Reasons for optimism in the crypto market ☀️

The crypto market finally shows strength

Author

Justin
July 21, 2024

Hey everyone,

Last week we had done a review of where we are in the market cycle. As a recap, the conclusion was that we’re likely farther into the crypto bull run than people think, but that there were some reasons for potential optimism moving forward.

Since then…we’ve only gotten more confirmation that the market has the potential to head higher 😀.

Let’s go through it. Heads up, I’ll only be including updated charts from last week that included something noteworthy.

  1. The financial conditions index (NFCI) (in blue) indicated that the bull market is likely still heading higher. As a reminder this metric shows how loose or tight financial conditions are. If they are loose the number is low which is consistent with more liquidity. Historically this metric indicated the end of a crypto cycle when it bottoms and heads higher. This week it actually accelerated to the downside, which is positive.

    Note: The orange line is Bitcoin’s price, the Purple is the RSI of the NFCI, and Yellow is the moving average of the RSI.

  1. Tether dominance (USDT.D) (in blue) continued its downtrend…which is typical of a bull market. Last week we had speculated that Tether Dominance was likely rolling over and headed downward. This has been playing out which is a good sign that crypto markets will and are heading higher. Reminder that when Tether Dominance has historically hit the green trend line we’ve reached a peak in crypto prices.

    Note: The Purple line is the RSI of Tether dominance, and Yellow is the moving average of the RSI.

  1. Bitcoin price (in orange) action also continues to indicate we’ll likely head higher. When we look at the 1 month chart of Bitcoin, and look the the moving average of the RSI (in yellow is the moving average of the RSI and purple is the RSI at the bottom), its easy to see that the cycle top tends to be right before the moving average in the RSI peaks. From the chart we can see thats likely still months away.

  1. Short term Bitcoin price (in orange) action followed through showing much needed new strength. Bitcoin showed some nice momentum and strength. After seeing Bitcoin show quite a bit of weakness over the last few months this was needed and an encouraging sign. The ultimate test will be whether Bitcoin can break its recent all time high at some point.

    Note: The Purple line is the RSI of Bitcoin’s price, and Yellow is the moving average of the RSI.

All this information is very encouraging that the crypto bull run likely isn’t over yet. What it shows is that the momentum needed to continue the bull run likely has returned…though as always nothing is ever guaranteed in investing.

Cheers,

Justin

P.S.

Dogecoin is showing some strength again too 😀 . It finally broke through the green trendline shown in the chart. Could also be a sign of good things to come.

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