Santa Claus was a no-show for world markets in 2018. Cryptocurrency held up remarkably well in relative percent decline terms during the period versus world equity markets. The price of $BTC ended the year at US$3693, roughly 5% lower than the start of December and locking in a 73% decline for 2018. Total cryptocurrency market capitalization on 12/31 was approximately US$126billion, $BTC dominance was 52%.
After hitting a low price for the year of US$3129 on December 15, $BTC and the alts market recovered quickly showing strength amidst declining volume through year-end. We saw a full $BTC market price retrace of 83% from December 2017 ATH (all time high) which is consistent with the absolute bottom of prior bitcoin cycles. As volatility returns, it’s possible that the market will trade down at some point during Q1 2019 to re-test these lows, but I see a 55/45 probability in favor of a weekly “V” shape recovery from here. Since mid-December $BTC has bounced firmly off the 200 simple moving weekly average.
As of today (January 7) $BTC is trading just above US$4,000 at resistance on a long-term trendline – the bottom of a falling wedge dating back to February 2018. This is now the time where I begin to re-enter the market at these levels on dips, while also placing bids at even lower support levels. Optimal posture would include a significant cash position held to deploy at confirmation that the bear market is over (sustained volume and tested support above $BTC/US$10,000) or at any further market break-down below US$3100.
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