Cryptocurrencies Keep Outperforming

April 27, 2023

Cryptocurrencies: Weekly Update

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The cryptocurrency market has seen an uptick in volatility lately which has resulted in a bit of selling pressure across most coins, but there is no need to panic. The beginning of April went relatively well for most cryptocurrencies after Bitcoin rallied and closed above the $30,000 level for the first time in nearly a year.

In the past week or so Bitcoin has retraced from its new 2023 highs and is now sitting around $29,300, making the coin slightly positive month-to-date. Given the fact that all of the major stock market indices such as the S&P500 and Nasdaq100 are currently in the red since the beginning of April, it is safe to say that cryptocurrencies are still outperforming all other equities on a relative basis in 2023.

Bitcoin is still up more than 70% year-to-date, and the rest of the cryptocurrency market is up over 35% over the same span. In case you haven’t noticed, Bitcoin is in a healthy uptrend and looks to continue in that direction.

BTC has continued to make a series of higher highs since the beginning of the year, establishing a fresh uptrend back in February after closing above the $24,300 resistance level. There is a clearly established ascending trading range for Bitcoin, which happens to see the bottom of its range line up almost perfectly with the 50-day MA (blue) in the chart above.

As things currently stand the 50-day MA is the make-or-break level for Bitcoin until the $30,000 - 30,500 area can be defeated. In the event that Bitcoin’s price breaks below the 50-day moving average, you can expect a potential dip to the $24,300 support area to flush out longs, which may even provide a good buying opportunity.

Our RealMotion indicator had been showing a bearish divergence in momentum for the past week, but that looks to have reversed with both price and momentum back in bullish territory for Bitcoin at the moment. If this holds up, we could see another explosive breakout to higher highs.

When it comes to the other altcoins nothing seems to be keeping up with the biggest coin of them all, with Bitcoin continuing to increase in its dominance of the overall cryptocurrency market cap.

Rather than rejecting the 48% dominance level like Bitcoin has done twice in the past, it looks to be surging higher. This may indicate that BTC could continue outperforming the rest of the crypto market as global adoption continues to increase.

This past week saw the European Union approve the world’s first comprehensive crypto industry regulation framework which is called the European Union Markets in Crypto Act (MiCA). This means that a large swath of Europe will have regulatory clarity regarding what they can and can’t do within the crypto space, which is essentially a first when it comes to large-scale adoption of crypto in the developed world.

It also looks like the US crypto sphere may get some regulatory clarity soon too, with active efforts being made to have Gary Gensler removed as the Chairman of the SEC. This could only be a net positive when it comes to the long-term regulation and adoption of cryptocurrencies and blockchain technologies in the US.

Hong Kong has also recognized cryptocurrencies and other digital assets as property this past week, meaning that they will fall under the same rules and regulations as stocks do.

All around the world, the engine of cryptocurrency adoption continues to grind on regardless of what price is doing, but right now that adoption is pushing Bitcoin higher and higher. If you want to see proof of how seriously the world is starting to take the crypto industry, take a look at this CBDC Tracker that displays in real-time all the countries around the world that are actively developing their own digital currencies or other blockchain-based projects.

The Atlantic Council Geoeconomics Center shows that “114 countries representing over 95 percent of global GDP, are exploring a CBDC (Central Bank Digital Currency).” Further, over 11 countries have already fully launched their own forms of digital currencies, with the largest and most famous being China’s digital Yuan which is already seeing massive domestic adoption thanks to the Chinese government.

Regardless of whether or not the US manages to properly regulate and adopt cryptocurrencies, the rest of the world will continue to embrace the technology which will continue to make Bitcoin more valuable as time goes on. Whether you’re trading in the short-term or buying the dips for your long-term holdings, right now may be the last time for a long time that we’re able to buy BTC below $30k.

While our CryptoPulse Quant has been in full Bitcoin and Ethereum positions since the end of March, the CryptoPulse Sprint strategy has only generated 1 new trade in the month of April.

The past month has had its exciting moments with Bitcoin temporarily reclaiming the $30,000 level, but all-in-all the cryptocurrency market has remained relatively quiet. The largest Bitcoin rally this month was only about an 11% move in the second week of April, leaving very little opportunity to trade and lock in profits for our Sprint BTC strategy.

While we know it can be slightly frustrating to be sidelined in cash when BTC has done so well so far this year, it is also important to remember that our system is only looking to identify and trade the very best opportunities in the cryptocurrency market.

This leads to our next CryptoPulse Sprint product which will include a basket of 6 new altcoin strategies that will generate discretionary trading opportunities based on the same mechanisms that drive the Sprint BTC strategy.

We will be offering trade alerts for Ethereum, Cardano, Dogecoin, Solana, Avalanche, and Chainlink strategies that will alert you whenever any one of the coins is showing major signs of improving strength and momentum. This will allow for far more trade opportunities for the active traders out there that want a bit more activity.

The new basket of CryptoPulse Sprint trading strategies will be available to new and existing CryptoPulse users in the coming weeks, so keep an eye out for news and alerts from us!

Another new feature that will be available for our CryptoPulse users is our new and extended list of top cryptocurrencies ranked by our Trend Strength Indicator (TSI).

The new radar now shows the top 50 coins by market cap, as well as a category to show you the rolling 7-day change in each coin's Trend Strength relative to the rest of the list. This feature will be available in the CryptoPulse product portal under the Dashboard dropdown by the end of this week!

Good luck with your trading, and prepare for more crypto volatility in the weeks to come.

 

If you’re not yet subscribed to either our CryptoPulse Quant model or the new CryptoPulse Sprint trading strategy and would like to learn more about our products then you can talk to our Chief Strategy Consultant, Rob Quinn, here.