The Month in Review: Analyzing Cryptos and DGTX for February

As always, it’s been an eventful month in the cryptocurrency universe

As always, it’s been an eventful month in the cryptocurrency universe. This time yesterday, the 10 largest cryptocurrencies looked to have turned in a positive performance for the month of February (with the exception of Ripple). It was a sea of green across the board with DGTX making massive gains as well! And then, something happened. Bitcoin took another dive down to $3,653 and most major coins followed suit, with some slight signs of recovery today.

Luckily, the downward drop didn’t affect DGTX–quite the opposite, in fact! The token managed to generate an impressive rate of return for February, as Digitex prepares to launch the firm’s futures exchange in Q2.

DGTX increased by 29.0%, easily outperforming the majority of the largest cryptocurrencies. The native token is well above its ICO price from January 2018, with a spectacular gain of 327%. Please review the following table (note, this data was taken from CoinMarketCap, 27th February).

Feb 27 CMC

Previous Bitcoin Bear Markets

Unfortunately, as you well know, one month of bullish activity certainly doesn’t mean that the crypto bear market has ended, especially when you consider the last 24 hours.

Quite often, speculative bear markets can stick around for a considerable period of time. Bitcoin has been in existence for 10 years. Let’s review the previous bullish and bearish cycles for BTC.

Bitcoin Bullish/Bearish Cycles

barchart

Bitcoin was launched on 3rd January 2009, when Satoshi Nakamoto mined the first block of Bitcoins (famously known as the Genesis Block). The trading of BTC was very thin during the first two years of its existence.

Volume increased dramatically when the Mt. Gox exchange was formed in July 2010. Bitcoin enjoyed a roaring bull market for the next few years, reaching an all-time high of 1,135 on 29th November 2013. The bull market lasted four years and 10 months.

Bitcoin suffered its first major bear market throughout all of 2014. Officially, the bear market ended on 4th January 2015 @ 172. This set the stage for a dramatic bull market over the course of the next three years, which carried the price to almost $20,000 per BTC.

Officially, the bull market ended on 18th December 2017 @ 19,862. Bitcoin has been in a bear market for the past 14 months, with no sign of a significant bottom.

Although BTC has been in existence for over 10 years, the cryptocurrency has only experienced three bull/bear cycles. Therefore, it’s difficult to accurately determine the average length of future bull/bear cycles. In order to draw any meaningful conclusions from Bitcoin’s historic price activity, we need at least 50 years of previous data. We need to wait for more data.

Examining Bitcoin’s Price Chart for a Bear Market Bottom

The “classic” definition of a bear market is lower lows and lower highs. Each low is followed by an even lower low. Each rally attempt falls short of the previous rally. Currently, BTC is in a classic bear market. During the past 12 months, each Bitcoin advance has been unable to exceed the level of the previous advance.

The first sign of a bear market bottom will occur when BTC can penetrate the two previous market lows, which would be 6,568. Until Bitcoin can penetrate 6,568, the path of least resistance is to the downside. Please examine the attached chart.

Important Numbers to Watch for DGTX

DGTX enjoyed a nice rally during the month of February, advancing 29.0%. The native token is
trading 327% above its ICO price from January 2018.

Please review the following paragraph from an article released on 29th October 2018.

In terms of important support levels, it’s very important for DGTX to remain above .0679. A drop below .0679 would cause DGTX to lose its positive momentum, which could encourage traders to liquidate their positions, thus applying more selling pressure to DGTX. Therefore, from a technical perspective, DGTX needs to stay above .0679.

When this article was released on 29th October, DGTX was trading @ .1285. A few days later, the token fell below .0679, which ushered in a bear market. Why is this such an important number? Because it represented a major support level back in October 2018. Therefore, .0679 has now become a major resistance level, as DGTX tries to recover from its own bear market. A weekly close above .0679 would signify the end of the bear market.

Personal Observations

The rise of Bitcoin (2009 – 2017) will go down in the history books as the greatest speculative bull market of all-time. In percentage terms, Bitcoin increased 659,433,233%. Bitcoin’s rate of return easily surpassed the Dutch tulip bulb mania in 1637, the South Seas Bubble in the 1720s and the Internet Mania in the late 1990s.

Based on my trading experience, massive bubbles (like Bitcoin) are usually followed by several years of sideways trading activity. Many traders in the cryptocurrency universe are convinced that Bitcoin (and other cryptocurrencies) will experience another spectacular bull market in the not-too-distant future.

Based on historical research, it’s unlikely that the crypto universe will embark on another powerful bull run any time in the near future. Instead, we should expect a large trading range at least for the next few years. Those investors who are expecting Bitcoin to return to the 20K level any time in the near future will probably be disappointed.

How does this affect DGTX? Going forward, I believe the future price direction of BTC will actually have very little impact on the performance of DGTX. Why? Because DGTX wasn’t even trading during the crypto mania phase in late 2017. Therefore, DGTX was never exposed to the “boom/bust” cycle that most cryptocurrencies had to endure. DGTX was able to avoid all of the emotional drama.

The future price performance of DGTX will be linked to the success of the Digitex Futures exchange. You have probably noticed that the token has been locked in a fairly narrow trading range during the past 30 to 60 days. Traders and investors are waiting for the release of the firm’s state-of-the-art trading interface and zero-fee exchange.

If Digitex has a successful launch, DGTX has the potential to move much higher. Let’s not forget, the Digitex team has created a revolutionary product which has never been seen in the futures industry. Digitex is blazing a new trail in an industry that has been in existence since 1848. This explains the tremendous upside potential in DGTX.

Of course, there are also risks involved when investing in an innovative product. The remainder of 2019 will be very exciting for Digitex and its native token!

Full Disclosure: I own DGTX.

Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice nor is it a replacement for advice from a certified financial planner.

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