$Trump Sucks the Life from Alts
Disclaimer: Your capital is at risk. This is not investment advice.
ByteFolio Issue 142;
Bitcoin just made a new all-time high, of sorts, as it challenges $108,000, last seen on 17 December. With the inauguration at noon ET (5 PM GMT), it is curious that the breakout hasn’t been more decisive, but then there is much uncertainty about what the Bitcoin and crypto policies will mean.
Bitcoin Tests the All-Time High
Bitcoin ETF flows have slowed over the past month, with the majority of purchases coming before 8 December. I sense that the Trump buyers are positioned, and the market needs to find a new wave of buyers. It is likely that the next wave will come as a result of favourable new policies around Bitcoin and crypto.
Bitcoin ETF Inflows
Ali will write about the $TRUMP coin and its impact on Solana, but it seems this sort of thing has generally sapped liquidity from altcoins. It is the latest reason to delay altcoin season, as shown by the ByteTree Crypto Average (BCA), which scores a 2 of 5. The BCA score means the average token is not doing very well, but it is not yet critical.
BCA Weakens Again
More notable is how breadth has deteriorated again. Not only are there fewer uptrends for tokens when priced in Bitcoin (blue), but most of them are now in downtrends (red). We have spent too much time here since 2021, and it is becoming widely accepted that crypto can’t keep up with Bitcoin as there are so few trends to choose from.
Crypto Breadth Slumps
$TRUMP has come as a surprise because the assumption was that the new administration would make the USA a home for crypto. That would bring more investment and drive the sector forward. Instead, what we have seen in the hours and days ahead of the inauguration is a Trump-branded shitcoin. I hope this is the warm-up act, with humour attached and little more than that.
