Crypto Bulls on Parade

By Juan Villaverde on January 17, 2020

After the long crypto bear market in 2018 … the choppy recovery in 2019 … and all the gloom that naturally ensued, crypto markets are now launching what could be a far more sustainable bull market.

We see the signs in three places:

Breadth: All our price indexes have jumped by double digits. And all are showing positive momentum.

Time: This past week was precisely the time it had to happen, and it did, confirming and reconfirming an 80-day Bitcoin cycle that has consistently helped pick critical bottoms.

Price: Since hitting their last 80-day-cycle lows, Bitcoin has surged 35%, while Altcoins are up 53%. Plus, just in the past week ending Thursday, Jan. 16, our Weiss 50 Crypto Index (W50) is up an impressive 21.82%.

We see even greater strength in leading altcoins, including DASH, Ethereum Classic, Bitcoin Cash and Bitcoin SV.

Result: Our Weiss 50 Ex-BTC Crypto Index (W50X) is up 34.7% on the week. This index is comprised entirely of altcoins. So, it clearly illustrates how this sector of the market is leading the charge.

Meanwhile, here’s the picture that emerges when splitting the market by market cap:

The Weiss Large-Cap Crypto Index (WLC) rose 18.04%. This index is mostly dominated by Bitcoin, which was a relative underperformer this week.

The Weiss Mid-Cap Crypto Index (WMC) surged a whopping 43.7% on the week, another telltale sign of altcoin resurgence.

But small caps underperformed, with the Weiss Small-Cap Crypto Index (WSC) up only 15.96%. These smaller projects are simply not yet getting much attention from investors, even in a very bullish week.

Here’s our take going forward …

First, the Bitcoin rally is encouraging (despite its relative underperformance). Reason: It takes a heck of a lot more money to move Bitcoin than any other crypto asset. So, in terms of sheer volume, the King of Crypto is attracting very substantial buying power.

Second, this week’s crypto surge happened despite the absence of geopolitical catalysts. We’ve often seen Bitcoin enjoy rallies triggered by extrinsic events, and the last couple of months are no exception: China’s announcement that it was “all in on blockchain” … the fear of a U.S.-Iran war … and more.

What’s was notable this week is that Bitcoin without those kinds of price boosters, a healthy sign.

Third, the surge in our indexes is not driven by just a few outliers. Yes, crypto assets like DASH and Bitcoin SV surged dramatically. And yes, this may lead some analysts to believe that the explosive rallies in our indexes were caused by just a few names. However, that’s not the case. In fact, neither DASH nor Bitcoin SV makes up more than 6% of any index.  Make no mistake: This rally is broad-based.

All good news! But we’re not 100% out of the woods yet. To confirm the bull more conclusively, most cryptos still need to cross significant resistance levels in our time-price models.

The bulls are definitely on parade. They just need another week or two to cleanly break out to the upside.

Best,

Juan

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