BREAKING: The Bear Market Has Started!
Altcoins are officially in danger, but Bitcoin still has a shot to escape.
With March behind us, the monthly chart paints a grim picture. Altcoins are entering a bear market!
Why do I make this post now?
Because the evidence is too big to ignore. Let’s look at a few key examples and then end with Bitcoin which continues to be decoupled from the rest of the market.
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If you like to analyze price action, a good practice is to always check the charts after each month ends. This is because you need to wait for that monthly candle to close before you can accurately analyze it.
We’re now in early April and March just closed.
The problem?
March closed in red across major altcoins and follows February which ALSO closed in red. While Solana only closed its second consecutive monthly candle in red, Ethereum closed its 4th!
If Ethereum is a good proxi for most of DeFi, Solana is a good proxi for everything else. These two altcoins give a major bearish signal that spans the entire altcoin space!
Pictured below is Solana with two monthly candles that closed in red this year. The last time this happened was in 2022, and soon after, a prolonged bear market followed.
Moreover, Solana may soon confirm a three black crows formation, or three consecutive monthly candles in red. Such a pattern would signify a major change in price action and may predict the reversal of an uptrend.
That would signal the end of the altcoin bull market and the start of a bear market!
Surprise!
Ethereum already confirmed a three black crows formation back in February. But since nobody is interested in Ethereum, it was mostly ignored. However, we cannot ignore it on Solana as well and the remaining signals that follow.
The biggest red flag is the monthly MACD. This lagging indicator shows a clear bearish cross on Ethereum and Solana!
This ONLY happens at the start of a bear market.
While it was easy to dismiss Ethereum, we cannot dismiss Solana. Taken together, the message is clear. The market is changing and it may take some time until it is felt across the board.
The last time Ethereum saw a bearish cross like this, we ended up with a bear market that lasted more than 18 months! See the below chart.
Interestingly, BNB and DOGE are closing in to a monthly bearish cross as well, while XRP and ADA will need more time. This shows that the market is in different stages with Ethereum leading the way and now Solana a close second.
Eventually, I expect most altcoins to follow and catch-up with ETH and SOL since this bearish momentum is hard to change on such a high timeframe.
Bitcoin is also quite some distance away from a bearish cross. I’d put it at 2-3 months from now. However, for Bitcoin, there is still a chance that it continues higher. The same cannot be said of ETH or SOL at this point.
What will happen to Bitcoin?
As long as the monthly MACD does not make a bearish cross, I remain bullish on Bitcoin which has been decoupling from altcoins since early 2024 (due to the BTC ETFs going live). There is still a chance that it may end up acting like gold which has been breaking record after record due to the uncertainty in global markets.
The current decoupling from altcoins could accelerate if market participants start seeing Bitcoin as a hedge to global risks which have been made worse with Trump applying tariffs on almost all trading partners yesterday = trade war started. Surprisingly, this could turn out bullish for BTC as explained below.
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Some analysts (like Arthur Hayes) expect the US Federal Reserve to start printing fresh money via a renewed quantitative easing campaign this summer to address the liquidity needs of a struggling market.
If China and other countries will not buy US debt or treasuries due to the ongoing trade war, someone has to. That’s where the US Fed enters the picture. They can print fresh money in any quantity and be the buyer of last resort if need be. This liquidity could also end up going into Bitcoin and to save a falling stock market.
Right now, Bitcoin is still seen as a risk asset and risk assets are sold in times of uncertainty to access liquidity, but that may change later. If a bearish cross happens this summer, then this cycle is most likely over and we need to endure a new bear market that can last anywhere between one to two years.
Buckle up. The ride ahead is going to be bumpy.
I will be with you every step of the way whatever happens. You can also leverage inside knowledge shared by our hundreds of Patrons that have first access to market alpha. This is why I invite you to be on our Discord to not miss out as the market develops this year.
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I don't agree with you except for some rodent animal meme coins ;)
I think we just need to be patient, most bad news are now hopefully priced in.