Fortunately, we are positioned and have been for a long while, but we do have our sceptical hat on that BTC is hitting $50k (30% or so shy of the all-time high) three months out from the halving - not even post-halving.
Hence, we were sceptical. We do our best for you guys, and we cannot always be right, but we try to be mostly right more than wrong and aim to know when to be more risk on than risk off.
But this last week or two of price action has surely caught us off guard.
We'll shout it out when we are right, but we will also hold our hands up when we get it wrong.
Let's dive in...
Disclaimer: Not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. "One Glance" by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. They are not signals, and they are not financial advice.
Yesterday's data + the market's response
Yesterday, we had the release of the inflation data, which came in hotter than expected.The market reacted negatively to this as it essentially suggested that rate cuts are much further pushed out if inflation becomes more of a problem again for the FED. They can't cut rates into rising inflation. Therefore, the DXY and Bond Yields moved higher, and risk assets sold off.
However, BTC has shaken this off. You'd expect risk assets to feel some pressure with yesterday's data, yet Bitcoin has recovered price-wise and is at new yearly highs.
Alongside this, we also saw extremely positive inflows for the ETFs yesterday. We're still so early in this cycle, and despite prices being up a lot, people just don't care; they want in as they see it all going much higher. Although this is an emotion that we should be a little cautious of. It won't be up only for the next 18 months; there will be dips along the way.
This price action and response to the bad data is the first time we've seen this positivity reflected in price action really since 2021 - a real positive sign.
Mid and long-term expectations for the market
On-chain wise, there are a number of indicators that suggest that the short-term is close to being overbought. Alongside this, we're three months out from a halving and only 30% or so away from the all-time highs.It would be irregular for price to continue performing like this three months from a BTC halving. You'd expect some kind of consolidation or even a slight pullback in the coming month or two.
However, the long-term metrics still suggest we're early in the cycle, and prices aren't exhausted here.
Cryptonary's take
Even though price action has been so positive, we are not really looking to add further risk (USDT into new positions) at these prices at this stage in the cycle. You should already be heavily allocated, but if you have USDT on the side, we wouldn’t be ape’ing into this price action.However, if there are pullbacks, even if that means prices go higher first, these pullbacks should be bought. In this kind of environment, pullbacks won't really be deeper than 10%-20%, so you're better off waiting for these kinds of dips to load more capital (USDT) in again.
At current prices, we don't look at BTC and consider it an attractive entry at $51,700. Anything sub $47k would now be attractive, but ape'ing in at this price? We'd rather wait and load up on a pullback or re-allocate into opportunities that still look attractive price-wise.
ETH and SOL, we still think, look good. SOL is our Head of Analysis’s long-term winner, and we see prices at $600/SOL, maybe even higher.
So, if you're ok buying at $115 and are happy to sit through a potential 20% or so drawdown and not panic, then all is well.
Just be aware when you ape into highs, there's a chance you could be vulnerable to a pullback.
We are off to the races.
Don’t fumble the bag!