Analysis of the Current Cryptocurrency Market

An Analysis of the Current Cryptocurrency Market by Technology/Cryptocurrency Expert, Marcus Cortes

In analyzing the current cryptocurrency market, as a crypto investor, it is difficult to find a short-term technical indicator I can rely on. They usually only work for a while, and then flip upside down and start losing me money. That said, if you zoom out enough, the noise in the market starts to disappear. There is one indicator that seems fairly reliable as long as the fundamentals of Bitcoin don’t change drastically, and that is linear regression of the long-term chart.

This is the 3D log chart of bitcoin going all the way back to 2014. The yellow line is a linear regression I drew by hand. When bitcoin is above the line, it’s overpriced; when it’s below it’s underpriced. Obviously, an investor wants to buy when something is underpriced, and sell when it’s overpriced.

As you can see, bitcoin is still overpriced, even after this recent megalithic dump, meaning it’s not time to buy, and it might be time to sell if it spikes up again.

I’m looking at Bitcoin first because all other cryptos seem to follow its lead. When bitcoin goes up, other coins go up. When bitcoin falls, other coins follow. Here’s a look at dogecoin:

This is the 1W log chart of dogecoin. I drew another regression line. There is a lot less data to work with for dogecoin, so the line doesn’t fit well, and it’s probably off, but it can’t be WAY off. As you can see, dogecoin is also potentially overpriced. Combine this with the knowledge that dogecoin will follow bitcoin up or down, and bitcoin is being pulled down.

In the past, bitcoin lost 65-85% of its peak value after each bull run. That means bitcoin could touch 10-20k before this is over. If this holds for dogecoin (which it might not), dogecoin could touch .10-.25. If so, those sound like really great prices to buy at.

So that’s how I would normally read this market, but something has fundamentally changed recently. The Fed is printing money like crazy and inflating USD. Something like 20-30% of all money ever printed was printed in just the last year. These charts are based on the USD currency (BTCUSD and XDGUSD). They assume USD is a stable currency, and all the fluctuations are because the value of crypto is changing, not USD.

As USD drops in value, crypto markets are going to skew upwards. For example, instead of bitcoin touching 10-20k, it might only touch 15-30k. Dogecoin might only touch .15-.35 instead of .10-.25. As USD continues to inflate, these numbers could go higher.

About Marcus Cortes:

Marcus Cortes has been trading cryptocurrency actively since 2013. A technology professional, Cortes owned and operated a virtual currency technology startup for several years. After achieving financial success trading cryptocurrency he now provides consulting services for others interested in investing in crypto.

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