Bitcoin Rally Hints at Genuine Crypto Market Breakout
When it comes to the crypto market, the last seven months can be best summed up with one word: disappointing.
Back in March 2024, Bitcoin peaked at record-highs around $73,000. This came right after the first set of Bitcoin ETF approvals and right before the Fourth Halving (two catalysts that were expected to push cryptos higher). And ever since BTC’s peak, cryptocurrencies have been stuck in a sluggish downtrend that simply refuses to break.
Every time cryptos try to break out of this downtrend – and look like they’re ready to finally restart the ‘boom cycle’ – they fail.
It has been one disappointment after the next. By our count, we’ve had three major failed breakout attempts since March’s high – in May, July, and August.
But now it looks like cryptos may finally break out… this time, for real.
The Crypto Rally a Long Time Coming
Of course, as we’ve mentioned, the crypto market has been stuck in a sluggish downtrend, repeatedly failing to break above resistance.
But the glass-half-full outlook here? Despite this frustrating movement, cryptos have not crashed.
It also seems that October is shaping up to be the eighth consecutive month wherein Bitcoin hasn’t moved more than 20%. Indeed, for the past seven months, Bitcoin’s monthly move has been less than 20%. It has not gone up or down more than 20% in any month since February. If that trend continues in October, it’ll mark the eighth month in a row that BTC saw such minimal movement.
That is really unusual for Bitcoin.
In fact, per our research, Bitcoin has only once before registered eight consecutive months with a monthly move less than 20%. That was in the late summer of 2015. From February to September 2015, BTC lounged around $250, consistently failing to break out or break down for eight straight months.
Then, the breakout happened. Bitcoin soared nearly 40% higher in October 2015. By the end of the following year, it had more than tripled.
In other words, the last and only other time that Bitcoin was this flat for this long was right before a big BTC breakout. And cryptos went on to stage a huge rally over the next 12 months.
We are cautiously optimistic that history will repeat this time around.
And in fact, it looks like that breakout may have already arrived.
The Final Word
Bitcoin is on a run right now, currently up about 25% off its early September lows. This is the largest intraday Bitcoin rally since cryptos topped out in early March.
Moreover, in this rally, Bitcoin has retaken its 50-, 100-, and 200-day moving averages – not once, but twice.
That’s important.
During May, July, and August’s previous “failed” breakout attempts, Bitcoin retook major moving averages once and then lost them – each time.
In mid-May, it retook the 50- and 100-day moving averages, lost them in mid-June, and just kept falling.
In July, Bitcoin retook the 50-, 100-, and 200-day moving averages mid-month, lost them in early August, and just kept falling.
And in late August, Bitcoin retook all three moving averages, lost them days later, and – you guessed it – just kept falling.
But here in the fall of 2024… Bitcoin retook all three major moving averages in late September… lost all three in early October… and is now retaking all three once again.
That’s the first time that’s happened since March.
In other words, certain technical signals are emerging to suggest that this Bitcoin rally – unlike every other this year – is the ‘real deal.’
That, of course, means it may be time to buy cryptos – and risk assets in general.
Crypto is a risk-on asset; perhaps even the riskiest of all. If it is ready to soar, then it is highly likely all risk assets are ready for takeoff as well. That includes stocks.
Indeed, we think both the stock and crypto markets are potentially primed for a huge holiday rally in November and December.
Check out a few stocks we like for that upcoming rally.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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