I'd be happy to hear criticism of it. I don't care about being right, I just want to make maximum money. :) I wanted to post it now while people are bullish, because posting something bearish while people are bearish is too easy and likely to just be agreed with due to recency bias.
Some caveats and my thoughts, sorry if this is wordy, I plan on pinning this post on my account so I can go back to it and see what I was wrong about and what I was right about, so I can adapt in the future and become better:
I'm a long term investor, the price may go up or down on short time scales, but for tax purposes etc. I prefer to just do one great buy-in with the bulk of my stack each cycle and hold. So I want the best possible entry. As I make more money, I will of course invest it throughout the cycle as long as we aren't in a bear year.
I care about capital preservation. I think it is easy to make money in crypto in bull markets and the trick is preserving it when the music stops each cycle (>80% drawdowns in BTC, 94% drawdown in ETH last cycle). I've accumulated a life-changing amount of money for me and I tend to err on the side of not losing that money vs. taking on more risk. Your risk tolerance may be different and I respect that. I wasted a lot of money in the last bear market and I don't plan on repeating that.
The gold line is basically the 200W MA, I prefer using the curve I've drawn because it covers more of the history of bitcoin. The 200W MA starts almost four years into the chart otherwise.
My thesis really distills down to one simple thing: waiting until the 1M RSI bottoms gives an optimal entry. This has been the case in the previous two cycles. Whether this repeats this cycle is TBD. I do think that trading on monthly time frames shows large trends that you can't see when you are zoomed in, and removes lots of biases and emotions that can steer you wrong.
The purple line is the Fidelity demand line you can find in their Bitcoin literature. This is the inexorable force pulling the price of Bitcoin up. The price oscillates both above and below this line, based on human psychology and interactions with the halving economics. Price goes above demand in bull euphoria and below demand in bear despondency. We have as of yet not crossed below that line and I believe we will. For people that think we will not do that, I would suggest caution as that would be an entirely new paradigm being introduced. Same goes for believing that cycles are lengthening.
The interaction between that purple demand line and the gold plunge protection team line forms a bear market buying zone where you should buy as much as you can as soon as you can.
I believe that Fed tightening the rest of the year will work in concert with the natural bear progression for Bitcoin and provide optimal entries sometime this summer. A chart comparing BTC and the SPY provides some interesting insight I have missed in the past. While in general the two are uncorrelated, any large dips in the stock market are reflected in the price of Bitcoin. The SP500 is currently only 8.4% down from ATH in a decade long bull run with tightening coming. I expect that dip to increase and drag down Bitcoin with it. And, like most things, I don't expect that to be priced in. :)
Some caveats and my thoughts, sorry if this is wordy, I plan on pinning this post on my account so I can go back to it and see what I was wrong about and what I was right about, so I can adapt in the future and become better:
I'm a long term investor, the price may go up or down on short time scales, but for tax purposes etc. I prefer to just do one great buy-in with the bulk of my stack each cycle and hold. So I want the best possible entry. As I make more money, I will of course invest it throughout the cycle as long as we aren't in a bear year.
I care about capital preservation. I think it is easy to make money in crypto in bull markets and the trick is preserving it when the music stops each cycle (>80% drawdowns in BTC, 94% drawdown in ETH last cycle). I've accumulated a life-changing amount of money for me and I tend to err on the side of not losing that money vs. taking on more risk. Your risk tolerance may be different and I respect that. I wasted a lot of money in the last bear market and I don't plan on repeating that.
The gold line is basically the 200W MA, I prefer using the curve I've drawn because it covers more of the history of bitcoin. The 200W MA starts almost four years into the chart otherwise.
My thesis really distills down to one simple thing: waiting until the 1M RSI bottoms gives an optimal entry. This has been the case in the previous two cycles. Whether this repeats this cycle is TBD. I do think that trading on monthly time frames shows large trends that you can't see when you are zoomed in, and removes lots of biases and emotions that can steer you wrong.
The purple line is the Fidelity demand line you can find in their Bitcoin literature. This is the inexorable force pulling the price of Bitcoin up. The price oscillates both above and below this line, based on human psychology and interactions with the halving economics. Price goes above demand in bull euphoria and below demand in bear despondency. We have as of yet not crossed below that line and I believe we will. For people that think we will not do that, I would suggest caution as that would be an entirely new paradigm being introduced. Same goes for believing that cycles are lengthening.
The interaction between that purple demand line and the gold plunge protection team line forms a bear market buying zone where you should buy as much as you can as soon as you can.
I believe that Fed tightening the rest of the year will work in concert with the natural bear progression for Bitcoin and provide optimal entries sometime this summer. A chart comparing BTC and the SPY provides some interesting insight I have missed in the past. While in general the two are uncorrelated, any large dips in the stock market are reflected in the price of Bitcoin. The SP500 is currently only 8.4% down from ATH in a decade long bull run with tightening coming. I expect that dip to increase and drag down Bitcoin with it. And, like most things, I don't expect that to be priced in. :)