Bitcoin (BTCUSD) (Weekly)
Bitcoin had a nice move up this morning on news of Tesla, Inc. (NASDAQ: TSLA) allocating almost 10% of their balance sheet, or $1.5 Billion, into the digital asset. A high time frame close above the $45,200 level should be the confirmation bulls want for continuation, but the chance of a retrace in the near future is still very much on the table.
Beyond the charts, large-scale accumulation is being seen daily, with high net-worth individuals and institutions buying up more than the daily supply of mined bitcoin for some months now. We’ve seen less harsh pullbacks compared with bull markets of the past; retraces of 15-20% rather than the 30-40% ones seen in past cycles.
It seems likely that the predictable cycles we’ve been able to rely on until now may no longer apply. The fundamental aspect of spot-market demand from major players is an entirely new variable to the space and should provide seriously reduced sell-side liquidity across the markets. Whether we see a retrace in the immediate future or not, one thing is clear: a lot more people in the world are interested in Bitcoin and cryptocurrency as a whole than ever seen before.
Ethereum (ETHUSD) (Weekly)
Ethereum saw a breakout from its previous all-time-high with confirmation on higher time frame closes. This asset is a leading indicator for alt markets as a whole, and it is undoubtedly bullish at this time. Recent moves on cryptocurrencies like DOGE and AAVE should be expected on many altcoins during this cycle. Bitcoin is taking the stage this morning, but the overall conditions in the short term point to greater upside potential in altcoin markets.
Fundamentals & Correlations
Even as Bitcoin bulls continue to push, Bitcoin dominance (BTC.D) has broken through a support level, indicating capital flowing into altcoins. We still aren’t quite at “alt season” levels of less than 51%, but that could happen soon. The US Dollar Currency Index (DXY) remains relatively unchanged from last week; it still displays the classical “double top” on the monthly chart, with a weak reversal late last week on lower timeframes.