Welcome to another Crypto Weekly Digest brought to you by VirtualBacon.
This week we're focusing on the anticipated altcoin rally expected for December. Recent market trends and chart analyses suggest that a significant uptick in altcoin activity is on the horizon, following an initial surge in early November. We'll examine key indicators, including Bitcoin's price movements, its dominance in the market, and the overall market cap of altcoins, to understand the dynamics of this potential rally. Our deep dive won't just stop at individual altcoins; we'll also explore the sectors poised for significant growth in December. As with every week, we'll conclude with a snapshot of market movements and pivotal project developments that have surfaced.
Bitcoin is exhibiting promising signs of an uptrend, potentially catalyzing a major altcoin rally in December. Since early November, Bitcoin has demonstrated higher highs and lows, indicating the start of an uptrend. However, a sideways trend followed, marked by choppiness and uncertainty. The recent Binance controversy led to a significant Bitcoin drop, but a subsequent strong rebound suggests a new uptrend.
For this breakout to persist, Bitcoin must maintain key levels, particularly on the 4-hour and daily timeframes. A daily close above $37,500 is crucial for bullish confirmation. If this holds, along with positive weekly and monthly closes by November end, the trend is likely to continue. Altcoins, which haven't yet responded to Bitcoin's rise, are expected to catch up, creating a conducive environment for traders in December. Despite recent challenges, staying bullish and patient could be rewarding as we head into a potentially more favorable trading period.
Currently, Bitcoin dominance is a key indicator of the altcoin market's performance. A decline in Bitcoin dominance typically signals a robust altcoin rally, while its increase or stability suggests Bitcoin's outperformance. From late October to early November, we saw Bitcoin dominance drop until around November 9th, marking a thriving period for altcoins.
However, for the following two weeks, Bitcoin dominance leveled off, making altcoin trading challenging for momentum-driven traders. A crucial threshold to watch in Bitcoin dominance is 51.8%; breaking below this could signify a clearer altcoin season.
Total Altcoin Marketcap
Additionally, the total market cap of altcoins (excluding Bitcoin and Ethereum) has been consolidating around the 400 billion resistance range. If Bitcoin's rally persists, we might see this cap approach or surpass 450 billion, potentially initiating a significant uptrend for altcoins.
Solana presents two trading opportunities. Short-term traders can capitalize on its recent dip due to the Binance fiasco. With Bitcoin's 6% rally, a quick bet on Solana could target recent highs around $66, setting a tight stop loss near $54-$55. This bet hinges on immediate market confidence mirroring Bitcoin's recent peak.
For a medium-term view, if Bitcoin's breakout sustains, expect altcoins like Solana to follow suit. Since late October, Solana's potential move could be significant but unlikely to match the previous 80% surge.
Entering around $58 with a stop loss just below $50, targeting initial gains at $66 and extending to around $78, offers a favorable risk-reward ratio. This $78 target aligns with Solana's last consolidation before major market shifts in early 2022, making it a strategic medium-term profit-taking point.
Avalanche shows that a similar medium-term strategy to Solana can be applied. For those looking to capitalize on its current position, the entry point is around $21. Setting a stop loss slightly below the recent low, at around $18.5, safeguards the position. The initial target for profits is set at $29, aligning with the resistance level during the July rally.
For a more ambitious target, $39 is the next level to aim for, reflecting the resistance from the March and August 2021 bull market consolidations. This medium-term strategy for AVAX, especially in the context of a strong Bitcoin market, is one I've already committed to in my portfolio.
Solana and Avalanche are currently the top two Layer 1 altcoins I'm focusing on, as long as Bitcoin maintains its strength.
For Polygon, there's an intriguing setup unfolding, especially when compared to Solana and Avalanche. Unlike the immediate entry I made with AVAX and SOL, MATIC required a more cautious approach due to a head and shoulders pattern indicating potential resistance at 79 cents. Anticipating a dip for a better entry point, I aimed for 74-76 cents. This plan materialized perfectly, with MATIC dipping just below 76 cents, prompting my entry at 75 cents.
For short-term traders, a stop loss just under 71 cents with a target of around 86 cents could be viable. However, my sights are set higher, targeting between 95 cents and $1.18. These levels, dating back to the 2022 bear market rallies, offer a substantial upside of 23% to over 40%, against a modest 7% downside risk.
This trade's high risk-reward ratio makes it a compelling choice, aligning with the broader market's bullish momentum.
Arbitrum's recent pullback created an attractive entry point, leading me to initiate a position. Although the token attempted a breakout at $1.17, my strategy was to enter on a dip, ideally around $1.05. Successfully securing a position, there are two approaches to consider:
Short-term trade: Set a tight stop loss just below $1, aiming for a modest gain towards $1.12 or $1.18, aligning with recent highs.
Medium-term perspective: For those eyeing a longer uptrend, placing the stop loss around the recent low of $0.93 and targeting a more ambitious gain in the range of $1.30 to $1.40 makes sense. This trade setup offers a wider profit margin, with the stop loss positioned just below the recent low and take-profit set towards significantly higher levels.
In summary, Arbitrum's current trajectory suggests a promising medium-term trade opportunity, balancing a reasonable risk with a profitable upside potential.
XRP stands out as a potential key player in the upcoming altcoin wave. Here's the breakdown:
Past Performance: In late October, XRP led the market with a 50% rise in two weeks. However, it experienced a 50% retracement during the consolidation phase of leading altcoins like Solana and Chainlink.
