The Calm Before a Transformative Storm
|By Alex Benfield|
I’m back at my desk after another lively Weiss Investment Summit. It was an amazing event, one that brought in guests and speakers from all over the world.
Chris Coney made the trip in from the U.K., Jurica Dujmovic came in from Croatia and Juan Villaverde came all the way from Spain. We all had a great time exchanging ideas with attendees, many of whom attended our first-ever Summit in 2022 as well.
Many of the ideas our Weiss Ratings experts shared this week will remain exclusive to Summit-goers. But there are plenty of big themes that are shaping up that can benefit us all.
One takeaway for me was that more people are interested in, and even trading, cryptos than last year. And that’s despite the crypto market continuing its trend of low volatility and tight trading ranges while we were away.
One reason why is the market is currently awaiting the arrival of more spot Bitcoin (BTC, “A-”) ETF applications … and their potential approval. As we’ve been discussing, this could be the biggest potential price catalyst waiting in the wings.
Outside of the ETF chatter, there doesn’t appear to be any bigger narrative in the crypto market right now. Not even inflation, interest rates, nor anything else.
Keep in mind Juan Villaverde’s original prediction for 2023. Based on his research and the Crypto Timing Model’s signals, he forecast a bullish first half of the year followed by a price correction before year-end.
The next crypto bull market isn’t slated to pick up until sometime in early 2024. That means we can expect more neutral and slightly bearish price action before the end of the year.
However, there will be some good buying opportunities before 2023 ends. And if the Bitcoin ETFs win approval, we should see a huge rush back into crypto that will add fuel to the next bull run.
The past few weeks, we’ve seen prices hold steady, even after we got the good news that Grayscale won its lawsuit against the SEC.
This neutral price action could last a bit longer. But at some point, BTC should test out some support levels, potentially even the critical $20,000 level.
As long as BTC remains above $20,000, we expect the incoming correction to be the last major price weakness before the next bull market.
Here’s BTC in U.S. dollar terms:
Meanwhile, Ethereum (ETH, “B”) has been fighting to hold the $1,600 level after dropping below its 200-week moving average in the past week.
More likely than not, a correction is coming for ETH. The next obvious level the bears will look to test is the March low of $1,450.
Here’s ETH in U.S. dollar terms via Coinbase:
The next major level of support below that is $1,300. However, ETH could find some buyers before then.
To the upside, we’re paying attention to the $1,650 level and then the $1,750 level. That $1,650 represents the bottom of the previous trading range, and $1,750 is the top of that range.
Like Bitcoin, Ethereum could also have ETFs in the not-too-distant future. Just recently, Cathie Wood’s ARK Invest filed an application to create a spot Ethereum ETF.
We don’t expect that one to get approved anytime soon. But this does show us that we’re looking at what could turn out to be the first round of ETF applications. We could see a lot more, especially once the first ones get approved.
While right now Bitcoin is paving the way on the regulatory front for the rest of the industry, Ethereum is likely to follow right behind.
We will be hot on both of their trails. So, stay tuned for that and much more.
Looking at how bullish our Weiss Investment Summit attendees are on crypto — even among those who don’t invest in it … or invest in it yet — one thing is becoming increasingly clear.
That is, the world of cryptocurrency stands on the edge of significant evolution.
The current low-volatility environment is simply the calm before a transformative storm. As Bitcoin charts its course on the regulatory front, it paves an invaluable pathway for its crypto peers.
ARK’s pending ETF application showcases evolving confidence in individual crypto assets AND suggests an evolving maturity of the entire crypto market.
Yet, as with any nascent industry, patience remains a key virtue for investors.
The ongoing neutrality in the market doesn’t indicate stagnation. Rather, it represents a period of consolidation.
This is a time where the market is finding its footing amid external factors, regulatory decisions and investor sentiment. It’s paramount for investors to look beyond the immediate lull and appreciate the underlying current of change.
It’s gaining momentum. And that means now is the time to get — and stay — on board the crypto train. It won’t be slow-moving for long.
With potential catalysts like Bitcoin ETFs on the horizon, coupled with increased institutional interest, the crypto space is gearing up for what could be its most pivotal phase yet.
Buckle up for a promising 2024. And, as always, look to your Weiss crypto experts for opportunities to turn that promise into profit potential!