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
I’m working on gathering data for more leading indicators in the coming weeks. As I have covered in previous newsletters, the two main indicators impacting risk assets are:
- US PMI
- Global M2
Once you understand what impacts these, you have a more comprehensive framework on where risk assets are going on a multi-month timeframe. Lately, my focus has been on leading indicators for US PMI. Let me share a new one I have so far.
New Orders
When we think of PMI, think of it like a report card for manufacturing (a sensitive sector to the business cycle). This report card consists of:
- New Orders (are customers buying more?)
- Production (are factories making more?)
- Employment (are they hiring?)
- Deliveries (are supplies moving fast or slow?)
- Inventories (are shelves filling or emptying?).
Out of those, New Orders is the first domino.
If customers suddenly order less, factories don’t cut production, hiring, or inventories instantly.
It takes a month or two before managers respond (slow production, adjust staff, manage supply chains).
Orders come first, activity follows. The PMI headline lags because it measures the response to those orders, not the orders themselves.
With that said, the print for New Orders earlier this month came in above 50 which suggests we could finally see PMI cross above 50 with the next print in October.
Global M2 YoY vs. US PMI
I have shared this a couple times in previous newsletters and it has become my go-to chart because of the strong correlation and a very decent lead time of 5 months. In the age of money printing post 2008 (or some call it the age of quantitative easing or QE), this is what keeps the system afloat and is a major factor in impacting risk assets. There is a lag before the growth in Global M2 impacts the business cycle but the idea is that the higher growth in Global M2 results in a positive uptrend for the business cycle and decreases in growth rate leads to declines in the business cycle. I am still on the hunt for leading indicators with similar profiles to this where we have a very strong correlation and long lead time to get ahead of where the market is going.
Bitcoin Update
As I mentioned last week “If Bitcoin can reclaim $112,000 on the daily timeframe then I think bullish momentum will return otherwise it’s just sideways until then.” Well ladies and gentlemen, we had a nice rally and Bitcoin is cooling off a bit at the moment. I wouldn’t be surprised if it touched $113,000-114,000 before resuming its uptrend.
Global M2 is still showing higher with a bit of sideways toward the end of September and early October:
Ethereum Update
Ethereum continues to go sideways near its all-time high. The bullish case is we continue higher from here and make new all-time highs. The bearish case is we drop to either the 20-weekly EMA around $4000 or to $3800 before resuming its uptrend. I am still expecting for an explosive move higher and once firmly above all-time highs, we will see the rest of the altcoin market catch up in due time.
Solana Update
I mentioned last newsletter “I still think $250 is a possibility this month” and we reached at least $249 on most exchanges. We could see a pullback to $215-230 before continuing higher.
Solana vs. Bitcoin continues to march higher and 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
Dogecoin is starting to move and ran up to 0.30 this past week. We could see a pullback to 0.25-0.26 before going higher. 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
Sui broke above 3.50 so this is a good sign and I think $4 is next. Then all-time highs. The bearish case is we continue sideways between $3-4.
Large Caps
For large caps, here’s the ones that stand out on a long term timeframe:
- XRP
- Sui
- Stellar
- Hyperliquid
Pepe has broken out of this short term downtrend and I think is set to go higher as Dogecoin goes higher:
Making a Plan
As the markets start picking up, I think we have the prominent altcoin season emerging by end of this year. Before things get too euphoric, this is a good time to create a plan, if you haven’t done so already, on what actions you will take (if any) with the next major moves higher. I highly suggest you do this early before the market is parabolic as your emotions might get the best of you and lead to poor decision making. This is one of the biggest (if not THE biggest) challenge in the crypto market. Too many people hold for too long and do not realize their profits timely. This is especially the case with smaller altcoins where the volatility can be short lived and the gains are not sustainable. This is why as a general rule of thumb, the smaller the altcoin, the more frequently you should be taking profits. The purpose of the plan is to keep you grounded in reality and have something to refer to when things get highly emotional. This will ensure you act as rational as possible and avoid making rash decisions. As I shared in the Pro Discord, here’s my plan and you can adjust to your own needs as you see fit. Do not blindly follow me and make sure you evaluate your own needs, goals and risk tolerance.
Example Plan from Altcoin Screener
The model portfolio as well as my personal portfolio is split into two parts:
- Core positions
- Consists of Large Caps or higher conviction plays that I want to hold onto through the cycle top. These tend to be less volatile so I’m okay holding for longer and avoiding trading around them. I still plan to sell all of these close to the cycle top because nothing is spared from major downside in a bear market. Based on the data so far, I don’t expect the cycle top to come at the end of this year and it’s more likely it comes in Q1 or Q2 2026 but I’ll monitor the data and provide updates as time progresses.
- Swing positions
- These are smaller altcoin positions (basically anything that is not a Large Cap) with a lot of volatility so I plan to sell at least 80% of these with the next major local top in Bitcoin which based on various models suggest is around $145,000-$160,000. The reason for this is if Bitcoin has a correction of 20-30% or more then it’s highly likely these will drop more than double that and possibly not recover. As we saw with some coins from January 2025, they got hit hard and some have still hardly recovered. We want to avoid being in that type of situation again. Some portion of my profits I will keep out of the market and some I will keep as dry powder to buy the dip again as long as we don’t have a ton of data suggesting that the cycle top has triggered.
I hope this is helpful and again: do not blindly follow me. Really take the time to think through what your needs are and tailor your plan accordingly. Those who are failing to plan eventually plan to fail. Any Pro members can ping me through Discord with questions.
Model Portfolio Update
The open positions is showing a positive return of roughly 41%:
The overall portfolio performance considering closed positions is roughly a 19% 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.