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Big Money Crypto: Market Update

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Big Money Crypto: Market Update
Photo by Maxim Hopman / Unsplash

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Take A Step Back

by Alex King, CEO, Cestrian Capital Research, Inc

Bitcoin, Ether, Solana and all the stocks in their respective complexes are taking a beating today. I don’t think this is a new bear market; I think it’s a shakeout of weak hands, by which I mean over-levered long hands.

Let's start today’s note by looking at where the three cryptocurrencies stand vs. the dollar, and then let’s update on a number of important moves in:

  • BitMine Immersion ($BMNR)
  • Sharplink Gaming ($SBET)
  • EthZilla ($ETHZ)

Bitcoin

Bitcoin is hitting its head on the ceiling at $122k; not coincidentally that is the 1.618 Fibonacci extension of the prior Wave 1 placed at the Wave 2 low on this timeframe. (Here time = 0 is the Covid crisis lows). Now, because we’re in such a bullish market I’ve market the potential Wave 3 top at the 2.0 extension - that’s around $145-146k - and then laid out a Wave 4 correction before a final Wave 5 higher. This pattern makes perfect sense within the overall Elliot Wave / Fibonacci system but that, of course, is just pattern recognition and projection, it’s not anything that is certain to happen. If you’re long Bitcoin (and I am, via $IBIT) then you have to be aware that what is marked as a W3 high on this chart could turn out to be a Wave 5 high - and if so that would mean a very sharp correction thereafter.

Ether

Last week it looked like Ether had started a Wave 5 up - that was a headfake. Today’s selling put in a new low and whilst it can keep dropping this looks like an a-b-c into a Wave 4 low. Intraday, the low has held as shown. I’ve adjusted the Wave 5 target (down a little) to reflect today’s price action.

Solana

Solana hit the middle of our Wave 3 target zone and found resistance there.

To be honest I would be surprised if that turned out to be a Wave 3 high. In this bullish a market I would expect SOL to hit the 1.618 extension - that’s around $275 - before a material Wave 4 down. For now let’s see if it can hold over the 50-day moving average (that’s the blue line shown - currently at around $205).

So - overall - I think we are still in a bull market in the three primary crypto names. And in that context let’s take a look at some of the stocks in the crypto complex.

Ether Treasury Companies - BMNR, SBET, ETHZ

Let’s check in on where these companies are trading vs. NAV. I will say these numbers are directionally correct but not dot-accurate, not least because obtaining a daily read of the no. of shares outstanding is very difficult.

Broadly though we can say $BMNR is trading above NAV, and the others are below NAV.

Let's get into it.