Crypto Market Update 08/31/2023

S&P500 

SPY has reached the support/resistance level we discussed in the last market update and has also experienced a rebound at the 20-week Simple Moving Average (SMA 20W), represented by the pink line. It appears that the momentum in the stock markets is being maintained, potentially paving the way for a move towards the previous all-time high (ATH) level.

BTC

We've recently updated the BTC charts due to breaking of the SMA20W support, indicating a potential downtrend in the second half of the year. While the chart now displays new inner levels, the primary levels remain the same. Currently, there seems to be a noticeable lack of investor interest, possibly attributed to the delayed decision by the SEC.

From this point, two possible scenarios emerge:

• Scenario A involves adhering to the traditional pattern of breaking down from a primary wedge. Following this, a retest of the wedge would occur, subsequently leading to a descent toward the lower boundary of the anticipated overarching ascending channel. This channel is projected to define the trajectory of the upcoming bull run over the next few years. Notably, this aligns with the 2023 GP Level, marked by the yellow box, as well as the 161 level of the recent upward movement, indicated by the blue box within the yellow box.

• On the other hand, Scenario B hinges on the emergence of bullish news concerning ETFs. In this scenario, the upward momentum intensifies, initiating the commencement of the bull run ahead of schedule. 

The more likely course of action seems to be Scenario A. However, should there be an ETF approval, the probability of Scenario B occurring becomes similarly noteworthy.

BTC Dominance

Dominance reached the previous multi-year resistance level, which has now transformed into support. There's not much to add except that it appears to be forming a bull flag, which would potentially take us to the 161 level of the orange bull flag, around 53%, coinciding with the 161 level of the main channel.

ETH

Finally, Ethereum (ETH) has also broken down the primary ascending trend that began in January 2023 and is currently approaching the channel support level. It may undergo a similar movement to BTC, where it retraces the trend and subsequently stabilizes, awaiting either BTC to find support or the emergence of industry-related news.

CONCLUSION

In terms of market cycles, this year, 2023, appears to have a strong resemblance to 2015 rather than 2019. While 2019 witnessed a sudden market surge within the timeframe, 2015 was characterized by a more subdued and stabilized market.

Examining 2015, we observe the commencement of an upward trend, followed by the MA20W breaking down towards the end of August. This breakdown resulted in a volatile market situation that persisted until the year's end. The current scenario seems to mirror this pattern to some extent.

A positive aspect of this is that the preceding cycle from 2015 to 2018 exhibited a far more pronounced parabolic nature than the cycle spanning 2019 to 2021.

The trajectory of the upcoming years remains uncertain, but it's highly likely that if major players publicly enter the scene, the crypto space will experience an influx of new capital and heightened interest in the market.