Welcome to this week’s analysis on which altcoins are performing well and which ones are not. You can view the list here:
Macro Update
Many are concerned about this recent escalation with Iran. My focus will be just to look at how this could impact markets and I have no bias for either side of the conflict. I will try to keep this brief and focus as much as possible on what the data is telling us. I looked at all major geopolitical conflicts (whether it’s war, major political uncertainty, etc.) and calculated the forward returns for the S&P 500 on multiple timeframes. This data set starts at 1940 around World War 2. I took the SPX open date that was closest to the conflict start date and compared this with the timeframe closing price. The precision here is not hugely important in my opinion but rather when you look at a longer time horizon, the bearish impacts of the conflicts on markets start to diminish.
In case that data looks too small, here’s the summarized version:
What this is telling us is that the short term is more or less flat for the markets, leaning slightly negative but not by a huge amount. Then the longer the timeframe, the data shifts more bullish and with 12-month returns, the mean gets closer to the annual average for the S&P 500 since its inception. The 12-month returns are positive 74% of the time with an average gain of nearly 9%. But what if this could be World War 3 or the end of the world? Let’s take a look at the conflicts that led to the biggest drawdowns (-10% or worse in 12 months):
Let’s look at the similarities and differences between these past events versus today. The key thing to understand is that these conflicts that preceded large drawdowns already had weak economic conditions in place which is in contrast to today’s environment:
And here’s the differences with a conclusion:
And then finally, here’s the data on conflicts as it relates to Bitcoin returns. Since Bitcoin has a much shorter history than the S&P 500, we don’t have as many data points:
Similar to the S&P 500, the first 3 months are rocky but then improves dramatically with the 6-month and 12-month timeframes. Long story short is any sharp drops in the short term is a buying opportunity in case you missed buying between March and May when I shared the numerous buy signals that triggered.
Bitcoin Update
I know I’m sounding like a broken record at this point but not much has really changed. We did drop a bit more to 98k and bounced. I still think we go a lot higher as we have done with past consolidation periods.
Solana Update
Solana is still following Bitcoin and I expect it to go higher once Bitcoin goes higher too. This spot or 120 is a good buying level.
Solana vs. Bitcoin looks like it could be doing a double bottom and going higher.
Dogecoin Update
Since Bitcoin dropped, Dogecoin lost the 0.168 level. It might touch the 0.137 level again as we have seen in the past Dogecoin tends to form a local bottom after touching the same level three times. This is still a good buying area regardless.
Sui Update
Sui lost the support level of 2.85 and I informed Pro members that 2.35 was likely coming next. Whoever bought that dip got a great price.
Large Caps
For large caps, here’s the ones that stand out on a long term timeframe:
- XRP
- TRON
- Hyperliquid
Pepe has bounced with the rest of the market so could be set to go higher from here.
Model Portfolio Update
The service I use to track the model portfolio seems to still be undergoing maintenance so I will start looking for an alternative solution to track the portfolio.
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.
To see the detailed analysis on Mid Caps and Small Cap sector outperformers as well as the complete portfolio, sign up and become a pro today and gain an edge in the crypto market.
