The recent Iran – USA military confrontation has certainly pushed the price of oil and gold up significantly in a matter of the first days of this new decade, but will increased rumors of war help the cryptocurrency markets at all? Gold is a traditional safe haven in times of uncertainty so the price spike is natural now. Investors are moving their cash into gold in case the dollar or other fiat shows weakness under the increased risk. And Iran is one of the major oil producers globally. The strike on their top military general and local hero might induce a retaliation. The main risk is that Iran now blocks the Straits of Hormuz, preventing global oil tanker passage from delivering to other global harbours. So oil is now a hot commodity. But what about crypto?
Bitcoin may appear to be trading higher today, and many alts are also in the green, showing some promising gains. In fact the total market cap, according to the CoinMarketCap website, has broken the $200 billion resistance, almost at $202 billion as I write this. But this is still almost half of what it was just six months ago. Even just a month ago the market cap was greater than it is now. Nevertheless, the $200 billion resistance has been a psychological “big even” level to watch since November, so every time we break above it, the bulls get inspired.
If we look at the market cap of all the other cryptocurrencies, excluding Bitcoin, which also peaked in June last year, we can see some distinct growth. The altcoin market cap has, in fact, been steadily climbing for the past three days in what looks like an attempt at an “altcoin season”. And this is going to peak the attention of many a trader and investor, especially after languishing in the doldrums of deflated price action for so long now.
When Bitcoin price action remains so flat, as it has this past month, it provides an opportunity for alts to pump in relation to Bitcoin. Actually the altcoin market cap bottomed around three weeks ago in mid December, and has moving sideways or flat since then, until now. So the sudden pump over the past three days in alts is something to take not of. Market dominance among all cryptocurencies including Bitcoin has not changed much though proportionately. Bitcoin has dropped ever so slightly, but nothing more than a ripple in the general fluctuation, or “chop” as they call it in day-trading parlance. Still, I recommend you keep an eye on the alts now because they may well be stirring like a sleeping dragon ready to rise as Bitcoin dominance slips.
Having said that, Bitcoin itself has pumped 10% since the dip on the third, just three days ago. But remember that 10% is not a huge shift when it comes to Bitcoin. It only appears so after the past month of sideways price movement. Prolonged sideways movement does usually indicate an imminent spike though and I have been waiting for a breakout in either direction. It’s difficult to predict which direction, even for experts, but with the 21/50/100/200 EMAs on the 4 hour chart all converging into a tight range of just $30 yesterday, a breakout was highly anticipated. The convergence of EMAs act as a coiled up spring that suddenly explodes into a price spike, I have observed. Particularly if volume is shrinking with time. And it appears to be playing out today. Let’s keep an eye on developments, though I’m not calling a bull run by any means just yet. There is strong resistance around $7850 that needs to be broken still. That also marks the 100 day EMA.
Most of the top 30 altcoins are up in value against Bitcoin. Doge, for example is up over 10% today, with IOTA DASH and Monero up around 6% in BTC value, and considerably more over the past week. So this could account for much of the altcoin rise in dominance overall. Is this really an indicator of an alt rally now? I will leave it to you to decide. The potential is there and we are probably all longing for it. The conditions are right for it too, with Bitcoin so flat. So don’t lose sight of the prize guys, now may well be the time for your coin to shine. Catch those waves and you too can be a silver surfer, riding your coin to the moon. In this crypto market anything is possible, so be sure to dream big. I certainly do.