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Has the BTC Pullback Ended? Is There Still Room for Altcoin Season? | Trader's Insight

CMed

24-11-18 17:58

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Since Trump was elected President of the United States, the biggest narrative around cryptocurrency has changed. Many people say that Trump's presidency has ushered in the era of the "Crypto Golden Age," where cryptocurrency may no longer be heavily regulated by the SEC as a "security." The U.S. stock market has also seen extremely polarized "Trump Trading" market sentiment, with Tesla and the Trump Media Group experiencing significant surges.

BTC has also been in sync with the U.S. stock market and has shown even better performance. During this period of time, BTC broke out of a six-month long consolidation phase and embarked on a strong upward trend, successively surpassing the key levels of $80,000 and $90,000, with very little "pullback" in between. Interestingly, many market whales who were shorting the market were consecutively liquidated, witnessing the liquidation of short positions worth $80 million and $20 million in the futures market.

However, all good things must come to an end. As the trading sentiment of "Trump Trading" cooled down, the U.S. stock market experienced a significant pullback, with the Nasdaq index closing lower for five consecutive trading days. Initially, BTC was still able to rise independently of the U.S. stock market, but on November 14 and November 15, there was a slight retreat. However, it seems that BTC has found support around the 4-hour EMA20 level and has rebounded, currently still above $90,000.

Most altcoins experienced a significant surge after Trump's election, with gains of 20-30%. However, considering the past "halving" and "knee-capping" scenarios, it seems like a long and difficult road to recovery for most people. With BTC opening up room for growth, do altcoins still have a chance? Is it still suitable to go long on BTC at this point? Let's see what traders in the market think.

Technical Analysis Enthusiast

@biupa

OTHERS.D has been in a downtrend channel for the past 49 days, while DXY has been in an uptrend channel. The two have shown a strong negative correlation, explaining why altcoins have only followed BTC's rise but experienced deeper pullbacks. Both the U.S. dollar and Bitcoin have been riding high on policy, and the casualties are the altcoins. Recently, I've been too focused on internal data within the crypto community, neglecting the impact of macro factors. A reasonable prediction now is that a reversal in DXY will bring about a rebound in OTHERS.D.

As for BTC, the closing on the 15th of the month at 5 a.m. UTC showed a negative premium on Coinbase (the last hour of the U.S. trading session). There was no negative premium in the following hours, which may be an isolated incident, but it is worth noting. As U.S. buying pressure weakens, BTC's upward potential in the short term is limited. Personally, I believe that the probability of reaching $100,000 by the end of the year is not high.

@Cryptos_Laowai

@Cryptos_Laowai believes that the real bull run will only begin post-Trump being officially elected as the President of the United States and introducing genuinely crypto-friendly measures, likely after 2025. Therefore, the current scenario is most likely just a brief peak of a minor bull run, and a widespread altcoin season is unlikely to occur. Following the break of the current uptrend line, the current analysis suggests a standard double-peak formation, anticipating a significant drop. The expectation is to fill the CME gap next week, with a short position target at $76,000.

@CryptoPainter_X

Currently, BTC has four potential price trends, and a quantitative strategy still holds a long position at $69,000. Structurally, it remains a bull market; however, the following four scenarios are possible:

1. Price continues above the 9-week moving average (maintaining an oscillating uptrend);

2. Price continues below the 9-week moving average (establishing a confirmed range-bound market);

3. Price drops below $85,000, triggering a bearish reversal (sustaining a range-bound market with long opportunities);

4. If the price definitively falls below $85,000 and fails to reclaim that level, a potential extreme correction is considered, possibly filling the CME gap;

If BTC follows a weaker path than the fourth scenario, a temporary end to the bull market phase is possible.

@roger73005305

Today's analysis continues on the overall market and altcoin trends.
Later, everyone will witness the magical phenomenon of BTC falling while altcoins rise.
Firstly, let's analyze the market performance from December of '21 to February, which encompasses the current market up to the Lunar New Year in February.
At the end of December '21, the overall market began a period of consolidation, which lasted until February. Logically, during this consolidation or drop in the market, altcoins should have plummeted. However, that was not the case because by this time, BTC had already risen significantly, altcoin sentiment was just starting, BTC dominance had reached its peak, a reversal began, and the altcoin season kicked off. This is when we began to see high-quality altcoins like BNB and SOL gradually rise. Selling for profit or reducing exposure at this stage would not be wise because they hadn't even risen; there was no profit to take or exposure to reduce.

So, in my opinion, we should continue to hold high-quality underrated altcoins. Those that have already surged several times should at least be sold to cover the initial investment. For those looking for stability, you can sell everything and switch to altcoins that have not risen.

