I hope you're all taking care of yourselves during these unprecedented times. I was requested by a lot of you to do a high time frame analysis on the future of bitcoin, and where I am looking to enter & exit the market. Interestingly, if you follow the trading plan in on the chart, you would of seen a 1,566% yield! It is absolutely ridiculous we have an opportunity to trade an asset this volatile! I find observing the chart behaviour on a high-time frame eliminates all the noise.
Technical Analysis:
- We are currently ranging for the past 3 years in a long-term bullish pennant. This is a bullish pattern in which favours the bulls in the long-term. As we approach the 'pinch' point we see a breakout to the north and test all time highs. - We are seeing stages of accumulation indicated by volume and pattern behaviour. An example of this scenario occurred December 18' to April 19'. - I'm expecting there to be an additional distribution stage at the top of the Pennant around 9k & with one more re-accumulation occurring before lift-off.
The Fundamentals:
As we approach the most important halvening in history to date - we are seeing big accumulation occurring, these are what one would call a 'whale' or 'market-makers' i.e. exchanges. They are smart money with very strong hands. They are accumulating for the long-term. With the state of the economy where it is today, I foresee a depression occurring denoted 'The Great Depression of 2020'. & therefore I have never been more bullish on Bitcoin. I expect to see a lot of Nations adopt a digitalized tokens, in which we should see greater demand shift to Bitcoin, as one would not want to hold a state own coin when decentralized tokens are a viable option.
FAQ:
What do you mean by Accumulation? Distribution?
Richard Wyckoff (1873-1934) is considered one of the five "titans" of technical analysis. Along with Dow, Gann, Elliott & Merrill. (Research all of these if you haven't already!).
An example of accumulation occuring on a short-ish time frame is below:
1. What is Bitcoins Halvening?
Bitcoin is a deflationary Currency. Overtime the inflation rate is reduced. In-fact, every 210,000 blocks, approximately 4 years - the reward per block is halved. This is Satoshi Nakamoto (pseudonymous creator of Bitcoin) ideology to managing inflation.
2. Why is Bitcoins 2020 Halvening so important?
- Currently, the reward for mining a block is 12.5BTC; in May this will be reduced to 6.25BTC. At present, the annualized rate of "inflation" is approximately 3.75%; with an average of 144 blocks mined per day, at 12.5 BTC each, yielding approximately 1,800 new BTC each day.
- Post May 2020. Bitcoins inflation rate will be 1.875%. As a result, Bitcoin will have an inflation rate lower then most of the global countries. Why is this so important? One would be advised to hold Bitcoin as the supply
Bitcoin is a non-fungible token (NFT) unlike FIAT currency. It cannot be manipulated, the inflation is fixed and therefore we should see the allocations of personal & institutional capital flow into Bitcoin.
3. Can you explain this in simpler terms?
Currently today we operate in a capitalist society in which the Sovereign banks can effectively print more money and assigning more debt to their Balance Sheet. This is a broken system in the long-term as an increase in supply de-values the price of an asset in the long-term. As Bitcoin is a non-fungible token (NFT) unlike FIAT currency; it cannot be manipulated, the inflation is fixed and therefore we should see the allocations of personal & institutional capital flow into Bitcoin, as there will be greater demand & incentive to hold Bitcoin.
4. What do you mean by Supply/Demand?
OK. The price or 'intrinsic value' of an asset/good is determined upon the supply & demand. The more people demand of it, the price goes up, the more supply, the less demand, and vice versa. Real world example today we have all seen are hand sanitizers! Demand has gone through the rough, and as a result, the price has shot up. (I hate the concept of profiting from the expense of one's health.)
Therefore, as Bitcoin is a hedge against today's capitalistic financial system, the demand will go up. Current breadcrumbs are being left today by certain institutions *cough* FED *cough* who are alarming more and more people about the issues we are seeing with quantitative easing.
5. Weren't you Bearish?
Short-term I'm bearish. I think the rally last week was overstretched and we should reclaim the lows. This is a good time to enter into a long-position for the long term.
Broken Wedge:
I hope this wasn't too long guys! If you found any of it useful, drop a comment or pop a like and I will be most grateful! Equally I am launching a website very soon which will have some useful content. Equally, visit the link in my signature and let me know if you like the look of it already!
Please provide feedback here. Too long? Not enough explanation? More TA etc etc. Any questions pop it here!
InnerWorker
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@monetae_anon,
I really love the way you provide the information. The length is perfect for the content provided.
Could you do the same for XRP and Ethereum?
Thank you
monetae_anon
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@CryptoZeta, Will look into this for you over the coming days! Look out for it.
ArShevelev
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@CryptoZeta, @monetae_anon I found Interesting theory about accumulation & distribution on your chart. To me it seems like it make sense in lower TF too, marketmaker on bitcoin usually trading within accumulation and distribution pattern.
I've made a new review on 4h chart of btc-usd, consider take a look and love to see your review on my idea 🤝