Bitcoin at the weekly (logarithmic) view. Logarithmic scale handles volatility over long periods of time (investment strategy). Linear scale handles shorter-term periods (trading).
Let's simplify this.
1. Green dashed line has been the 2020 trend line. If BTC closes below here, then we might see a test to the mid-$20k.
2. Blue lines with dashed white lines are two parallel channels.
3. Blue and orange wavy band is the 20 week SMA and 21 week EMA. This is Bitcoin's primary goal - to sustain above that band.
4. Bitcoin might breakout when it breaks the weekly RSI resistance which might takes months.
5. This is not a bear market. This is crypto. 20% from the ATH is subjective and media driven. Don't be media cattle. Media was bullish right before the mid-cycle pullback. Think about it.
6. This is crypto. You will not get immediate rewards. This is a true test of patience like trading the VIX.
Bitcoin is trapped between a series of long-term trend lines and moving averages.
Most likely course: Consolidation for half of the summer, then pullback, then grind back to recovery. I'm in the camp that this might be an extended cycle similar to what we saw in 2018-2019. To hodlers, this is painful. To new investors, my team and I call this "Operation Second Chance."
Less likely course: V-shaped recovery. Doubtful since there is still too much bullish sentiment.
Bearish plan of action: If $30k breaks, then there are still the $29k, $21k, and $16k supports according to logarithmic regression. If it gets down there, those are long-term buy levels. Like, I will ask my wife to hide and store my hard wallet again from those levels.
What is more important? Price or time? Both are. In the case of crypto, everyone forgets the time element. How do you crush bullish sentiment? It's by time. One can remain optimistic if there is the expectation of a V-shaped recovery in 2-3 weeks. What happens to that sentiment when price went nowhere for several months? That's how the weak hands give up.
What does crypto tend to do when all the weak hands get bored/give up and no one is paying attention to it? Crypto tends to rally during those times. It's a very, very similar price action with gold. Gold was in a downtrend or consolidation for 8 months before its bullish reversal. I suspect that Bitcoin will do the same where it will just consolidate for months before rallying like no tomorrow.
Quit worrying about micromovements. The more you worry about micromovements, the more you become confused when a big action occurs. For example, people were celebrating when Bitcoin was over $60k. In the logarithmic view and the cycles charts, the more experienced investors new a mid-cycle pullback was near by focusing on the big picture. Now, people are confused with a mix of bullish and bearish sentiment. The permabears are celebrating but definitely do not see the big picture here. In the bigger picture, Bitcoin behaved exactly like it did in 2013 and 2018-2019. Quit worrying about Elon Musk. This big pullback was known as the mid-cycle pullback and it was right on time. Media and retail traders were just too inept and blame is on Elon Musk's tweets. Trivia: more than 70% of the energy used for Bitcoin is from wasted/recycled energy... Think about it... A miner's second biggest cost (besides equipment) is energy cost. Using wasted energy (energy that was about to be thrown out) or renewable energy reduces the cost and increase profit.
This is NOT financial advice. I totally do NOT recommend shorting Bitcoin whatsoever. You wouldn't believe how many permabears I've seen who shorted Bitcoin since the $8,000s. Any permabear who thinks this will go to $0 within 5 years is very likely a gold bug or have no idea what crypto was made for. FINTECH companies are gearing up to get a foot in this market in the near future. Hedge funds have already started dabbling into crypto (both long and short).
Crypto is unique because it's one of the last frontiers that Millennials can invest in. Bond rates are 1-2%. Stock market is higher than ever. Real estate prices are grossly overpriced... and permabears complain about the stock market... Finding a decently priced house has been 100x harder. Commodities pretty much have a set range. QE ruined CDs and saving accounts. With inflation averaging 2.7% per year, what other asset out there can beat inflation rates and not grossly overpriced? The closest things are stocks and crypto.
I plan on re-accumulating with every pullback from here. That said, I want confirmation that the supports are tested as risk management. If I miss the absolute bottom, oh well. If you are worried about missing the absolute bottom, you're worried about nickels and dimes in the long run.
