Stocks and crypto set to rally as US dollar index freefalls, here's what to watch for!

In this week's Onchain Edge newsletter, we take a closer look at the current state of the markets, including the S&P500's break above the $4k resistance and the potential for continued bullish trends in both the stock and cryptocurrency markets.

We also discuss the altcoin market's recent breakthrough above key resistance levels and the potential for an upcoming altcoin season.

Finally, we explore potential trade ideas, including low-percentage allocation "shitcoin" plays and updates on previously recommended trades. As always, we stay informed, and carefully considering market trends and analysis before buying is essential.

Enjoy!

Onchain Edge

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Global market

The S&P500 has broken above the $4k resistance we mentioned last week and is trading at $4.1k. A break above $4’168 would mean a new higher and more substantial probability that the bullish trend will continue. This resistance will act as a strong confluence area with much volatility.

Since the S&P500 ES mini futures are at $ 4'120, we can hopefully expect some positive moves from the S&P500.

The US dollar index has been in free fall since November last year, which is relatively good for stocks and crypto. However, the DXY is now at necessary support at $101. A break of that support would likely mean that the stocks and crypto will continue to rally. The next level to keep an eye out for is $99.

Technical Analysis

Global market cap with BTC

The crypto market is starting to break out of the bull flag formed over the last few weeks and is now trading at $1.169T. The daily crypto market cap trend has been bullish for a while. Now it’s time for the crypto market to make an edge-to-edge move to the upper band of the red Ichimoku cloud at $1.4T.

That would be a $288B (25%) global crypto market cap increase. But, of course, these moves don’t happen in a straight line, so expect a lot of volatility and shakeouts along the way.

Global market cap without BTC (USDC + USDT caps removed)

The altcoin market broke above the $500B resistance we discussed last week. We still need a candle close above the resistance for solid confirmation. Here as well, we can most likely expect an edge-edge trade that would bring the altcoin market to $718B. A $215B (42%) increase. That means the altcoin season isn’t far away.

BTC technical analysis

$BTC hasn’t moved much since last week, apart from that one fud dump caused by Cobie. I wrote a tweet about it here. It shows how fast people with high leverage get liquidated when there is low volatility. $BTC is still well within the daily trend, so you should only look for long positions.

The daily support is at $27.2k, and the weekly support is at $22.5k. I doubt we will wick down that far if you want to place limit orders, then I recommend setting them between $25k and $27k.

Ethereum TA

ETH is trading at $1910 with daily support at $1823 and weekly support at $1509. The next significant resistance is at $2225. The RSI is at 66, so it isn’t considered as oversold. If you want to catch wicks after the shapella upgrade on the 12th of April, then you can place limit orders between $1480 and $1801. You can also place some buy orders lower, but the probability is low that they get hit.

If you fear dumps because of the ETH unlock, you might consider buying a 7-day put option on deribit (cex),lyra, or hegic (onchain options).

On-Chain Analysis

BTC on-chain analysis

The next major liquidity hurdle for $BTC to overcome will be between $28.5k and $32k. With the number of investors that are hedging and punting shorts, we can expect a lot of volatility as shorts and long traders get liquidated. So placing bets to sell at $32k or to buy at $24-$25k might allow you to catch liquidation wicks.

The onchain heatmap hasn’t changed much since last week due to the low volatility. RSI has dropped a little bit, and puell multiple has increased significantly. The market isn’t overheated, which is good. We need to follow the trend until the onchain indicators show signs of being overheated.

The Puell Multiple is at 1.34, and we might try and retest the slower moving average, but it isn’t showing any signs of weakening yet.

NUPL managed to bounce off of the support at 0.27. It’s currently at 0.3 and will most likely try to test the 0.35 resistance soon. The higher the profits, the more likely investors will want to capture them. So a break above 0.35 would be a good sign. However, investors who bought before the June 2022 crash and are breaking even might want to cash out.

We want to observe the BTC % in profit on a longer timeframe to gauge how far we are in the cycle and when we might get a pullback. The current supply at a loss is only at 27.26%. So as soon as we get to the 10-3% range, we know it’s time to make some profit.

Trade ideas

Most of the trade ideas from this edition are covered in BTC and ETH section, where I go over the support levels that I think might be good entries.

Last week there was some fud around the ARB token. However, you would have gotten some excellent profits if you had placed limit buy orders around the levels I mentioned last week (ARB @ $1.10). Furthermore, my LVL trade idea from ‘Market Volatility Surges: Banks' Bankruptcy and Crypto Rally‘ is up 31%, which is nice.

I’m still holding LVL.

Apart from TC and $ETH, I only have a few low % allocation shitcoin plays. These are high-risk and can go to zero.

Pendle finance

Mcap: $50m Entry: $0.40-$0.50Stop Loss: none atm.

Conclusion

In summary, the S&P500 has broken above the $4k resistance and is trading at $4.1k, with a break above $4’168 indicating a more substantial probability that the bullish trend will continue. The US dollar index has been in free fall, which is relatively good for stocks and crypto, but a break of the important support level at $101 could mean a continued rally. Finally, the crypto market is starting to break out of the bull flag and could make an edge-to-edge move to the upper band of the red Ichimoku cloud, potentially increasing the global crypto market cap by 25%.

The altcoin market has broken above the $500B resistance, with an edge-to-edge trade likely bringing it to $718B. Trade ideas are covered in the BTC and ETH sections, focusing on support levels for potential entries. All eyes are on the ETH Shapella upgrade, which will bring a lot of volatility to the market.

Cheers,

Onchain Edge