market capitalization of $187 billion, it’s still considerably lower than Bitcoin at $525 billion.

During bull markets, coins with lower market capitalization outperform Bitcoin again as investors lean towards assets with greater potential returns.

Ethereum Price Compared Against Bitcoin

When comparing ETH’s value to BTC, it’s evident that Ethereum has been trading within a descending channel since last August. This pattern, characterized by its lower highs and lower lows, often indicates a bearish trend in the market.

 

The chart above highlights three other distinct phases:

Accumulation phase: During this phase, price tends to stabilize, hinting at an upcoming change in momentum

Ascending channel: Here, the price experiences a significant reversal, often on a parabolic trajectory, characterized by highs and higher lows.

Distribution phase: In the final phase, the price ceases its upward movement. Investors typically use this phase to capitalize on their gains and liquidate their positions.

The accumulation phase is typically the best time for investors to convert their Bitcoin into Ethereum. This phase is marked by price holding on at the bottom and then showing signs of reversal. Ethereum is still forming lower lows against Bitcoin, so it has not entered the accumulation phase yet. However, the last cycle shows that this could be changing soon.

Last Cycle

Reflecting on the last cycle, Ethereum was in a descending channel against Bitcoin for 17 months. The accumulation phase then occurred from September 2019 up until February 2020. Based on the four-year theory, which suggests similar phases in the market occur every four years, this shows that the accumulation phase should also be approaching very soon in this cycle.

Yet, while the last cycle offers valuable insights, it’s important to note that no two cycles are the same. In the current cycle, ETH’s price action has not seen as much of a drop as in the previous cycle, which could be attributed to changing fundamentals and asset maturation.

Final thoughts

While an accumulation phase for Ethereum has not been confirmed yet, there remains the potential for its price to drop even further relative to Bitcoin. However, if the previous cycle is anything to go by, we could enter the accumulation phase soon. This phase typically presents prime buying opportunities for Ethereum.

Investment Disclaimer: The content provided in this article is for informational and educational purposes only. It should not be considered investment advice. Please consult a financial advisor before making any investment decisions. Trading and investing involve substantial financial risk. Past performance is not indicative of future results. No content on this site is a recommendation or solicitation to buy or sell securities or cryptocurrencies.

Predycto is the author of a cryptocurrency newsletter. Sign up for free. Follow @Predycto on Twitter.

Posted on

Bitcoin Price Action in October: A Probabilistic Overview

October has traditionally been a pivotal moment for Bitcoin’s price action. Historical data shows an enticing average price increase of 17% for the month (excluding the early, volatile years of Bitcoin). In pre-halving years, this average price fluctuation is slightly higher, around 21%.

If the same price change occurs in 2023, Bitcoin could reach somewhere between $32,000 and $33,000 in October. But will this month follow the historical trend, or is a bearish turn still possible?

October Over Time

October has been particularly bullish for Bitcoin, with an average of 17% of price increases over the years. Since 2023 is a pre-halving year, comparisons with other pre-halving years are particularly insightful.  In the pre-halving years of 2019 and 2015, the average price increase was 20%.

In 13 years of Bitcoin price action, 9 have seen increases during October. This makes another bullish October seem quite likely.

Interestingly, September, known for its bearish tendencies, has broken its pattern this year, with Bitcoin’s price seeing a 5% increase. This is the first instance of such a deviation in over 7 years. This anomaly prompts the question: could October’s price action also diverge from the historical pattern?

Bitcoin Price Action In Pre-halving Years

Another important caveat to consider is that during pre-halving years, Bitcoin’s price tends to exhibit a predictable pattern where there are 5-6 months when the price decreases. However, 2023 has been an outlier so far, with only three red months observed currently:

This unexpected deviation could prompt a re-evaluation of what the remaining months of 2023 may hold for Bitcoin. To see the usual six months of price decreases, every month remaining in the calendar year would need to show a reduction.

Bitcoin In 2019:

Examining Bitcoin’s price movements in Q4 of 2019 can offer a comparative perspective.

 

Q4 2019 showed significant retracements in Bitcoin’s price, as it decreased by 20% from the beginning of October until the end of the year. If we witness similar price movements this year, it will lead to Bitcoin reaching below $22,000, presenting potential opportunities and risks for investors.

A Broader Impact

Bitcoin’s price movements serve as an indicator of the broader cryptocurrency market. A bearish trend in Bitcoin could potentially lead to a market-wide downturn, causing an even bigger downturn for Altcoins and coins with low market capitalization.

Conclusion

While October is usually bullish, the anomalies witnessed in 2023 should lead to a more cautious approach to expectations during October. The absence of a bearish September provokes questions about the likelihood of experiencing a bullish October. While history provides guidance, it’s essential to remember it doesn’t dictate the future, and varying factors can alter market behaviors significantly.

Predycto is the author of a cryptocurrency newsletter. Sign up for free. Follow @Predycto on Twitter.

Posted on

Bitcoin Price To Reach $170,000 in 2025 – Mathematical Model Predicts

The Bitcoin price is trading at $27,100 at the time of writing, marking a 60% decline from its all-time high of $69,000 in 2021. As the anticipation for the next bull market builds, questions arise regarding Bitcoin’s potential future prices.

