TL;DR all eyes are on $3,200.
We’ve said it before, and we’ll say it again: the 200 weekly moving average is where traders have drawn their line in the sand. Right now we’re just a couple of hundred dollars above it, if that. We expect strong support in the $3,000–$3,200 zone, which has a cluster of factors in its favour. What happens after we hit that – and while there are few certainties here, this is one of them: we will revisit it – we won’t know until we get there and see the market’s reaction.
Right now the charts are very bearish, and sentiment is absolutely horrible. That points to a downward move, but remember: when it’s as bearish as it can possibly get, that’s when the trend changes. Be prepared for that moment when it happens, as it must. We just don’t see it happening quite yet.
As the bear market grinds on, we have a few hopeful predictions and a slew of pessimistic ones. Entrepreneur Alex Melen suggested that ‘Last time the 50 and 200 average crossed on the 4 day chart was at the bottom of last bear market.’ The same has just happened. In fact, the crossover slightly lagged the bottom in 2015, and so this fits quite well with the picture this time, with the crossover lagging the fall to $3,100. However, it’s not all that convincing given the broader picture of low volumes and wider bearish indicators.
Another prominent trader and bitcoin analyst, Murad Mahmudov, believes steady support will ultimately be found at the 300 WMA, around $2,300, with a wick to the 400 WMA around $1,800. His Twitter thread contains a wealth of insight about the evolving market and progression in the MAs that have acted as support over time. It’s worth reading, but realistically, there’s too little data to be sure of anything. Then we have Vinny Lingham, Civic CEO, who has recently tweeted: ‘If we break below $3,000 for bitcoin, crypto winter will become crypto nuclear winter.’
In more positive news, Fidelity have announced the potential launch of their custody services in March. A lack of suitable solutions for storing crypto securely has been one of the factors preventing institutional investors getting into the bitcoin space. Fidelity works with over 13,000 financial institutions and has over $2 trillion under management. A lot can happen in two months, so there’s no telling what the state of the crypto markets will be, but we will see whether institutions have the confidence in digital assets to start scaling in. The CBOE has also just re-submitted the SolidX-VanEck bitcoin ETF proposal that was so recently pulled due to the government shutdown. But it doesn’t simply pick up where the old one left off. A new 240 day period will now start, meaning it could be almost the end of the year before a decision is finally made.
At the other end of the spectrum, bear markets are the time when the next generation of projects build the foundations for the next cycle. We have featured a number of small projects on Crypto Inferno that we think have strong fundamentals. One of these, Soniq, has been busy building on the demand for decentralised music applications. Soniq’s app will run music competitions, and anyone can participate as either musician or judge. Judges vote with small amounts of Soniq tokens, and the more votes a musician receives, the more likely they are to win. Judges are also rewarded for their activity and picking the winner.
Soniq’s app is in development but they are currently testing the idea with a contest on Instagram. The team reached out to 1,000 musicians last year. 300 responded and wanted to participate to win Soniq tokens. With no promotion the project now gets hundreds of thousands of views and impressions. A new contest has now been launched on Instagram with higher rewards, with the aim of introducing cryptocurrency investors to the concept and to promote participation. Check out Soniq’s website for more details. We firmly believe that the projects that bootstrap with little or no funding in the fire of the bear market will be very strongly positioned for the turnaround, when it happens.
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