The crypto bull market is not “doing what it’s supposed to do and is letting folks down lately, but ‘the world don’t stop.’ If you don’t accept you are ‘in real life’ and change your perspective, opportunity and ‘time is only gonna pass you by.’
There’s a quote by Shakespeare that is relevant as you join me today: "What's past is prologue.” You can find folks all over the internet studying historical patterns to illuminate the path ahead. The echoes of past market behaviors, economic cycles, and investor sentiments often set the stage for the unfolding drama of the coming months, providing valuable insights.
This was the primary thesis for 2024 Q2:
“The short-term market top appeared at the end of last quarter. Technical analysis supports the notion a high resistance top has been formed. Since we are still in a larger uptrend (weekly/monthly) I expect the downward legs of the cycle to be ranging prices instead of full on decline…”
This was largely correct analysis, as 80% of the Total Crypto Market Cap stayed within the same range of 2.114T to 2.598T for the entirety of the quarter. Each monthly candle, high to low, looked almost the same.
In this report, we'll explore how the prologue of recent market activity might shape the upcoming quarter’s technical narrative.
The goal of the form of analysis used to create this report is to identify the market’s rhythmic up-and-down waves across various timeframes through algorithmic pattern analysis and construct a model representing the market’s repetitive nature or cycles. Assuming the patterns continue uninterrupted, they can provide insights into potential future market behavior and turning points.
The analysis method I use to create this report aims to identify and understand the market's rhythmic up-and-down movements across various timeframes. I employ algorithms to detect recurring waves in price action and construct a model that represents the market's repetitive nature or cycles. The underlying assumption is that these patterns will continue uninterrupted. If this assumption holds true, the analysis can provide valuable insights into potential future market behavior and help identify possible turning points. Essentially, this approach attempts to discern a predictable rhythm in market movements, using past patterns as a guide for future expectations.
There are a few common issues with this approach. The model’s direction is not always directly reflected in the price action on the chart. Also, there are often many detectable patterns at once, and it’s always speculation as to which ones are the patterns in play at any given time. This leads to the third issue: with each new day, new information is generated, which can dramatically change the outlook. To mitigate this issue, I create a model at the beginning of each quarter with my expectations for the next three months and use technical analysis, day by day, to validate or invalidate this thesis.
Below, I’ll review five datasets that, in combination, can create a comprehensive and accurate picture of the crypto market’s future.
Market Cap of the 125 cryptocurrencies.
https://www.tradingview.com/chart/PWN4Px3Z/
What’s on the chart:
The yellow, blue, and red lines show a bullish alignment of the daily, weekly, and monthly cycles. The daily cycle in yellow shows a peak for late August. The weekly and monthly cycles currently show peaks in Q4. Overall, the bullish alignment would suggest that more money will enter the crypto market this quarter, likely with increasing prices.
What the chart means to me: