Is the Q1 prophecy playing out?

2024 is an important year for digital asset investors, as we usher in the 4th Bitcoin Halving event. A key fundamental event that further increases the scarcity of Bitcoin. However, the first quarter of a Bitcoin halving year has historically shown that negative gains aren’t unheard of. This might be a hard fact to swallow, especially with the recent strength in the market and fundamental tailwinds. Such as the spot Bitcoin ETF listings and talks of monetary policy easing in the near future. However, could history repeat itself?

Bitcoin Quarterly Returns – CoinGlass

Another pattern in the data is that in previous halving years, Q2 and Q4 have been standouts for positive gains. 

Bitcoin – BTC

Very unnerving time for Bitcoin. I spoke last time about a scenario in which we could see higher valuations, but the current market structure does not instil confidence. I see two main issues for the bulls on a higher and lower time frame. 

Higher time frame analysis: Bitcoin has failed to close above the December high of $44,700 USD. This is the first time this has happened since June 2023. In that instance, we saw two red months in a row and a -20% sell-off on Bitcoin. 

Lower time frame analysis: Bitcoin has failed to close above $43,500 USD this week, failing to create a new higher high for a potential uptrend to form (see the red arrow in the image below). 

There are few scenarios left for the bulls, however time may be running out. I go over the potential moves in more depth, technically and fundamentally, in my latest video on my YouTube channel Crypto with Pav. 

Source: TradingView 

Two scenarios to watch for over the coming days leading into the weekend. 

Bullish scenario 

Bitcoin bulls holding strong and defending the Key Level outlined above. Not allowing prices to continue trending lower. 

Bearish scenario

Bears remain in control and turn this into a much larger move lower, firstly falling under the Key Level outlined above. 

Reminder! Altcoins are often hyper-reactive to the sentiment on Bitcoin, so I am expecting volatility pending the outcome. 

Chainlink – LINK

Chainlink was a frequent top performer during the start of Q3 in 2023. For that reason, it may be a leading indicator of the general health of the altcoin market – just maybe. There are many fundamental reasons and big-name partnerships to remain bullish on a project like Chainlink, but should we expect some kind of pullback? 

Source: TradingView

Chainlink is currently trading at a range of previous weekly highs from April 2022. Here are two potential moves to consider over the coming weeks. 

A push higher. New highs towards $21.00-25.50 USD. These are the Fibonacci levels in red. 

A deeper retracement. Back towards the 0.618 retracement level, this level is technically referred to as an ideal entry level. We can also observe further confluence here with a series of previous range highs at $9.50-$9.00 USD. 

Solana – SOL 

Another standout from 2023 is Solana. Similar to Chainlink, Solana has had a strong 2023. With user adoption and trading volumes up and to the right in recent months. Here are my thoughts on its technicals and what could come next in the coming weeks. 

Source: TradingView

We can use range analysis to develop a trading range for the current 2024 highs and lows. Solana has been for the last few weeks tussling at the mid-point of this year-to-date range, until three days ago. We can see a previous swing high had attempted to be run, but it failed to continue higher (See the dashed trend line labelled Sweep above in black). 

Here are two scenarios that may play out as we wait for the next reaction. 

Key level holds. We don’t lose the blue Key Level, and price stabilises its current sell off. Holding $84.00-$89.00 USD. 

Key level fails. Continued selling and waning interest from buyers, who might expect further downside to come. Price falling under $84.00 and continuing lower. 

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That’s my take. Next week will be interesting as we have more data to help us understand if the overall uptrend remains intact or if we are in for two months of marking down as historical Q1 data suggests in a halving year. 

See you all again next week.

Keep up to date

I’ve recently launched my own YouTube channel Crypto with Pav where I give bi-weekly updates on what to expect next in Crypto. You can also follow me over at X for regular updates.

Thank you for your support!

The post On the Radar – Coins to Watch 02/01/24 appeared first on Crypto News Australia.

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Filed under: Bitcoin - @ February 1, 2024 11:57 pm