Nearly 20 altcoins have doubled in 2023 \u2026 can Bitcoin break long-term resistance? \u2026 fundamental bullish tailwinds \u2026 the Fed could ruin everything tomorrow<\/h3>\n
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So far in 2023, nine of the top 100 cryptocurrencies have doubled in price.<\/p>\n
If we broaden our analysis to the top 200 cryptos, nearly 20 have doubled.<\/p>\n
Last week alone, Bitcoin popped 9%\u2026 Cardano climbed 10%\u2026 Polygon tacked on 20%\u2026 and two smaller altcoins, Threshold and Aptos, soared more than 100%.<\/p>\n
Again, that\u2019s all from just last week.<\/p>\n
Pulling back, it\u2019s Tuesday, so in keeping with recent tradition, let\u2019s check in on the crypto sector with the help of our expert Luke Lango.<\/p>\n
From Luke\u2019s\u00a0Crypto Investor Network<\/strong><\/em>\u00a0weekend update:<\/p>\n \u2026It\u2019s not even the end of January and already, about 15% of the top 200 cryptos have risen more than 100% this year.\u00a0<\/em><\/p>\n Does that sound like a new boom cycle to you?\u00a0<\/em><\/p>\n It certainly does to us\u2026<\/em><\/p>\n While our \u201cBoom Cycle 2023\u201d prediction for cryptos may have seemed outlandish and misplaced a month ago,\u00a0it is now starting to look like a consensus belief.\u00a0<\/em><\/p>\n For newer\u00a0Digest<\/em>\u00a0readers, Luke is our hypergrowth investment expert, and few sectors offer greater potential for hypergrowth than cryptocurrencies.<\/p>\n Before the 2022 bear market, altcoins were some most lucrative investments of the prior five years \u2013 some rising, literally, thousands of percent.<\/p>\n Luke\u2019s\u00a0Crypto Investor Network<\/strong><\/em>\u00a0<\/a>newsletter\u00a0focuses on these cutting-edge altcoins, but Bitcoin remains the barometer of the crypto sector. In general, its trend sets the momentum direction for the broader altcoin world.<\/p>\n So, to get a sense for where the sector is heading, our analysis must begin with Bitcoin.<\/p>\n On that note, let\u2019s return to Luke:<\/p>\n At this point, pretty much every technical buy signal has been triggered.<\/em><\/p>\n Perhaps most potently, Bitcoin has crossed above its 30-week moving average (MA<\/strong><\/a>) for the first time in this bear market cycle.\u00a0<\/em><\/p>\n Every time BTC has crossed above its 30-week MA, BTC proceeded to soar by at least 100% over the next few months.\u00a0<\/em><\/p>\n Source: Bloomberg<\/p>\n<\/div>\n Now, though \u201c100% gains\u201d might be in Bitcoin\u2019s future, how the crypto handles a key upcoming resistance level will influence how quickly it gets there.<\/p>\n Regular\u00a0Digest<\/em>\u00a0readers will recognize it from last Wednesday\u2019s Digest. That\u2019s when we analyzed Bitcoin through a \u201cStage Analysis\u201d lens (you can\u00a0read that issue here<\/a>).<\/p>\n In short, it appears that Bitcoin wants to break out of its Stage-1 sideways consolidation stage into its Stage-2 growth stage.<\/p>\n However, for that to happen, the crypto needs to push north through its Stage-1 resistance line with heavy volume.<\/p>\n As you can see below, that level is roughly $24,000 to $24,500 (ballpark 4%-5% higher than Bitcoin\u2019s price as I write Tuesday morning).<\/p>\n Source: StockCharts.com<\/p>\n<\/div>\n Back to his\u00a0Crypto Investor Network<\/strong><\/em>\u00a0update:<\/p>\n The fundamental drivers of this rally look very solid, too.\u00a0<\/em><\/p>\n On the macro front, we got more data [last] week that inflation is falling apart, with PCE and core PCE inflation cooling off rapidly in December. Those inflation rates are on track to get back to \u201cnormal\u201d levels by the spring.<\/em><\/p>\n Also on the inflation front, short-term consumer inflation expectations dropped again in January, while natural gas prices plunged below $3 this week.\u00a0<\/em><\/p>\n Inflation is collapsing.\u00a0<\/em><\/p>\n Source: Bloomberg<\/p>\n<\/div>\n Meanwhile, the economy looks positioned to avert a recession.\u00a0<\/em><\/p>\n Mastercard\u00a0(MA<\/strong><\/a>) and\u00a0Visa\u00a0(V<\/strong><\/a>) reported earnings [last] week. Both payment card giants said that consumer spending was impressively resilient in the last three months of 2022 and is picking up steam here in January.