Transcription
Weekly closing validated. We have important signals on the Alcoin market. We will discuss them today as well. We will review altcoins versus Bitcoin. We will also review what is happening on the stock market. It is very similar to what we have on the crypto market. And we will also review Bitcoin's dominance to see where we stand. Just before we start, I remind you that our algorithm service is still available. 30 for the SPT algorithms last week. It was an excellent week. Also, the LIM algorithms made 30 TP. You have the details of the TPs here. I also remind you that past performance does not represent future performance. Obviously, everything is available in the Discord in terms of performance. To access it, it's very simple. It's the first link in the pinned comment. It will take you to this page. You just need to register on Bitgat, our partner link, by clicking on this first link. You do the little verification here which proves you are not a robot. And then, you just need to register and click on this little Algo Trading Mentorship VIP Alcoin and crypto link. And it's a short 10-minute video in which I explain how to unlock your access 100% for free. You will have access to the mentorship, to the alo as well as to the VIP, Alcoin and crypto which is right here in the Discord. This is where I will share the best opportunities on the market from my point of view.
So, to come here on Oders, we had an interesting weekly close because it allowed us, for now, to close in the bullish fair value gap, the little bit of fair value gap that we had left. So that's what's currently keeping us in the Alts market. And in fact, if you correlate with altcoins, well, on many altcoins, we are retesting the wicks. And so that's what we are also doing here on Oders. And what you need to understand is that for now, this FVG prevents us from going lower on the Alcoin market. If we have a close below this FPG, unfortunately, that will announce that we will probably retest the discount zone of the wick. So here, you take the low of the wick, the high, you take the discount zone, and so that would be approximately between 212 and 184 billion dollars.
For me, one signal concerns me the most, I've already talked about it, it's the formation of the breaker block here which marks the inversion and reversal of the Alts market, and that's not positive. And so, a zone that will be extremely important to watch is the breaker zone. Basically, tell yourself that as long as the Alcoin market is trading below this bearish breaker, it's a dangerous market where bounces can unfortunately bring us lower. So that's what we'll need to observe. The breaker on a weekly basis here. And again, you just need to look at the dynamics. Here, we can see that we had a bullish dynamic with a market making higher lows and higher highs, but we can see that we have broken the last two higher lows. And so now, what we observe is whether the market simply doesn't care and continues bullishly, or on the contrary, whether unfortunately here the market confirms this bearish dynamic by forming a lower high and here we could go back down. So that's not what we want to see at all. That's why this breaker zone will be extremely important to observe.
Now, I wanted to give you a correlation point. So, we will quickly look at altcoins versus Bitcoin. After that, we will look at what is happening on the stock market. Here, we can see that well, I've said it many times, but altcoins against Bitcoin, well, it remains bearish. That is to say, we can see that for now, the dynamic of altcoins against Bitcoin remains bearish. So that means that the altcoin market against Bitcoin is still in a bear market. That hasn't changed. Again, I personally think we are closer to the bottom than the top in this market. It's easy to say given the zones we are returning to. But that's what you need to understand. That is to say, from a long-term perspective, the hardest part is probably behind us. It's been since 2021, well since early 2022 that the altcoin market has been falling against Bitcoin. It's late 2025, we are closer to the bottom. You need to realize that. Even from a technical point of view, we have come back to the bottom that launched the previous bull run phases. Here, we can see that in 2017, we had a huge pump until around early 2018. Then, bear market, we bottomed out at the same place. We came back to test this bottom. That allowed us to bottom out and go back up. So for me, this will be an important zone. We are at important levels here on the altcoins versus Bitcoin market.
Now, what you need to understand is that it's not going to go "to the moon" tomorrow. You need to understand that. That's not what the chart indicates. If the chart is consolidating like this, or consolidating well like here, yes, we could say "Okay, the breakout is imminent." But here, there is no imminent breakout. When we look at the price dynamics, it remains a bearish dynamic for now. It will take time to form a bottom. And in fact, I wanted to show you the altcoin indices that we have and then show you a bit of what we have in the stock market. So this is Total 3. Okay? So this is the market roughly excluding Bitcoin, Ethereum, and stablecoins here, and the third one which is perhaps BNB at the moment, and we see that we haven't managed to surpass the 2021 high. Well, if you look at what's happening on the stock market, we have the Russell, which is the equivalent of the altcoin market, with major caveats, but so you can understand, well, we see that the Russell is the same, we are exactly at the same place, that is to say, well, the 2021 high, we haven't broken it, but we are at resistance. So we see that in fact, the crypto market is following the performance we have on the stock market on indices like the Russell for those who are wondering.
