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
As of writing, Bitcoin has gone up from the lows of last week around $108,000 and is now sitting around $125,000. Is there more upside to come or is it tapped out? Here’s the topics we’ll cover:
- Short Term Outlook
- September Follow-Through Effect
- October Seasonality Edge
- Short-Term Holder Spent Output Profit Ratio (SOPR)
- Long Term Outlook
- US PMI vs. US Citi Earnings Revisions
- US PMI vs. Sweden PMI
- US PMI vs. Global M2 YoY % Change
- Are We in an AI Bubble or an AI Industrial Revolution?
September Follow-Through Effect
When Bitcoin finishes September in the green, the following Q4 performance has historically been strong:
- October–December has positive returns 3 out of 4 times.
- Exception: In 2024, October & November were positive but December turned negative
The returns are not only positive but on the higher side relative to the rest of the year.
Source: Coinglass
October Seasonality Edge
Over the last 10 years, Bitcoin’s October low has typically occurred early in the month:
- By Oct 10 → 60% of the time the low is in
- By Oct 12 → 90% of the time the low is in
Implication: Downside risk clusters in the first half of October, while mid-to-late October historically trends higher.
Short-Term Holder Spent Output Profit Ratio (SOPR)
SOPR (Spent Output Profit Ratio) for short-term holders just hit oversold levels and has rebounded above support.
Historically, this marks local bottoms and provides fuel for relief rallies.
US PMI vs. US Citi Earnings Revisions
The latest data is available from US Citi Earnings Revisions and it came in a bit lower but nonetheless, the trend still suggests PMI is going higher through end of the year:
US PMI vs. Sweden PMI
As we covered in a previous newsletter, Sweden historically has been a lead indicator for the US PMI because it’s a export-oriented economy that’s more sensitive to the business cycle. It continues to inch higher:
US PMI vs. Global M2 YoY % Change
Then we have one of my favorite go-to charts explaining the high likelihood of an extended cycle. This still suggests PMI is going higher through Q4 but then a bit of a slowdown in Q1 2026. This aligns with my outlook that I think Bitcoin along with altcoins has a strong rally into year end (roughly $145-150k) but then a correction in Q1 2026 with the possibility of another leg up to around $200k.
Are We in an AI Bubble or an AI Industrial Revolution?
One hot topic lately that the bears keep bringing up is that we are in an AI bubble and that Nvidia is like the next Cisco from the dot com bubble. This could not be further from the truth. Just because the price is going parabolic does not necessarily mean it’s a bubble that’s about to pop. As I covered in a previous newsletter, the economic backdrop of today is most similar to the early 1990s when the internet and the early adoption of the PC was taking place. Back then it was similar to today’s conditions of “stocks going higher but bad vibes” because there was a jobless recovery in place where profit margins for companies were increasing but jobs were not. It’s hard to say what the future job market will look like because either human jobs are getting removed from the economy entirely or there will be new jobs created that we aren’t able to conceive of yet. Anyways, as long as a stock price is increasing and is supported by earnings growth, then it’s not a bubble. When you start seeing a major disconnect between these two things then there is more of a sign of a bubble. As you can see from the charts below, a bubble looks like the Cisco chart where we have a massive divergence between earnings and price. Whereas Nvidia is showing price moving closely with earnings suggesting this is not a bubble but a fundamental repricing by the market (as opposed to a speculative one) in alignment with earnings growth:
There will be speculative frenzy but also real productivity booms. The key takeaway is that the data suggests there is a structural shift in the economy taking place. Don’t get shaken out by the bears until the data changes and there is more confirmation of a bubble. PMI is still below 50 and economic expansion still has plenty of room to run through next year at least until Q1 to Q2 2026. There is massive investment taking place that suggests more of an AI Industrial Revolution is happening and is akin to past early stages of industrial revolutions:
Here’s also a comparison of macro bubble characteristics vs. macro conditions today:
Here’s also a comparison of crypto bubble characteristics vs. crypto today:
Across the board, it doesn’t look like we’re showing any signs of a bubble yet…
For further research on this, I suggest following Peter Diamandis and Jordi Visser.
Bitcoin Update
What we anticipated seems to be unfolding from last week. A local bottom seems to have formed around $108,000 and we broke above $117,800 and then surged to all-time highs. I think we either have a tight sideways formation between $120,000 to $125,000 before breaking out or there’s a straight breakout from here.
Ethereum Update
This one is also playing out as anticipated. $3800 seems to have formed a local bottom and now forming a bull flag. I think we’ll see all-time highs in the next month or so and the rest of the altcoin market will start catching up rapidly.
Solana Update
Solana looks like it formed a local bottom just below $200 and I think the next target is $252 and perhaps sideways a bit then new all-time highs.
Solana vs. Bitcoin is still testing former resistance as support and I’m still expecting this to go higher. I’m still sticking with my theory that we’re about to witness a surge higher similar to what we saw in the second half of 2024.
Dogecoin Update
Looks like we have a local bottom formed around $0.22 and next stop will be test $0.30 again for a potential breakout. I think we’re about to see a repeat of Q4 2024 where we had a parabolic move. My targets are at least 0.74 and then potentially 1.13.
Sui Update
Like the rest of the crypto market, a local bottom seems to be in from last week. Sui reclaimed its long term trendline and I think next level it’s going to is $4 for a potential breakout to all-time highs.
Large Caps
For large caps, here’s the ones that stand out on a long term timeframe:
- XRP
- Stellar
- BNB
- Hyperliquid
Pepe is still looking good. Once Bitcoin breaks out and Dogecoin continues higher, we’ll see coins like Pepe catching up quickly as money cascades down the risk curve.
Model Portfolio Update
Last week was a good week for buying the dip! The open positions are showing a positive return of roughly 42%:
The overall portfolio performance considering closed positions is roughly a 20% positive return:
We added to this dip a coin that we think will benefit from the AI infrastructure boom. 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.