Welcome to this week’s analysis on which altcoins are performing well and which ones are not. You can view the list here:
Bitcoin Update
I see a lot of concerns that the top may be in or comments like “Why are we not making new all-time highs yet?” or “Why is this taking so long?”. Your concerns are valid in that this has been a very slow cycle which I’ll go into more detail why as we progress through this newsletter. To address the immediate concern with Bitcoin rejecting off its recent highs, I think this is par for the course before we continue higher. There are many examples where Bitcoin goes sideways for a few months before it firmly makes new all-time highs and continues higher. I think where we are in terms of this pattern is similar to October 2023 and November 2024. We are on the cusp of going a lot higher and it’s just a matter of being patient.
I think the main reason this cycle has been a lot slower than previous ones is that the US Manufacturing PMI from ISM has been under 50 now for over 2.5 years whereas in previous cycles, it’s only lasted 6 months to 1 year. In the February 10 newsletter, I covered this chart and the relationship I think still holds true where we need the US manufacturing PMI firmly above 50 for at least 2 months and then we will see the top in Gold and a parabolic run in Bitcoin. What could be causing these delays you might ask? If we look back at January-February 2020 where the PMI was recovering above 50 and then we had COVID, it shut down the economy after a recovery was imminent. This caused the PMI to cross under 50 again for a few months. I think we have some similarities here in that this cycle is being impacted by the hangover of the COVID stimulus plus the tariff fears introduced by the Trump administration. I don’t think it’s a new bear market or recession but just a delay of what was about to come next. Eventually though, the markets will prevail in doing what they desire and the data is still showing risk assets including Bitcoin and altcoins going higher after being subdued for such a long time.
We also have Global M2 which continues to trend higher and has a strong correlation to Bitcoin price:
Also cycles tend to repeat…
Well what about the bearish argument? I think any bearish price action will be short term and nothing major until later in the cycle after Bitcoin reaches its First Cycle Top (not too be confused with the Final Cycle Top). There is this indicator that is pointing to some local top being formed but it’s too early to say if it’s in or not. There have been instances in the past where this hovers around this threshold for weeks before a major drop down to around the 5 threshold (local low). This looks similar to May 2017 or November 2020 in terms of where we are in the cycle. This is just for awareness so no action recommended and just something I’m monitoring.
Dogecoin Gains – Altcoin Local Top
I shared on X an indicator I developed based on Da Prof’s indicator in TradingView:
I didn’t discover this until recently but it would have been very helpful in December when another altcoin local top presented itself. I have not found many other indicators that caught this so let’s see if it can continue this track record for future altcoin local tops. No data is showing an altcoin top is forming at the moment and Bitcoin is still looking good for more upside.
Solana Update
Solana is having a pullback with the rest of the market. I think it will either bounce here or go to 138 and bounce:
Solana vs. Bitcoin is still holding above this key support level after a successful bullish retest. I see Solana having another major outperformance run against Bitcoin especially after making new all-time highs.
Dogecoin Update
Dogecoin is also having a pullback and is now in the bull flag again. I think it will either bounce here or go to 0.168 and bounce:
Sui Update
Sui looks like it could retest 3.19 and if it doesn’t there then next support level would be 2.85. I highly doubt it goes any lower than that and then it becomes a formation of an inverse head & shoulders pattern which is still bullish:
Large Caps
For large caps, here’s the ones that stand out on a long term timeframe:
- XRP
- Sui
- Hyperliquid
We also have a new coin that joined the Large Cap list called Hyperliquid. This is a fairly new coin and just recently reached the 6-month price history that I look for in properly evaluating a coin. I would not buy at these current levels considering it’s making new all-time highs.
Pepe is consolidating and getting ready to go higher. It might go a bit lower to 0.00001 or 0.000009 before continuing higher.
Model Portfolio Update
The service I use to track the model portfolio seems to be undergoing maintenance so if I had to estimate the portfolio is roughly in 5-10% profits, not the 14% shown below.
I pointed out which coins are still in a decent buy zone so be sure to review those if you are still looking to allocate. However I think the buy zone is closing shortly now that Bitcoin is over $100,000. Altcoins will soon catch up.
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