#31 | Bitcoin Spot ETF Season
Could altcoin season be delayed for a brief Bitcoin ETF season? And what do technicals say about an impending approval?
Issue #31 of CoinChartist (VIP) overview
Why Bitcoin technicals still favor more upside
How to tell when altcoin season begins?
Stocks hit new all-time highs but fail to bring strength so far
Bitcoin hits new ATHs against government bonds
Solana and Bitcoin stop at an area where caution is warranted, find out what level and why
Special spotlight: Getting an early read on ETF approvals with GBTC
Remember, a premium subscription comes with access to custom technical indicators like the Raging Bull, Trend Wrangler, and more.
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Bitcoin finally made a move out of consolidation to $47,000 but with ETF speculation rife across the crypto market, volatility and pre-approval/denial profit taking are keeping prices from ripping higher. However, technicals favor more upside in BTCUSD as we’ll explore. Importantly, Bitcoin technicals point to higher prices regardless of what happens related to the ETF. But with such a bullish outlook, the ETF approval appears to be destined in the chart.
My customized version of the Ichimoku continues to guide us as to where Bitcoin is going. Starting in July 2023 the bottom of the cloud acted as resistance. The sideways price action made it into the cloud, but fell out the bottom in August. Reclaiming the bottom of the cloud in October was a sign the next stop would be the top of the cloud. Now, Bitcoin held five weekly closes above the top of the cloud and is blasting off higher. Above the cloud there is very little resistance left which means Bitcoin could continue sharply higher.
As Bitcoin price pushes above $47,000 per coin, it adds a darker green tick to the LMACD histogram on weekly timeframes. This is a sign that momentum is increasing. Looking closely at the LMACD and Signal line in blue and orange, we can see that the two lines are beginning to diverge. Converging and crossing over would be a bearish signal, while what we are seeing has bullish potential. A weekly close above $47,000 is necessary to confirm the darker green tick.
Another sign that momentum should be increasing is in the weekly Relative Strength Index. The RSI is pushing back upward after holding strong at the overbought level. RSI readings above 70 are considered overbought. However, in crypto, assets remain overbought during extended bull runs. The weekly RSI rarely reaches above 70 in a bear market. A higher high on the weekly RSI should send Bitcoin skyrocketing.
The Fisher Transform, a statistics-based technical indicator, is showing the third-strongest move since the December 2017 peak in Bitcoin. Each time the technical indicator pushed above +4.5, BTCUSD had a powerful parabolic move upward. Both the 2019 and 2021 rallies stopped at the same Fisher Transform level. Taking out this level would create an unprecedented rally in crypto.
Altcoins took a very sharp turn for the worst during the first two weeks of 2024, giving back recent gains and causing regret in those who bought in around the holidays. If you haven’t read the 2024 preview, it looks heavily forward toward an eventual altcoin season this year. However, the recent strength in Bitcoin due to the ETF is pushing Dominance back to local highs.
Bitcoin Dominance found support directly at the Trend Wrangler moving average. Before we are ready to declare it is altcoin season, BTC.D must lose and close below the Trend Wrangler. If at any point BTC.D trades at 57% and above the dashed line, the Elliott Wave count I am using for altcoin season will be invalidated.
BTC.D quarterly charts show price action pushing into the Bollinger Band basis – a 20-period SMA. Dominance has been rejected above the level in the past, and considering the Shooting Star candle in Q4 2023, a reversal could be imminent. Importantly, the lower Bollinger Band could give us one of the first logical targets for the next altcoin season to top out at: roughly 32%.
Looking at TOTAL3 excluding BTC and ETH, the cryptocurrency market has closed above the upper Bollinger Band. At the first arrow, the same breakout occurred, followed by price falling back into the upper band, only to breakout again two months later. A similar situation is possible where altcoins pause for a couple of months for reaccumulation.
A couple months might be all it takes, according to Ethereum on the ETHBTC trading pair. ETHBTC monthly is on a perfected TD8 buy setup. More than likely, the count will reach a perfected TD9 buy setup in February, when the low could be put in based on market timing from the TD Sequential.
That’s it for free content. Beyond the paywall is the following content:
How to tell when altcoin season begins?
Stocks hit new all-time highs but fail to bring strength so far
Bitcoin hits new ATHs against government bonds
Solana and Bitcoin stop at an area where caution is warranted, find out what level and why
Special spotlight: Getting an early read on ETF approvals with GBTC
Remember, a premium subscription comes with access to custom technical indicators like the Raging Bull, Trend Wrangler, and more.
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