So, Russell indices, in short, are the smallest capitalizations. Okay? Everything that is S&P 500, Nasdaq, these are the large capitalizations and especially the FAANGs which carry a lot more. Now we can add a video from 2021 and we have exactly the same thing in crypto. So we see precisely that this lack of liquidity with a Fed that has quite high interest rates, a reverse repo, and so on. We see that we have a major liquidity drying up here. Oops! I've shown you this many times, but compared to what we had in previous years here, we'll wait for it to load a bit. I'll show you this from around 2020. All the liquidity we had here was enormous. Just here, we can see that there was a surplus of, well no, precisely here, banks and institutions started giving their money to the Fed because they considered the markets to be quite risky. So, and we were coming out of a huge QE. So we know that there was a lot of liquidity, but now we are in QT, the reverse repo is empty. So we know that there is a huge liquidity drying up. And in such cases, well, we go for very safe assets. Very safe assets are companies that generate enormous cash flow. I'm mainly talking about the stock market, so Nvidia and so on. And on the side of this type of stock, well, we avoid going into it a bit. We go into it, but much less aggressively. And so, to show you a bit, perhaps a bit more history, we can see that we had an enormous push from 2020 to 2021 during Covid, but we are at these levels. So, in fact, we realize that what is happening with altcoins is a bit like what is happening on the stock market.
After that, we have another index, which is what I showed you just before, Oders, which is in more difficulty because we see that it is far from the 2021 high. So these are more the smaller altcoins. We remove everything outside the top 10, and therefore we can see that it is even more complicated, which is quite normal since in our top 10 there are still large altcoins that have performed well, I'm thinking in particular of XRP here, we think of BNB, we can think of Solana, Cardano, DHCIN, etc., which have pushed during this cycle, which has increased Total 3, but we see that Oders, without these altcoins, is in much more difficulty. So we see that there is a hierarchy in the market. Bitcoin and Ethereum are quite sought after, especially Bitcoin thanks to ETFs and so on, and then we see that behind there are BNBs, Solanas that are doing quite well, rising assets in this cycle like Hyperliquid which have performed well, etc., but we see that for the majority of other altcoins, there is not a lot of demand because they are much riskier projects, and when projects are risky, liquidity remains in solid assets since we have a lack of liquidity, even on the stock market, we have a lack of liquidity to have a pump of small companies, etc. So that's why we focus on large companies that generate cash flow.
And so here you have the same index. So it's as if here I took Bitcoin. So I'm going to take Russell divided by Nasdaq. We see here that we are still in something bearish. We see that from 2017 to 2020 we were falling. So that's what we had on the altcoin market, for those who remember. From late 2017, early 2018, we had a bear market until 2020 on alts. Then 2020-2021 it exploded, even on the Russell. Well yes, there was more liquidity. So investors took even more risks. They put money into small companies, and that's why many small companies boomed in 2020-2021. So this ratio increased. So that means the Russell outperformed the Nasdaq, which is rare. These are very rare phases. So these are really very risky phases. Tell yourself that even on indices, we can say that there is a risk pyramid. You have the S&P 500 and the Nasdaq which are at the top. And then you have other indices, everything that goes into Dow Jones here, Russell, etc. So here I would put for example Dow Jones here and again behind, we will put the Russell. Okay? And so, well, here the Russell is at the bottom of the pyramid, and so when the Russell starts to outperform the S&P 500 Nasdaq, it's really when we are in QEs generally which boost. Well, a QE is when there is a lot of liquidity. So, we really have liquidity flowing. And so, that's what allows us to take even more risks, to look for bigger multiples, etc. because you get bigger multiples on Russell companies than Nasdaq companies. You need to understand that. And so here, that's why for now this ratio is still in a bear market. So even on the stock market, we have exactly the same phenomenon for now, which is that on the institutional side, they don't take too many risks on small companies, and it's normal, there is a significant liquidity drying up, and so as long as it stays that way, it will be difficult to have an altcoin market that explodes. There will be localized pumps. So, we see for example that there is momentum on Tao. By the way, don't hesitate to tell me if you are interested in Tao's analysis because there is something really interesting that has been done. We talked about the FVG here, return to Breaker, it reacted very well. So I think we can head towards 500 and potentially more, but yes, there are assets that held up very, very well during the crash and which are now the best performing assets. So that remains to be observed. And so, well, the market is very selective. The market is going where there is a narrative. So on Tao, there is the halving for example, I think, in December. So that's also a narrative, theoretically. And so, well, the market, liquidity is quite restricted. We go where there is potentially a return to be made, but we don't invest in just anything and everything as was the case in 2020-2021, because there is a significant liquidity drying up.
