A Rotational Scenario in the Crypto Market

The first institutional wave of buying in crypto in 2019 had seen extremely good performance of relatively few crypto assets, like Bitcoin, Exchange Tokens and a handful of new cryptocurrencies like Link and Ren. On the contrary, the majority of the protagonists of the spectacular bull runs in the 2015-2017 cycle like Ethereum, Miota, Tron and Ripple have severely underperformed the market in 2019. After a 90% crash, they have been quietly consolidating for months forming a large basis, in the utter oblivion of retail traders.

The price action of these coins did not go unnoticed to our Wyckoffian eyes. In this year’s Best of Wyckoff conference, available here on-demand, we have spotted telltale signs of institutional presence in several of these crypto-assets since late 2018. Here is a quick update about MIOTA (IOTAUSD on the ticker), a cryptocurrency that we have already discussed in August. In the last week, while all eyes were on the launch of the new Bakkt ICE Bitcoin Futures contracts, several altcoins started to outperform the market. Is this a clue of a possible rotation of leadership in the next months? The next days will be crucial to write the roadmap for the next move in the crypto space. If Altcoins continue to outperform BTC, a high probability scenario could look like the dotted blue line in the chart.

An inter-asset chart that can help us to decipher the rotation process is the BNB/ETH ratio below. The first asset of the pair, Binance Coin (BNB), is the most important Exchange Token, and represents an asset class that performed incredibly well during the first wave of institutional wave in 2019. Ethereum (ETH) was the protagonist of the 2017 epic bull run. Both cryptos have strategical roles in the space. Look how signs of possible inversion between the leadership of these two competing assets are evident since early May 2019.

What assets will lead the crypto market in the next future? Contrary to common perception, are cryptocurrencies like Ethereum, Ripple, Bitcoin Cash, Miota sleeping giants with huge PnF counts and very high targets?

Ultra speculative markets are characterized by very dull periods followed by aggressive up moves. What it at first looks like a sport of velocity is actually a long chess game where few moves determinate the outcome. That’s why it’s extremely important to recognize the early signs of market rotation before the beginning of a trend. We will analyze several assets like Ethereum and Ripple in the next blogs. Stay tuned!