Data Analysis Team:

@Maoshu_CN

As of this week, two weeks have passed since the market sentiment after Trump's victory. Through market data, we can clearly see that the sentiment is gradually weakening. Therefore, next week, whether we can continue the market expectations after Trump's victory and the independent market trend is a key point we need to focus on.

Of course, with the good future outlook, funds are also fully flowing into the market for precipitation, which undoubtedly bodes well for the future market. At the same time, this will also provide a guarantee for the market price decline, especially for BTC. If there is a sharp short-term bearish trend next week, I believe it may stimulate many funds to buy the dip.

If next week does not continue the short-term expectations of Trump's victory, then we should be prepared for a pullback, referring to the chart analysis.

Comparing with the data from Thursday, the overall market capitalization has decreased, with a predominant decrease in #BTC and #ETH market capitalization, while the altcoin market capitalization has increased, indicating an increase in market risk appetite. However, based on the percentage, the current #altcoin situation still overly relies on the meme sector.

The overall trading volume has weakened, activity has decreased approaching the weekend, but if we compare this weekend's market data to last year, the current trading volume activity is still at its peak, both in terms of BTC, ETH, and altcoins' overall trading volume, as well as USDT/USDC fund activity.
Funds continue to flow significantly into the market, with the current market stock funds at 186 billion, showing another significant increase compared to Thursday.

@Murphychen888

According to the indicators:
1. Currently, the red line is approaching the short-term high point, and if it goes up further, it will create a "divergence." Based on past experience, the larger the divergence, the larger the retracement.
2. At the same time, it is observed that a small retracement may occur in the next 10 days. The current red line is 2.52, and the retracement range is around 2.35, corresponding to a current BTC price of around $82,000 (this calculated price will increase over time).
3. After this period of time, around mid-December, there will be a return to the upward trend. However, based on current data, it is unknown whether it will significantly exceed the previous value.
Personally, due to my low holding cost, I will ignore this short-term fluctuation. If the holding cost is high, one needs to make their own trading plan.

Options Market Data:

CF Benchmarks Product Lead Thomas Erdösi stated that market data shows that traders seem to be buying up Bitcoin call options with a $100,000 strike price. The 30-day constant maturity 25 delta skew has now surpassed the 5 vol threshold, approaching the highest level since the beginning of the year, indicating a much greater demand for upside exposure.

Furthermore, there is a significant increase in demand for call options with a strike price above $100,000, as evident from the rising implied volatility of these options.

Macro Analysis Team:

@Maoshu_CN

Inflation data is essentially neutral, neither bullish nor bearish, completely in line with market expectations. Overall, inflation remains under control, but a short-term inflation rebound can also trigger market concerns about future inflation.

As for the U.S. stock market, the trend is relatively cautious, especially with the S&P effectively turning at the 6000 point milestone. In fact, such an action is positive for the U.S. stock market. Regarding Crypto and BTC, the current sentiment is overly optimistic, where any news is interpreted as positive unless it's bearish. That's the current enthusiastic state of Crypto.

The inflation data has once again sparked discussions in the market about a rate cut in December. Currently, CME rates indicate an 82.5% high probability of a 25 basis point rate cut in December. Furthermore, considering the current U.S. economic sentiment, although CPI data rebounded but didn't exceed expectations, aligning with last week's speech by Powell from the Federal Reserve, short-term CPI data will not alter the Fed's decision. Additionally, the next U.S. President, Trump, has a proactive stance towards a substantial rate cut, which may indirectly influence the Fed's future actions.

Moreover, the market has gradually accepted the expectation of future higher inflation, so the short-term inflation pressure is no longer a significant negative sentiment. In the previous Powell speech, a key point was mentioned regarding the Fed seeking the right neutral interest rate, in order to adjust policies around that rate. The current neutral interest rate may be higher than market expectations, which could be a crucial topic for the Fed going forward.

@Phyrex_Ni

From the current data, it appears that the FOMO sentiment among U.S. investors may have cooled off. Currently, there is a range-bound fluctuation between $87,000 and $91,000, and it's hard to say whether this position can form a new support level. Historically, there has never been a vacuum in BTC price movement. However, from URPD data, it's evident that the positions at $77,000, $78,000, and $82,500 have almost no holdings, which although speculative, have been "filled" in the past.

From last week's ETF data, we can also see a significant decline in buying power for both BTC and ETH. There was even substantial selling of BTC yesterday, indicating that the FOMO sentiment during the election phase may have ended, and the next phase is likely to be a rebuilding of support levels.