Current Outlook: XRP is forming a cup-and-handle pattern, suggesting an upward trajectory. A break above the crucial 62 cents level could trigger a significant rally.
Risk-to-Reward Analysis: With a current stop loss at around 56 cents (approx. 8% downside risk) and an initial target of 72 cents, XRP offers a favorable risk-to-reward ratio. Higher targets around 81 cents could further enhance this ratio.
Legal Developments: The ongoing SEC case and a new settlement deadline set for December 23rd add a speculative angle, aligning with the potential rally period.
In summary, XRP's past leadership in rallies, coupled with current technical patterns and upcoming legal developments, makes it a noteworthy candidate for medium-term investment in the evolving altcoin landscape.
Chainlink is a notable altcoin with potential for significant gains. After lagging behind others like Solana and Avalanche since November 9th, I anticipate its rally to resume.
My entry into Chainlink was at $14.50, with a stop-loss set at $12.60, just below recent lows. Short-term, I'm targeting a revisit of its recent high around $16.40. However, for a medium to long-term perspective, profit-taking between $18 and $25, averaging around $21, seems viable, offering a 3.2 to 1 risk-to-reward ratio.
These levels are significant, having acted as key support and resistance points in past market cycles. As Bitcoin’s uptrend continues, I expect Chainlink and other major altcoins to follow, making this a promising trade to watch.
Gaming Altcoins: A Hidden Gem for December
The gaming sector in the crypto world is showing substantial strength and potential, particularly for the month of December. Regardless of individual views on its fundamental investment value, the performance of gaming-related cryptocurrencies is noteworthy.
While top altcoins have shown impressive rallies, even medium-cap tokens in the gaming space like STEPN, Illuvium, and Ronin have seen significant gains of 20-30% recently. More robust coins like Echelon Prime, Immutable X, and others have also experienced notable uptrends. This momentum, including the substantial rise of infra coins like Beam, suggests that gaming and AI-focused tokens could lead the market in December.
For those seeking opportunities beyond large-cap altcoins like Solana, Chainlink, and Avalanche, medium-term investments in gaming altcoins in the $100 million range, with potential to reach higher market caps, seem especially promising. This sector is ripe for investors looking to tap into the next wave of significant growth. Let’s dive into some of my top picks in this sector currently.
SuperVerse, a standout in the gaming sector, has experienced a remarkable breakout recently, surging from 14 cents to 35 cents since November 20th. This uptrend was flagged early on my Twitter and in our Discord community, highlighting its potential before the rally.
The coin, part of the Neo Tokyo and ElioTrades community, taps into a robust crypto gaming network. While related tokens like NEOTokyo's BTES led initial rallies, SuperVerse's established presence across major exchanges like Binance presents a more accessible and scalable opportunity.
Anticipation is building around SuperVerse's upcoming rebrand and expansion, teased by Elio in a recent Crypto Banter appearance. These developments could position SuperVerse as a frontrunner in the December gaming altcoin surge. With solid conviction in its trajectory, SuperVerse is not only a key player in my 2024 portfolio but also a prime candidate for leading this sector's growth.
Terra Virtua, a notable gaming altcoin with a focus on NFT collectibles, presents a compelling opportunity. Popular during the 2021 boom, it experienced a significant price dip but is now rallying due to a strategic rebranding and token migration.
The current TVK token will transform into a new layer-one chain token named Vayner, supported by major exchanges like Binance and Bybit. This migration mirrors the successful playbook of Mirror Circle's transition to Beam.
I'm maintaining my position in Terra Virtua, anticipating positive outcomes from this change. The migration is expected by month's end, with pre-staking already underway. For the latest updates on this pivotal migration, keep an eye on Terra Virtua's Twitter announcements. This development could trigger a surge of interest and potentially propel Terra Virtua into a leading position within the gaming sector.
New Altcoins to Watch
In December's altcoin cycle, new projects may emerge as significant players. Keep an eye on:
Shrapnel: An AAA-level Web3 game supported by popular Twitch streamer Myth. Despite a quiet launch on KuCoin, it rallied almost 3x, signaling potential for similar stealth launches.
Inspect: A Layer Two extension for X and Twitter, offering an integrated Web3 experience without leaving the platform. It aggregates crucial data and analytics, enhancing the social media experience. Its launch is anticipated in early December. As an investor, I'm committed to supporting Inspect for at least a year.
Access to these new altcoins typically comes via private sales or launchpads. Launchpad participants often receive tokens sooner than VC investors, offering an advantage. If you miss these initial offerings, watch for public sale valuations as a potential entry point.
Altcoin Market and Project Updates
Now, let's check out the major altcoin gainers and losers from the past week, and catch up on key project updates.
Best Performing Coins of The Week
Worst Performing Coins of The Week
🟠 dYdX used $9M from its v3 insurance fund for YFI market liquidations, leaving $13.5M in the fund. User funds were unaffected; investigation ongoing.
This week, we delved into the potential for an altcoin rally, underpinned by Bitcoin maintaining its recent breakout above $37,500. We've observed key altcoins like Solana, Avalanche, Matic, Arbitrum, Chainlink, and XRP, identifying potential in their movements as the market transitions from a phase of uncertainty to a more defined trend. The gaming sector, particularly SuperVerse, has also been highlighted as a notable area of interest. Additionally, we've spotlighted emerging altcoins poised to make an impact this month.
As always, we've also taken a look at the altcoin market's biggest movers, alongside the key project updates from the past week. Stay informed and prepared for what's next in the dynamic world of crypto.
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