Market Update: A Cautious Approach, But Opportunities Lie Ahead

I won’t sugarcoat things too much here. The market isn’t looking great, and as long as the yearly open at $93k remains resistance, I expect to see lower prices ahead.

That being said, there’s still room to analyze the situation and figure out how long we might have to wait for some clarity on what the market will do next. There’s a chance that the market could revisit the $55k zone, potentially re-entering the initiation phase of the impulse move. With the current range breakdown and retest (just now), the likelihood of this increases. Whether we see new yearly lows or establish a new range between $78k and $92k, the key takeaway is to play the moves as they unfold until new signals point to a trendier market.

Here are some critical dates to keep in mind. I’ve been stressing on Discord that we’re still ranging or in a downtrend until the current expirations. Keep in mind that while expiry doesn’t guarantee an immediate price reversal, it marks a psychological time point where the market structure could begin to shift.

Let’s break down what I see and why I’ve been quieter since we hit the first monthly target at $107k. It would have been nice to short from up there, but my permabullish view clouded my judgment.

Bitcoin Dominance (BTC.D)

Bitcoin dominance is currently trending in its favor for obvious reasons, but what’s important here is the momentum it’s been building after each trend expiration. Since breaking out of a 2-year consolidation period from May 2021 to May 2023, Bitcoin dominance has continued to range for about 14-15 weeks before making new highs.

At the moment, we’re at the third attempt to maintain this 15-week cycle, which expires on April 28th. So, expect BTC to continue outperforming the market for the time being.

For altcoins to gain momentum, we’ll need a break below the current POC (Point of Control), which sits around 57% dominance. The beauty of Bitcoin’s strength lies in the fact that every time the trend is about to expire, a new one seems to emerge within a 2-week period. By the end of the expiry on April 28th, there’s a possibility of a new trend pushing BTC dominance even higher.

Using the Time@Mode methodology, the best approach is to wait for confirmation at the expiry time. With this type of trend, it’s important to note that we’re trading beyond the expected time at the base of the monthly mode, and the market has shifted to trade based on smaller modes as it continues to push higher. Essentially, this trend is getting overextended.

It’ll be interesting to see if BTC dominance reaches 72% before any retracement, but I’m leaning more toward a range between 65-68%. For now, the trend is still active, and it’s better to stick with it.

ETHBTC

ETHBTC has been a bit of a joke since the market bottomed in December 2022, as it’s been in a steady downtrend. It only took three months to trigger a bearish signal, which has continued to this date.

However, this downtrend is set to expire in April, aligning with the Bitcoin dominance expiry, so there’s a glimmer of hope. The potential for a reaction — not a full reversal, but maybe a short-term bounce — could be in the cards by end of April.

What makes me think a reaction could happen is the context of the previous drop and where the market is sitting now. The drop was quicker and more aggressive than the previous one, hitting the target before the expiry time and reaching oversold territory. The current level is also well-supported based on past data.

For me, 0.023 will be the key level to hold if we’re expecting a bounce. Based on the monthly timeframe, there's little chance of the downtrend continuing from the current price action. From a technical standpoint, it's more likely to see a bounce or several months of sideways movement before the downtrend resumes. For now, this level should hold.

Others Index (OTHERS)

The Others index is at a pivotal area, with the potential to dip into the $200B range. This chart confirms that altcoins are still in a downtrend until at least April 7th. There's a chance we see a continuation toward the range lows just below the $200B mark due to the prolonged lack of positive movement.

For now, accumulating altcoins is not ideal. The trend is still down (short term), and it’s better to wait until post-Q1 for any substantial opportunities.

USDC + USDT Liquidity Chart

This chart has been quite accurate in predicting liquidity inflection points in the market. If the previous charts align, we can expect a bit more upside here. Why? It’s currently above the midpoint of its range, which logically suggests a push toward the higher end of the range before any significant weakness.

It recently tapped the range low with an SFP (Swing Failure Pattern), so we might see a similar move to the upside above 8%. There’s a small trend pushing prices higher, which will expire during the week of March 17th, but it has the potential to generate a continuation signal due to the accumulation of bars at this level.

Conclusion

The short-term outlook isn’t looking promising, but there are still opportunities to capitalize on if we remain patient and wait for reversal signals after Q1. Bitcoin and top altcoins like ADA, XRP, and LINK are still showing bullish signs and remain at the top of my trading list. I’ll be posting a more detailed article this week on these coins, outlining what to look for as the market shows some weakness.

In the short term, things look grim, but the long-term could offer some solid signals for continuation.