While most predictions are speculative, one analyst has devised a model leveraging historical data to forecast potential tops and bottoms in Bitcoin’s price over time.

Bitcoin Price In Previous Cycles

Since its inception, Bitcoin has demonstrated remarkable growth, rewarding early long-term investors substantially. This price growth is observable in measuring Bitcoin’s prices from the lows to the highs and between the highs of successive bull markets.

In 2011, the peak was $33, followed by a peak of $1240 in 2013, reflecting a 3800% increase between peaks. The subsequent peaks in 2017 and 2021 were $20,000 and $69,000, representing increases of 1,600% and 350%, respectively. Comparable levels of increase are also observed when examining the lows of different cycles.

Notably, the relative growth between cycles has diminished, possibly due to the increase in Bitcoin’s market capitalization, requiring more substantial capital to influence its price. This diminishing growth aligns with a mathematical pattern known as logarithmic regression.

Logarithmic Regression

An analyst has devised various logarithmic curves on the Bitcoin chart to forecast Bitcoin’s potential tops and bottoms, utilizing time as the only input. Such models can help investors by offering a straightforward way to see potential market trends and make proactive plans in the unpredictable world of cryptocurrency.

Bitcoin’s tops and bottoms typically manifest every four years, enabling the prediction of potential Bitcoin prices in upcoming cycles based on the logarithmic regression model.

Bitcoin Price Projections

  • 2025-2026: Bitcoin price may peak in the third or fourth quarter of 2025 between $190,000-$200,000, before bottoming out around $70,000 the following year.
  • 2029-2030: Bitcoin price may reach a top of $420,000 to $440,000 and bottom out the following year at around $230,000.
  • 2033-2034: Bitcoin price may peak between $750,000-$800,000 and bottom out around $700,000 the following year.

By the late 2030s, the model begins to break down as predicted tops start falling below the predicted bottoms, potentially indicating a stabilization in Bitcoin’s price post its peak of $750,000-$800,000

Final thoughts

While models like this offer insightful projections of Bitcoin’s potential future prices, it’s important to acknowledge their limitations and the need for periodic updates with fresh data points. Numerous external factors, including but not limited to regulatory changes, technological advancements, and macroeconomic conditions, could significantly impact the model’s accuracy.

Moreover, the unprecedented nature of Bitcoin’s trajectory, having never endured a recessionary environment, implies a potential susceptibility to more substantial crashes than models might predict. Predictions should be cautiously considered with broader market analyses and trends as with any financial model.

Predycto is the author of a cryptocurrency newsletter. Sign up for free. Follow @Predycto on Twitter.

Posted on

Next Bitcoin Peak: Why It Could Still Be 2 Years Away

Bitcoin’s last all-time high was $69,000 in November 2021; as of September 2023, it’s been 22 months since that peak. While estimating what price Bitcoin could reach next can be very useful, it’s also important to estimate when a new peak could occur.

History suggests this may still be some time away, as analysis shows that the next Bitcoin peak could arise around the end of 2025.

Previous Cycles

A specific pattern seems to occur when looking at previous tops and bottoms. The three previous bottoms, January 2015, December 2018, and November 2022, were all exactly 47 months apart. Similarly, the previous three tops, November 2013, December 2017, and November 2021, are either 49 or 47 months apart.

Market participants could anticipate the next Bitcoin peak around October-December 2025 if this pattern persists. The subsequent bottom could then occur around October 2026.

This phenomenon of tops and bottoms forming cyclically is a widely held belief in investing. Both stock markets and economies are believed to experience periods of expansion, marked by increased economic activity and rising stock market prices, and contraction, during which the stock market prices decline, and economic growth slows.

What’s particularly interesting about Bitcoin is its consistent pattern of forming its tops and bottoms roughly every four years. The ‘halving theory’ is a popular explanation for this observed pattern.

The Halving Theory

Approximately every four years, Bitcoin undergoes a ‘halving’ event, during which the reward for mining new blocks (i.e. the new supply of Bitcoin) is halved. This mechanism ensures the scarcity of Bitcoin, which is capped at a maximum supply of 21 million coins. A simple economic principle suggests that prices rise when supply drops while demand stays constant or grows.

Historically, Bitcoin has reached a new peak a year after each halving. Given that the next halving is projected to be in April 2024, it aligns with the chart above, showing the next Bitcoin peak to be around the end of 2025.

Next Bitcoin Peak – Will This Time Be Different?

While historical data points provide valuable insights into the potential future performance of an asset, it’s crucial to understand that history does not always exactly repeat itself – it often rhymes. This suggests that while certain patterns from the past might re-emerge, they don’t necessarily play out in the same way.

Various factors, such as technological advances, macroeconomic conditions, and regulatory changes, can introduce differences.

In the current market scenario, Bitcoin is navigating through a high-inflation and high-interest-rate environment for the first time. These conditions can lower market liquidity as investors might have reduced capital available for investment.

Additionally, faced with such an environment, many investors could turn to savings or bonds, which may present more attractive and stable returns than other assets.

Predycto is the author of a cryptocurrency newsletter. Sign up for free. Follow @Predycto on Twitter.