In the past two quarters, I spent most of my time working on the backend of Zenlalytics. I didn’t end up putting out a write-up on the cycle forecasts and just posted chart links in the discord. I’ve heard from many that that’s not good enough, so here we are back with a formal post. I hope you enjoy some of the new changes.
Also, as I polish up the final edits here on Monday night, Jan 1, BTC is plowing up through the resistances at $44.1K. While that renders much of the speculation behind the times, I’m not changing my assessments. It’s waaaaaay too early to know if this won’t be fully retraced tomorrow, and also, it’s waaaaay too short-timed to invalidate the whole quarterly context I’m looking at with this speculation. This could easily be a liquidity grab to go short for big players.
Table of Contents
In general, the quarter is expected to experience a cyclical downturn. However, I believe this will be reflected in price consolidation. I am searching for technical indicators to confirm or refute the notion that trading will occur within the range of highs established in November and December. The cycles of higher timeframes in the cryptocurrency market and safety assets are on an upward trend and positively correlated. As long as this continues, I do not anticipate anything more than a test of lows rather than a major market crash and a lower low pivot point on a higher timeframe.
Where does that leave us? The short-term price BTC top appears to be in, along with the alt market, with most things fluctuating for days on end in a range. Ideally, I’m watching all the daily charts for retracements to supports that were formerly resistances back in November. That will be where I look for supports to hold for swing buy entries. Less ideally, I’ll be taking risky longs on breakouts from the December highs on my faves, but I’ll keep tight stop losses as I’m unwilling to ride them down under the December lows.
Otherwise, I’ll be watching the Crypto Money Flow chart to see if the rotation is occurring BEFORE prices get to some level I’d prefer to buy at. I’ll keep you updated on this situation in the weekly email updates.
Now, you get to choose your adventure!
If you want to interact daily with me and other fellow readers, join the Discord by clicking here. If you want to skip straight to the charts, click here; otherwise, keep reading for my reflections on the last quarter, followed by the new quarter analysis.
In reflecting upon the past quarter, two insights stand out prominently. I've come to realize that the inherent truth of money is inescapable. Observed in specific ways, it cannot be manipulated to misrepresent reality. Secondly, daring to question the status quo can be a powerful catalyst for igniting the flames of innovation.
Follow the money:
I’ve written multiple posts on the concept of money flow. If you missed the link in the summary above, here it is. Crypto Money Flow I highly suggest you read it and become familiar with the concept. If you haven’t purchased my indicators, this can loosely be recreated by plotting BTC.D, ETH.D, OTHER.D, and (USDT.D+USDC.D+DAI.D)/3 on your chart. If you want to purchase my indicators, there’s info in the discord. There’s a general expectation that the crypto market will move in a certain way, not because it’s supposed to but because of investor psychology. People generally don’t immediately move to the riskiest things but gravitate that way after they warm up to the idea of taking risks. For crypto, that means putting money into the crypto market as stablecoins. Then, buy BTC because it’s so old it probably won’t die and is relatively safe. Then, people move into ETH to gain access to riskier on-chain platforms and finally into altcoins as they become full crypto degens in the hunt for yield. That’s a bit of an exaggeration, but the rotation is accurate and evidenced repeatedly. As I became more competent in coding, I could display this on Tradingview programmatically. Watching the money move in and out as a market value instead of looking at prices shows the ebbs and flows of the risk tolerances of market participants. Recognizing the signs of a rotation can lead me to have more faith in a discretionary condition or technical trade setup. It can also cue me to adjust my expectations according to new conditions in the money flow. At the moment, I expect the cycles to play out with prices touching November highs, but at the same time, I’m keeping my eyes on a new possible rotation that started Dec 28 that may blow away all my expectations and push us up higher instead.
Question the conventional:
There's a famous quote by George Bernard Shaw: