Crypto Fire Alarm | Navigator
Review Date: Friday, April 29, 2022
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Market Update: Fire Alarm | Navigator
BTC Daily Chart
It is time to return focus to the head and shoulders top on the daily bitcoin chart. This topping pattern took 155 days to form fully. The pattern was confirmed in mid-January. Bitcoin should reach the head and shoulders top target 155 days after forming. Using this math, we estimate bitcoin could fall to the pattern’s target at $20,000. This move could unfold during May and the first half of June. The theory shows that the pattern should complete itself by June 14.
ETH 4-hour Chart
On the ETH 4-hour chart, Elliot Wave work suggests a very sharp downtrend could be starting. The wave count shown on this chart points to the start of a 3-wave. A 3-wave is usually a noticeable trend that moves nearly straight in one direction. In this case, that would imply a down move. Looking at short-term tactics, if ETH can not rally back above $2,818, that could be a sign the three-wave could begin.
BTC 4-hour Chart
Looking at the 4-hour chart of bitcoin, $38,301 supports. If BTC is above that, bitcoin could be stable. If BTC is below that, there is a risk of a move to either $36,000 or $35,000.
Total Crypto Market Cap Minus Bitcoin (TOTAL2) Daily
TOTAL2 is the symbol for total crypto market capitalization minus bitcoin. TOTAL2 failed at a diagonal resistance point and is below $1 trillion as of the writing of this report. TOTAL 2 could drop to the February lows at $860 billion. Any such move could imply substantial downside in ETH, SOL, AVAX, NEAR, FTM, and other large cap coins.
Bottom Line: Crypto is in trouble. The Dollar Index (DXY) is rising. U.S. bonds and stocks are falling. The Japanese Yen and the Euro are crashing. There is a problem in the legacy financial system, we just don’t know the exact nature of the problem. It seems wise to move a solid portion of crypto portfolios into stable coins.
Charting the DXY and VIX
When there is stress in the legacy financial system, the Dollar is considered the safe haven. There is apparently so much stress in the legacy financial system that the Dollar Index (DXY) is advancing the way it has in its three prior up-trends. There is a teacup and handle formation that could propel DXY back to its all-time high. This uptrend could be similar to the Dollar uptrend that started with the last inflation scare in 1979. If DXY continues to act like this, all currencies – including crypto – could decline sharply.
VIX measures fear in the U.S. equities market. Higher numbers imply a high level of fear and stocks declining. As of Friday, 4/29, VIX closed at 33. Going back to 1998, moves above 35 have usually meant fear escalates well above 35. During 2008 and the start of Covid, VIX reached 90. If a currency and bond market crisis unfolds, VIX could travel to 90 again. In technical analysis, things happen in 3’s. So, this could be VIX’s third trip to 90. If that happened, there would be heavy selling in equities and crypto.
Bottom Line: We feel the need to repeat our view – again. If the only asset anybody wants to own is the U.S. Dollar, stocks, bonds, and crypto are in serious trouble. Altcoins could get decimated in an environment like this. As the saying goes, “Sell in May and go away.”
Yuga Labs “Otherside” Metaverse Land Auction
The gossip-filled Otherside land auction from Yuga Labs is finally coming on April 30 at noon ET. Rumors have circled for months since Bored Apes creators Yuga Labs first teased the virtual world in March.
Twitter personalities donning BAYC profile pictures claiming to have “insider information” asserted that the Dutch Auction would start at 600 $APE and descend accordingly until the land had sold out. The Otherside official Twitter issued a statement saying to only trust information posted by @OthersideMeta.
Yuga Labs is not communicating much on the details of the drop, even going so far as to say the starting price of the Dutch Auction will be announced at a later date (the auction is in two days as I’m writing this). All land will be purchased using $APE, the currency released by the Bored Apes developers in March.
Potential land buyers are required to complete KYC before participating in the auction. This procedure confused many and led others to speculate that owning land would be more valuable than a patch of digital dirt like in The Sandbox.
BAYC and MAYC holders have 21 days to claim a parcel of land for free following the auction. Otherside’s reveal trailer featured other Yuga collections like Meebits and Cryptopunks. Popular NFTs collections from across the space, including Cryptoadz and World of Women appeared in the trailer. No official statement has been issued on how these collections tie into the Otherside auction.
In keeping with their mysterious air, Yuga disclosed that 10% of all lands would have an enigmatic beast called “Koda” living on them. A Koda is thought to be the mysterious flying creature seen in the Otherside trailer. It remains to be seen what Yuga Labs has planned for these mystifying beings.
Bottom Line: Assuming rumors are true, and Otherside land sells out at 600 $APE with the token at $20, Yuga Labs brings in $840 million in total proceeds. That much revenue would make this land auction the largest NFT sale of all time, and the $APE received would be locked away for a year. The Otherside could be crypto’s best shot at stealing the metaverse from web2 firms like Meta (formerly Facebook) and Microsoft.