Bitcoin’s Next Move Is Critical to Keep This Rally Running
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| By Juan Villaverde |
I’m on the edge of my seat right now.
For the past day, I’ve kept an eagle eye on the No. 1 crypto as it plays jump rope with the incredibly important $100,000 level.
That’s because, while Bitcoin (BTC, “A”) started this rally with flair — rocketing up from roughly $67,000 on Nov. 4 — its recent stagnation has been concerning.
While its run up to the $90,000 range was smooth sailing, BTC soon stalled just under $100,000. And when it halted, many other industry stalwarts, like Ethereum (ETH, “A-”), Solana (SOL, “B+”) and others, did, too.
In fact, crypto as of late has been a tale of two markets: Leading crypto assets including Solana, Ethereum and others were setting new cycle lows.
Meanwhile, old and largely forgotten-about altcoins were rallying by double-digits every other day.
Price action like that often leads right up to critical cycle tops. Especially when leading assets begin to head south while assets with little or no fundamental value surge by several orders of magnitude.
It was enough for me to grow worried. Especially after I noticed what is happening with global liquidity — more on that in a bit.
Then, Bitcoin moved past $100,000. And it put my mind at ease to a large extent … for a bit.
But we’re not out of the woods yet.
Rallying past $100,000 is nice and all. But Bitcoin couldn’t hold this level for more than a day. That’s significant.
BTC MUST hold this level as we head toward the end of the week to restore health to the crypto market.
After a sharp correction late yesterday, Bitcoin has spent most of today clawing its way back from $96,600 to that $100,000 level. As of my writing, it’s trading near $99,300.
Why am I growing concerned? Why do I say Bitcoin now needs to reclaim and hold this key level?
Because of the altcoins that are rallying while BTC corrects.
See, this hasn’t been your typical altcoin rally. Historically, those are when new, up-and-coming cryptos surge into the spotlight.
But this latest round of bullishness in altcoins was largely led by old names. Many of which were abandoned during the last bull market.
Now, these “dino-coins”— crypto relics from eight or more years ago — are having their best run since 2017. Since Bitcoin stalled on Nov. 21 …
- Ripple (XRP, “B”) is up 130%, and over 400% since Trump’s election win.
- Curve (CRV, “D”), the Curve exchange token — and historically one of the worst-performing assets in any crypto cycle — is up 176% since Nov. 21. And about 400% since Trump’s victory.
- Litecoin (LTC, “B-”), the original dino-coin, is up 50% since Bitcoin’s Nov. 21 halt, and over 100% since the election.
Some observers cheer these moves, claiming they reflect newfound fundamental strength in these projects.
Spoiler alert: They don’t.
And I don’t want you to get caught up in the hype surrounding them. Let me explain ...
Of these three, only CRV has any genuine fundamental value. But even that comes with a massive asterisk: At 20% annual inflation, it is one of the most inflationary coins in crypto. That leads to long-term underperformance relative to its peers.
As for XRP and LTC? Their time has long passed.
XRP’s surge is particularly shocking, because it has now overtaken Solana to become the third-largest crypto asset by market cap.
The reason? SEC Chair Gary Gensler is expected to step down after Trump’s reinauguration.
Sure, Ripple has been locked in a legal fight with Gensler’s SEC. And yes, his departure would likely improve Ripple’s prospects.
But the real problem is that owning XRP isn’t like owning shares in Ripple.
XRP is purely a utility coin. But with almost no utility!
A decade ago, XRP was conceived as a solution for cross-border payments. Yet, to this day, Ripple has failed to deliver meaningful results, SEC battles notwithstanding.
Even outside the U.S. (where the SEC has no authority), Ripple’s efforts to introduce XRP as a liquidity tool have been underwhelming.
So, like LTC and CRV, the recent price action of XRP is not tied to crypto fundamentals.
All three are purely speculative.
That’s why — in every type of market — it’s vital to remember that crypto’s most important fundamental is global liquidity.
It’s the fuel behind any crypto bull market.
And lately, it’s been going down, not up.
Indeed, the decline has been sharp enough that some liquidity analysts are warning of an impending correction.
- This happened in December 2017, and the bull market ended a month later.
- It happened again in April 2021. And a month later, the altcoins crashed 50%.
Now, here we are again.
To be clear, I’m not saying: “Sell all your crypto.” But consider this a warning: recent market behavior has been unhealthy. And it almost always ends with severe altcoin crashes.
We may take comfort in the fact that Bitcoin finally poked above $100,000 with authority the other day.
However, BTC falling back below this level is a concern. If it can reclaim the high ground above this key level and hold it with authority, we can all breathe a little easier.
Because an untimely end to this epic crypto rally will have been averted.
If Bitcoin can’t move with confidence over $100,000, however, then it is possible that we could see the altcoins that have begun to take off … fall back down to Earth.
This is the crazy volatility of crypto. So, hold on tight. And keep checking in with us each day in Weiss Crypto Daily.
We’ll make sure you have the most actionable updates so you can navigate this wild market.
Best,
Juan Villaverde