Let's simplify this.
1. Green dashed line has been the 2020 trend line. If BTC closes below here, then we might see a test to the mid-$20k.
2. Blue lines with dashed white lines are two parallel channels.
3. Blue and orange wavy band is the 20 week SMA and 21 week EMA. This is Bitcoin's primary goal - to sustain above that band.
4. Bitcoin might breakout when it breaks the weekly RSI resistance which might takes months.
5. This is not a bear market. This is crypto. 20% from the ATH is subjective and media driven. Don't be media cattle. Media was bullish right before the mid-cycle pullback. Think about it.
6. This is crypto. You will not get immediate rewards. This is a true test of patience like trading the VIX.
Bitcoin is trapped between a series of long-term trend lines and moving averages.
Most likely course: Consolidation for half of the summer, then pullback, then grind back to recovery. I'm in the camp that this might be an extended cycle similar to what we saw in 2018-2019. To hodlers, this is painful. To new investors, my team and I call this "Operation Second Chance."
Less likely course: V-shaped recovery. Doubtful since there is still too much bullish sentiment.
Bearish plan of action: If $30k breaks, then there are still the $29k, $21k, and $16k supports according to logarithmic regression. If it gets down there, those are long-term buy levels. Like, I will ask my wife to hide and store my hard wallet again from those levels.
What is more important? Price or time? Both are. In the case of crypto, everyone forgets the time element. How do you crush bullish sentiment? It's by time. One can remain optimistic if there is the expectation of a V-shaped recovery in 2-3 weeks. What happens to that sentiment when price went nowhere for several months? That's how the weak hands give up.
What does crypto tend to do when all the weak hands get bored/give up and no one is paying attention to it? Crypto tends to rally during those times. It's a very, very similar price action with gold. Gold was in a downtrend or consolidation for 8 months before its bullish reversal. I suspect that Bitcoin will do the same where it will just consolidate for months before rallying like no tomorrow.
Quit worrying about micromovements. The more you worry about micromovements, the more you become confused when a big action occurs. For example, people were celebrating when Bitcoin was over $60k. In the logarithmic view and the cycles charts, the more experienced investors new a mid-cycle pullback was near by focusing on the big picture. Now, people are confused with a mix of bullish and bearish sentiment. The permabears are celebrating but definitely do not see the big picture here. In the bigger picture, Bitcoin behaved exactly like it did in 2013 and 2018-2019. Quit worrying about Elon Musk. This big pullback was known as the mid-cycle pullback and it was right on time. Media and retail traders were just too inept and blame is on Elon Musk's tweets. Trivia: more than 70% of the energy used for Bitcoin is from wasted/recycled energy... Think about it... A miner's second biggest cost (besides equipment) is energy cost. Using wasted energy (energy that was about to be thrown out) or renewable energy reduces the cost and increase profit.
This is NOT financial advice. I totally do NOT recommend shorting Bitcoin whatsoever. You wouldn't believe how many permabears I've seen who shorted Bitcoin since the $8,000s. Any permabear who thinks this will go to $0 within 5 years is very likely a gold bug or have no idea what crypto was made for. FINTECH companies are gearing up to get a foot in this market in the near future. Hedge funds have already started dabbling into crypto (both long and short).
Crypto is unique because it's one of the last frontiers that Millennials can invest in. Bond rates are 1-2%. Stock market is higher than ever. Real estate prices are grossly overpriced... and permabears complain about the stock market... Finding a decently priced house has been 100x harder. Commodities pretty much have a set range. QE ruined CDs and saving accounts. With inflation averaging 2.7% per year, what other asset out there can beat inflation rates and not grossly overpriced? The closest things are stocks and crypto.
I plan on re-accumulating with every pullback from here. That said, I want confirmation that the supports are tested as risk management. If I miss the absolute bottom, oh well. If you are worried about missing the absolute bottom, you're worried about nickels and dimes in the long run.