$2 Trillion Crypto Market is “large and liquid”. Is Crypto Poised for a Recovery?

4 min readMar 23, 2022

The crypto market rallied back above $2 trillion in the last few days and is poised to cement a trend reversal by next week.

As it happens, Ray Dalio’s Bridgewater Associates now sees Bitcoin and Ether as “large and liquid” markets which they’re keen on accessing.

Let’s dig in.

Dear readers,

The purpose of this newsletter analysis is to provide context to current events and cryptocurrency markets. It is released every Monday and Wednesday. I am not perfect and this is not a science — nor is this newsletter a signals service. While I cannot promise perfection I do my best to be honest and transparent.

Thank you for reading.

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Ray Dalio’s Bridgewater Invests In Cryptocurrency Fund

The world’s largest hedge fund is preparing to get behind its first crypto fund as investment titans begin to take the $2 trillion industry seriously.

Ray Dalio has personally invested in Bitcoin in May 2021, and often discussed potential government bans on the then-fledgling space.

Read the full article here!

Technically speaking

Ethereum Signals Trend Reversal

Ethereum/Dollar is up 5.5% week-on-week exchanging hands just under $3,000 at the time of writing. The pair eclipsed the psychological level on Tuesday but did not sustain the low time-frame rally.

But ETH/USD has shown resilience and even relative strength in comparison to BTC/USD. Since March 15, ETH/BTC rallied over 7% to ₿0.07. This relative strength materialised in the Dollar pair and suggests that capital flows could turn to altcoins in the coming days and weeks.

In terms of volume flows (OBV), ETH/USD has experienced an uptick in buying pressure which has been indicative of a trend reversal historically. But so far, ETH/USD remains beneath the resistance cluster ($3,000-$3,300 yellow bar). The RSI also exited its consolidation structure last week, propelling prices closer to the resistance area.

Technically, ETH/USD is still in a downtrend so LTF consolidation moves should come as no surprise.

A rejection off the H4 200-EMA previously dictated a departure from the all-time-high range. Similarly, a back-test and bounce from it ($currently $2,800) would indicate a probable departure from the current range (higher).

While there are compelling reversal signs the pair has yet to form a higher local high above $3,300. The question as to whether whether the price-RSI divergences and on-balance volumes have more gas in the tank to cement a reversal is still an open one. Still, there are enough confluent factors that speak to a non-trivial change in price direction.

Litecoin Rallies to Local Pivot

Meanwhile, Litecoin/Dollar is up 7.4% week-on week, exchanging hands at $119.5 at the time of writing. The coin briefly reached $124 on an intra-day basis but remains in consolidation mode beneath the pivot at the time of writing.

The Stochastic-RSI on the daily timeframe is overheated, however, which could spur an intra-day sell-off.

Given the pair’s tendency to fluctuate wildly compared to other majors, LTC/USD could aim for LTF liquidity near $112 in the immediate short term. But that situation would be re-accumulation in my view following a failed distribution phase. Daily closes below $112 would be a red flag, opening the door to sub-$100 prices again.

Catch you later.

p.s. This is my opinion. It is not financial advice.

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