<\/em><\/p>\n The consumer is 70% of the economy. If they\u2019re still chugging along, the economy will, too.<\/em><\/p>\n Perhaps most important of all, Luke points toward the S&P\u2019s technical breakout.<\/p>\n As we noted in yesterday\u2019s Digest, the S&P has finally broken above its long-term down-sloping trendline. This didn\u2019t happen once in 2022.<\/p>\n Back to Luke for why this is so bullish for crypto:<\/p>\n This looks like a classic technical breakout from a bear market. And that\u2019s bullish for cryptos because stocks and cryptos have recently developed a strongly positive correlation.\u00a0<\/em><\/p>\n With Bitcoin and the broader altcoin sector surging in 2023, combined with a fundamental picture that\u2019s firming up, why hasn\u2019t Luke recommended new altcoin investments?<\/p>\n Because there\u2019s one very large elephant in the room that holds the power to make or break this budding rally\u2026<\/p>\n The Fed.<\/p>\n Tomorrow, the Fed announces its latest policy decision, and we hear from Chairman Jerome Powell.<\/p>\n It\u2019s widely-expected that the Fed will raise rates only 25 basis points, but what\u2019s unclear is Powell\u2019s tone and forward-looking comments in his press conference.<\/p>\n And given the potential for curveballs, Luke wants to sit this one out \u2013 for now.<\/p>\n Back to his update:<\/p>\n We do not want to front-run this event in the crypto world.\u00a0<\/em><\/p>\n Powell will either light a fire under the crypto markets by saying the Fed\u2019s job is nearly done, or he will cause a massive crash by saying the Fed needs to keep hiking for a lot longer.\u00a0<\/em><\/p>\n We want to issue\u00a0new Buy Alerts<\/a>\u00a0after\u00a0that event.\u00a0<\/em><\/p>\n Why?<\/em><\/p>\n Because while we cannot predict what Powell will say, we can predict with reasonable confidence that inflation is cooling fast enough to allow the Fed to pause its rate-hike campaign by the summer, at the latest, regardless of what Powell says on Wednesday.\u00a0<\/em><\/p>\n Therefore, if Powell lights a fire under risk assets on Wednesday, we will join the rally because it will last for a while longer.\u00a0<\/em><\/p>\n If Powell causes a crash, we will\u00a0buy the dip\u00a0<\/a>because we are confident cryptos will rebound.\u00a0<\/em><\/p>\n Either way, it simply makes the most sense to us to wait for Powell to do whatever he is going to do next Wednesday, and then either join the rally or buy the dip.\u00a0<\/em><\/p>\n The on-chain analytics platform CryptoQuant publishes a \u201cProfit and Loss (PnL) Index.\u201d<\/p>\n The index attempts to normalize cycle top and bottom signals using combined data from three other on-chain metrics. When it\u2019s value climbs above its one-year moving average, that triggers a long-term \u201cbuy\u201d signal.<\/p>\n And that just happened.<\/p>\n The PnL Index just issued a \u201cdefinitive buy signal\u201d for Bitcoin. Notably, this is the first such signal since early 2019.<\/p>\n But it\u2019s not the only bullish indicator that\u2019s triggering today.<\/p>\n Here\u2019s another from\u00a0Coin Telegraph:<\/strong><\/em><\/p>\n CryptoQuant is not alone in eyeing rare recoveries in on-chain data, some of which were absent throughout Bitcoin\u2019s trip to all-time highs following the March 2020\u00a0COVID-19<\/span>\u00a0market crash.<\/em><\/p>\nAs Bitcoin goes, so goes the sector<\/h4>\n
![\"Chart](\"https:\/\/investorplace.com\/wp-content\/uploads\/2023\/01\/bitcoin-30-week-ma.png\")
<\/p>\nBitcoin stands at the cusp of the $24,000 to $24,500 level, which is a critical technical range<\/h4>\n
![\"Chart](\"https:\/\/investorplace.com\/wp-content\/uploads\/2023\/01\/bitcoin-resistance.png\")
<\/p>\nLuke believes the macro fundamentals support a breakout<\/h4>\n
![\"Chart](\"https:\/\/investorplace.com\/wp-content\/uploads\/2023\/01\/collapsing-pce-inflation.png\")
<\/p>\nThe one massive overhang that remains<\/h4>\n
While we don\u2019t know how tomorrow will play out with the Fed, let\u2019s end with a few more reasons for crypto optimism<\/h4>\n