🚀 Bitcoin / Crypto - Month End Considerations

👇1-10) Our Top 10 Ecosystem portfolio (targeted to RIA, Wealth Managers, and other medium to long-term crypto investors) is rebalancing on the last day of each month, and the weighting from now on are Bitcoin 20%, Ethereum 20%, BNB 9.3%, Solana 9.2%, XRP 7.9%, Cardano 7.2%, Avalanche 6.8%, Tron 6.6%, Chainlink 6.5%, and Polkadot 6.5%.

👇2-10) The portfolio rebalances monthly and caps each token at 20%, removes meme and stablecoins, and has generated a similar amount as Bitcoin over the last 12 months with the benefit of diversification.

👇3-10) The Crypto market traded $56bn during the last 24 hours, with Bitcoin accounting for $23bn of the volume (41%) and Ethereum $10bn (18%). Overall, Bitcoin dominance has remained high (51%) while Ethereum’s has fluctuated, rising to 19% shortly after the Bitcoin ETFs were listed, only to decline back to 17%.

👇4-10) Unless the Bitcoin dominance indicator drops consistently below 50%, it is too early to call for a sustainable altcoin rally – as some have tried to argue would occur. A disciplined and monthly rebalanced Top 10 portfolio has proven to be an alternative to picking altcoins randomly, as the portfolio performance has matched the return of Bitcoin during the last 12 months.

👇5-10) The (smaller cap) token return distribution is disappointing year-to-date; out of the top 87 tokens by market capitalization, 20 are up, and 67 are down – 23% are up, and 77% are down. Bitcoin and Ethereum are only up +1% and +2%. TIA +58%, BLUR +35%, ASTR +31%, and SEI +24% are leading this year, while APT -36%, LUNC -30%, ALGO -27%, and BSV -27% are declining.

👇6-10) Many blamed Grayscale’s GBTC outflows for Bitcoin’s correction from 44,000 to 38,500, but the lack of inflows into those other ETF issuer products has surprised the market.  BlackRock and Fidelity are seeing the most inflows, but both ETFs only trade $651m per day (combined volume) vs. Bitcoin’s overall volume of $23bn (or just 2.8% for those two ETFs). Therefore, the focus on these ETFs is misplaced, and Bitcoin tends to lead the volume in these ETFs.

👇7-10) On Friday, January 26, when we called for the end of this correction (Bitcoin @ 40,100), we used the signals from our technical chart book indicating that the risk-reward had favored long positions. The performance supports higher prices, and any further dip should be used to add to long position.

👇8-10) Our follow-up report from Monday, January 29, projected that Bitcoin could reach 50,000 by the end of this quarter as Bitcoin had just completed wave (4) and the next leg higher, wave (5) appeared most likely. Our three reversal indicators have rebounded, with 2 of them from ideal levels.

👇9-10) While we also expected that 43,000/44,000 would be a minor resistance for Bitcoin (see January 26 report), the reasons were primarily technical, with the fundamental reason being blamed on overambitious US tech companies’ earnings announcements, which were priced to perfection. We reiterated this risk of consolidation in our WhatsApp and Telegram chat groups yesterday, and when Google (Alphabet) announced its earnings, Bitcoin also suffered.

👇10-10) Once this brief tech earnings season ends, we expect Bitcoin to resume its uptrend and rally toward the 50,000 level during the next two months. The risk asset environment remains supportive, and with interest rate cuts on the horizon, we expect all asset prices to be higher in 2024.