Adam and Eve on the BITCOIN chart. Start of rise of cryptomarket

4 de nov. de 2022

Today we will consider many interesting aspects:
- BTCUSDT price behavior
- price behavior of altcoins
- actions and decisions of The FED
- total capitalization of the crypto market

What are the prospects in the future in our opinion for all of the above? Let's try to figure it out!

Let's start with the fact that we described in detail the possible options for the BTCUSD price movement in our previous ideas, in particular here:

Please re-read it to better understand what we will write about next

We assumed that altcoins will start to come to life when the BTCUSDT price starts to move from the first liquidity zone of $20300-20600 to the next one around $23000-23400.
But as we all can see and feel on our deposits, in the last 2-3 days altcoins began to "shoot up" perfectly. Some "heavy" altcoins rise +10-30%, and there were "unicums", the value of which increased by +50-300%.

So far, strong "shoot up" were made by cryptocurrencies with low capitalization, which before that only fell and were not interesting to anyone. The pumping of such coins can be organized for relatively ridiculous money.
The bottom line is that globally, nothing has changed in the crypto market, but a note of positivity has appeared in the minds of many participants.


Positive closing of the October candle and the first important target of $23,000-23,400

In general, October closed with an increase in the BTCUSDT price, which consolidated the status of the "greenest month" in the cryptocurrency market, if you look at the history since 2013.

Also, if you look at the chart above, you will see that November and December have quite good chances to become "green" months.

Now the Bitcoin price is trying to gain a foothold above the liquidity zone of $20300-20600, so that during the next week it can move further to the next liquidity and critical zone around $23000-23400. It is very likely that altcoins will follow the main cryptocurrency upwards.


Fed rate hike, inflation, and the reaction of the cryptocurrency market

02.11 during The Fed meeting (FOMC) raised the rate by the projected +0.75%.
Thus, during the announcement of information, and Mr. Powell's answers to questions, there was increased volatility in the market, but the market is not falling, but growing.
This can be explained by several of our guesses:
- the market has already "digested" the information that the rate will be raised by +0.75% and was psychologically ready for it. If it had been raised by +1%, that is, above the forecast, there is no doubt that the market would have fallen.
- There were also talks about buying gold as a protective asset. By the way, more than a year ago, we made an idea where we described how the XAU price behaved during crises in world history. And now, we have already waited that the XAUUSD price fell into the buying zone.

Is it possible to wait out the global crisis in cryptocurrency and is it safe?

The crisis is high inflation - it is the depreciation of your monetary assets. Inflation in the US is about 8%, in Europe +/- 10%, and in economically weaker countries it is much, much higher. At such times, ordinary people suffer.
Raising the federal funds rate aims to reduce inflation, but is it worth sitting and waiting for someone to solve the situation at the global level?

There is a less popular and more risky option to protect your savings from being "eaten" by inflation - it is an investment in projects that can potentially bring more %% than "eaten" inflation in the economy.
Large funds operate according to the "classical" scheme: "dump" risky assets - stocks, etc. index SP500 - falls, and buy, for example, gold.

Capitalization of assets as of November 2022:
- SP500 - $32 trillion
- Gold - $11 trillion
- Silver - $1 trillion
- Cryptocurrencies - $1 trillion

And now imagine the following: in addition to large funds, state regulators of large world economies also buy protective assets. Their "buy powers" are measured not in billions, but in trillions of dollars. At an adequate price, "protective assets" may not be enough for everyone.
If we take into account the fact that states cannot yet buy cryptocurrencies, because this is a conditionally unregulated market by the states themselves, then companies can afford it. There have already been precedents in previous years: Tesla, MicroStrategy, etc..


Analysis of the cryptocurrency market capitalization

Let's try to project what can happen to the total capitalization of cryptocurrencies if the "Big money" buys a "little bit" of high-risk assets - cryptocurrencies to at least partially cover the losses from high inflation.

Now the behavior and pricing of the total capitalization of cryptocurrencies are very similar to the situation in late 2018 - early 2019. The difference is that 4 years ago the capitalization was +/- $100 billion, and now it is 10 times more - $1 trillion


According to this fractal, by the beginning of summer 2023, the capitalization of the crypto market may reach $3.3 trillion, which is only 10% higher than the recorded maximum of the end of 2021.

But, if you look at the chart of this idea, then according to the white fractal in mid-May 2023, the BTC price can be $44 thousand, and at the end of 2021, the Bitcoin price at the maximum was $69 thousand. It turns out that the price gap is +50% and altcoins will have to fill it with their crazy price growth and, accordingly, the total capitalization.
This assumption fits well into the concept of the alt-season, which we depicted on the chart of this idea.

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