January was a relatively quiet month for crypto after an early overall 15% decline in total market capitalization while equities staged their spectacular comeback. My mental model for 2019 is that of a farmer who plants and cares diligently for his crops in patient expectation of a bountiful harvest!
While the overall trend in crypto markets is still down, bitcoin $BTC and alts prices have remained above their December 15, 2018 lows. We are probably in an accumulation zone with a retest of the December lows still ahead of us in February. My bias is 70/30 in favor of the lows being in and that the first higher lows and highs above the $BTC – US$4,100 level may be confirmed as early as later in February or March.
Sentiment is at rock bottom with the majority seeming to favor another leg down into the US$2K region. Perhaps since everyone expects another break of support – well, then we go higher from here. Fundamentals are strong and improving, but certainly anything is possible with bitcoin. Accordingly, this is a good time to slowly start to accumulate only the very top coins while preserving capital to buy more lower IF we dip there as well as keeping powder dry for the higher prices where market bull trend reversal is confirmed.
During the next 10-15% rally in bitcoin, certain altcoins are likely to return 50-100% over the same time frame. The whole market usually rises and falls with bitcoin, but I am watching for an earlier positive performance breakout to start with Litecoin or XRP before we see the next significant moves in bitcoin.
Total cryptocurrency market capitalization on 1/31 was approximately US$114billion, $BTC dominance was steady at 52%.
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