Hix0n's Crypto Pandemonium #4
Is there a chance to see green again, degenerate? There certainly is. Join me and light up a few candles, or choose your preferred smoke. Today, we are summoning "Uptober."
Bullish period on the horizon: Uptober?
After what seemed like an endless period during which many participants of the crypto market fell victim to the merciless clawing of a ruthless crab, we are finally seeing the dawn of better days - or more precisely, "more volatile times."
Over the last few months, several important indicators have been signaling a turnaround, especially if Bitcoin manages to close the current 5-day chart above the price of 25,800 USD. This would confirm the upward turn of the Stochastic Momentum indicator, once again giving the ball back to the bulls and significantly increasing the chances of a green October, i.e., Uptober.
After all, historically, October is a much friendlier month for risky assets compared to September.
"If this setup on the 5-day chart combined with the Stochastic Momentum indicator is confirmed, we have an official bullish signal. Statistically, we see the possibility of an average price movement of 47% with a standard deviation of around 7%, and from a time perspective, we are looking at an average of 37 days, roughly up to mid or possibly the end of October." Eric Krown
For a more detailed understanding of this analysis, Hix0n recommends watching at least these 2 videos from the Quant with capital Q, Eric Krown:
1.
2.
Macro Developments
This Thursday, we eagerly anticipate the regular FOMC show from the Federal Reserve's chief, Jerome Powell.
What can we expect?
The current consensus suggests that there's approximately a 93% chance of no rate hike. Additionally, the public expects that even if there's another 25 basis point rate hike, it would be the last in this inflationary cycle.
Good news:
now that we know where the consensus stands, any deviation from these expectations can be considered a volatility boost, either bearish (threats of multiple hikes or mentions of a prolonged hiking cycle) or bullish (confirmation of the end of rate hikes).
The highest probability is for a relatively uneventful FOMC meeting.
However, subsequent meetings will gain importance as they could provide answers about the end of rate hikes, thus approaching the fabled FED pivot point.
DXY Recedes: Another Confirmation of the "Uptober Theory"?
A strong dollar isn't favored by risk assets.
The DXY has been strong since the end of July, roughly the same period during which the crypto markets have been weak. We can now expect a temporary weakening of the dollar, which would be another factor supporting (at least temporarily) a green crypto market until mid to late October.
USD + USDT Liquidity On The Rise
The Uptober theory is further bolstered by the currently rising USD liquidity, with Tether joining the surge by minting a substantial volume of USDT tokens.
ETH/BTC: Bitcoin Maxis Currently Leading
Even if the Uptober theory proves true, for us to witness significant and sustainable price action in the altcoin sector, we first need to see a reversal in the currently declining ETH/BTC price ratio.
However, if you've noticed the recent euphoric posts from Bitcoin maximalists on social media, you'd surmise that the ETH/BTC bottom might be near.
For instance, you might've seen ridicule about Ethereum and the fact that due to low activity, ETH is currently in an inflationary stage. Yet, if we compare the inflation of Ethereum and Bitcoin from the Merge point, or the transition to Proof of Stake, the situation appears differently.
Bitcoin dominance: reversal in favour of ETH inbound
Furthermore, for the Bitcoin Dominance chart to show a long-term upward trend, it needs to surpass 51.6% (currently at 50.23%), overcoming the recent rejection around 52% on the monthly chart. The chances are currently higher for a trend reversal and thus a decrease in Bitcoin's dominance.
Uptober and Beyond? Max Price Targets for Q4
If the Uptober theory holds, we must anticipate that we might still be far from a genuine bull market. Various bearish factors and FUD are looming, waiting for the right moment:
Binance faces issues, the macro winds are unfavorable, the inflationary cycle isn't over, a western recession threat persists, indexes show bearish divergences on weekly charts, the stablecoin market cap keeps growing, we're post a long meme season, and the western world is experiencing a historic credit bubble.
If we're to witness the last green candles of 2023, when should we start looking into fiat and prepare for the inevitable FUD period?
Simply put, if we break the $30,000 barrier again, there's an opportunity to head towards at least $35,000 and at most $40,000.
However, if the statistics mentioned in the first paragraph are disqualified, be prepared to change strategies. React swiftly.
Japan's Largest Investment Bank Launches a Bitcoin Fund
Is Bitcoin starting to respond positively to bullish news again?
Yesterday, it was revealed that Japan's largest investment bank, Nomura, is preparing to offer Bitcoin products for institutional investors.
Interestingly, if we see more bullish news associated with positive Bitcoin price action by the end of August, the Uptober theory will further solidify.
Conversely, if the price remains stagnant despite positive news, it's a typical sign of overall weakness and an impending drop.
Is the End Near for Binance US?
The mentioned FUD surrounding Binance, dominating recent headlines, is particularly grounded in the resignation of senior positions from Binance US.
Is there a complete withdrawal from US soil, where Binance has been under regulatory scrutiny for a while?
Time to go home, CZ; China is calling…
The BNB chart reflects the situation.
However, a counterargument to the Binance FUD is the ever-present China factor. China has become more crypto and Web 3 industry-friendly since the beginning of the year. If Binance's main competitor is Coinbase, based in the US, China might very well protect its "home" exchange and not allow it to be taken down by its main Western competitor.
In line with the threat of Binance’s end, one can't help but monitor Open Exchange (OX)
Open Exchange might serve as a wildcard investment in case the Binance FUD narrative materializes:
at that point, the narrative will immediately start looking for a potential replacement, and Open Exchange is relatively well-prepared for this moment as a project.
It's worth taking a closer look at Open Exchange anyway; the epic journey of the degenerate and egomaniac Zhu Su to regain lost glory and admiration from the crypto scene should not be underestimated.
At the same time, the market volume of decentralized exchanges like GMX has indeed risen sharply during 2022-23, but when compared to CEX volumes, it's still negligible.
The accumulation zone in this case is clear, and there might be a deviation below support. If the market enters another final phase of punishing altcoins, a drop and the creation of a lengthy accumulation in the price zone below the marked support cannot be ruled out.
Sale of FTX tokens: Overhyped FUD
September 13th is behind us and, to the world's surprise, the altcoin market didn't collapse under the anticipated extreme selling pressure from FTX holdings.
Overall, it seems we can dismiss the FTX FUD. The selling pressure from this event will be negligible, and the team handling it plans to strategically offload tokens in a way that avoids exaggerated price drops and subsequent slippages:
Conclusion
"Rektember" is almost over, and it seems that, if the "Uptober" theory materializes, we might witness more market volatility in October.
However, remember this fellow degen, to consider all the mentioned statistical conditions and factors that play a role in whether this scenario truly unfolds.
Remember, in this game, there are no certainties, only mere probabilities.