And how long will this last? Well, we could have an altcoin season before, but it's very unlikely. In fact, when we talk about altcoin season, what are we talking about? We are talking about movements similar to what we had in 2017 or in 2020-2021, we agree. We are talking about a phase of outperformance of altcoins against Bitcoin. So something solid. We are not talking about a small pump for two weeks like we had during November-December and like we had, let's say, February-March 2024. You see, it was very weak. When we talk about altcoins, we are really talking about big expansions like this. Well, expansions like this require a lot of liquidity. Currently, unfortunately, we will be restricted in terms of liquidity for several months, perhaps even several years.
Now, the good news is that the Fed has spoken about an end to QT in the coming months, meaning stopping the reduction of its balance sheet. So that's good, we started QT in early 2022, and now let's say, early 2026, they will end QT. Perhaps the first quarter of 2026. So, all this would have been our QT period. So, knowing that we are approaching bottom phases, it's like that. That's what I was telling you earlier, the hardest part is behind us. Now, for it to go back up, well, it can require consolidation, re-accumulation, and then the arrival of liquidity. The arrival of liquidity can be triggered by two things. One, a recession. Now, there are interesting figures that have come out which say that GDP is almost neutral around 0% or even 0.1% if we remove everything related to data centers, etc. So, that's to show precisely that it's AI that is boosting economic growth enormously at the moment, but without AI, well, we would be in trouble. So we'll see how long that lasts. But if inflation stagnates or even decreases a bit, and GDP starts to slow down, and the labor market slows down, well, all that can favor interest rate cuts more quickly and bring us liquidity. Also, there is the American debt, soon there will be the debt rollover. So that can create a lot of liquidity too, and these could be events that could potentially allow us to have an altcoin season. But there is already little chance that it will be as aggressive as 2020-2021. So instead of thinking that if this happens, we will go back to the highs. There is a chance that, for example, well, we might stop at retracement waves, perhaps around 0.5. Okay? Here, end of QT, it consolidates, and then possibly it goes up again, but it will take weeks, perhaps even several months, perhaps 1, 2, 3 quarters, it won't happen tomorrow.
Now, it's possible that tomorrow the biggest altcoin season starts, but you understand that it's not the most probable thing if we talk about macroeconomics and what is also happening on the stock market. We see that currently on the stock market, small companies are suffering enormously, and we have exactly the same thing in crypto. Well, it's normal, there is a huge liquidity drying up. Even banks are short of liquidity, so they will continue to prioritize what is least risky. So that's why we see gold exploding, bonds starting to rise, silver rising, large American companies rising, but everything else is really struggling, it's in trouble, and so it reflects what we have on the crypto market. We can say that Bitcoin is gold and Ethereum is silver, for example, well, we see that these are preferred assets, but apart from that, a few small narratives here and there. Even on the stock market, there are a few small narratives about AI for example, but apart from that, there are no really big narratives overall where companies will take a lot of risks and try to finance companies. That's no longer the case at all since interest rates were raised significantly in early 2022. You need to understand that we are in this liquidity drying up, and we need liquidity to have an altcoin season.
Don't forget that we need even more liquidity than before. Why? Because there are more altcoins than before. There are more projects. Tokenomics have evolved. So we have more altcoins and much more supply than before. So we would need even more demand, much more liquidity, and well, that's difficult to achieve for now. I say for now because don't forget that the United States has the objective of tokenizing American debt on stablecoins, and that could also be one of the next big narratives that could bring us a lot of liquidity and perhaps wait for lower interest rates, etc.
I'll stop here. I hope you enjoyed it. If so, don't hesitate to smash the blue thumbs, subscribe, and leave a comment. Thank you very much to those who play along. I remind you of all the links in the description box if there is a lot of free content for you.