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
Finally, something different to update this week (sort of). One of the scenarios I outlined of Bitcoin potentially falling to the 85k area occurred. Bitcoin had a massive move to the downside and touched $78,000 and since had this V-shaped recovery. This bounce occurred near the 200 day SMA of $82,400 which tends to be a bull market support level. It’s still hard to say if the bottom is in since we are still in this same range even after this recent bounce. With such a quick bounce based on the news event of Trump saying he would have Bitcoin and certain altcoins in a strategic reserve, I am skeptical that this will hold up. I will tell you why with a couple new indicators I developed.
I shared this on X and this indicator measures when altcoin pivots occur. I’ve tried looking at other indicators for this and either they were too lagging (you find out it’s alt season before it’s too late) or they are very subjective. This is the best measurable indicator I’ve seen and I’m happy with the results. This looks over a 2-week period for Bitcoin price down, Bitcoin Dominance down at least 1 and OTHERS Dominance up at least 1.4. This aligns with what I mentioned in my February 17 newsletter where we look for a Bitcoin correction that results in Bitcoin Dominance going down and OTHERS Dominance going up for an altcoin pivot. This indicates the market is rotating out of Bitcoin and putting more capital into altcoins in general which occurred in the following months:
- March 2017
- January 2018 (false positive near cycle top)
- January 2021
- August 2021
- August 2023
As you can see with this recent downside move, we still haven’t had an altcoin pivot according to this indicator. I am still waiting for this data to trigger to have more confidence that we have switched over to alt season.
Another indicator I developed called the Bitcoin Realized Profit/Loss Address ratio looks at the number of Bitcoin addresses with realized profit and divides this by the number of Bitcoin addresses with realized losses. This has done fairly well with identifying cycle bottoms, mid cycle local bottoms, late cycle local tops and the cycle top. Let’s break down each of these:
- Cycle bottom: After Bitcoin puts in its cycle top and when this indicator crosses below the 1.08 level, this tends to mark the cycle bottom and a major buying opportunity.
- Mid cycle local bottom: After the Bitcoin halving date, this indicator starts to use the 4.83 level as support and identifies local bottoms.
- Local top: After the Bitcoin halving date, this indicator starts to use 50.67 level as resistance and identifies local tops.
- Cycle top: After the Bitcoin halving date and within a 1-year period, this indicator crosses the 50.67 level five times
Most recently, this indicator has crossed the 50.67 level twice so if history repeats, we have three more crosses until a potential cycle top is in. Also since this was recently at the 50.67 level in late January, it’s possible we still have more downside to go and cross the 4.83 level again marking another local bottom. This would also align with the theory that we need another Bitcoin correction before an altcoin pivot occurs.
Bitcoin Dominance Update
Bitcoin Dominance fell quite a bit in the last few days but has started rallying again. It could end up going higher to 62% and possibly even 67%. Since this has been a more subjective measure for an altcoin pivot, I am going to cover this chart less to avoid it becoming “noise”. Now that we have the new Altcoin Pivot Indicator I developed, this is a much better chart to monitor an altcoin pivot instead of Bitcoin Dominance alone. My goal is to eliminate as much noise from the data as possible and only show charts that are worth showing when the time is right. Also I’m sure you’re tired of others claiming alt season has started a few months ago in November 2024 or perhaps earlier. As we have witnessed recently with the performance of altcoins, it’s pretty difficult to make that claim especially with many altcoins revisiting their August 2024 lows when the last major rally with Bitcoin occurred.
OTHERS Dominance Update
It’s been a while since we looked at how OTHERS Dominance is doing which measures the percent of the altcoin market cap (excluding the top 10) out of the total crypto market cap. When this value goes up, mid cap and small cap altcoins tend to perform well. It has been mostly going sideways lately which I believe to be a good thing and indicates a strong chance a bottom is forming. Plus we are still in the green zone for the z-scores indicating a lot more upside to come. Patience is the key here and I think it’s about to pay off soon.
Solana Update
Solana dipped below the 138 level as I mentioned as a possible scenario and had a huge bounce up to 179. We are still in this descending channel so until we break above this, expect more downside or sideways price action. This is probably what most people don’t want to hear but I’m trying to give it to you straight based on the data.
Let’s also take a look at Solana vs. Bitcoin:
It broke below it’s multi-month range but bounced pretty hard. I think we could see this range for a bit longer but as long as it’s staying above that recent low, I expect more outperformance from Solana in the coming months.
Even with all this recent underperformance from Solana, it is still outperforming Ethereum:
Dogecoin Update
Price had a nice bounce off this trendline and held above 0.20. The bull flag is still intact and Dogecoin is looking great for more upside in the coming months.
I have been working on refining the DOGE Pi Cycle High and Low indicator after I recently believed it triggered a false positive. After doing more testing, I am happy to share this updated version which looks even more accurate in terms of identifying the major lows and highs but also identifying the first and second tops from the previous cycles. The previous version was only able to identify the first tops so a huge improvement. Let’s see how this new version plays out.
Sui Update
Sui is important enough now that I think it warrants its own section. It continues to go sideways but has been holding up really well.
Sui continues to outperform Solana since August 2024. Even with this recent market correction, it continues to outperform:
Large Caps
For large caps, here’s the ones that stand out on a long term timeframe:
- XRP
- Stellar
- Hedera
Here’s the ones that stand out on a short term timeframe:
- Hedera
- TRON
- XRP
I think other coins like Sui or Dogecoin will have a better risk-to-reward at this point.
Pepe still bouncing in this range. I would continue to add at these levels while you can:
Model Portfolio Update
The model portfolio is now up nearly 5% as the market continues sideways:
To see the detailed analysis on Mid Caps and Small Caps as well as the complete portfolio, sign up and become a pro today and gain an edge in the crypto market.
I can’t stress enough the importance of risk management which is why having your portfolio 50-70% in Large Caps helps to balance the volatility of other smaller assets. Mid Caps should be 20-30% and Small Caps less than 10%. Although many positions are in losses, the overall portfolio is still in profit even with all the recent downside we’ve seen.
Not financial advice. Please consult a financial advisor before making any investment decisions.
