Bitcoin is trying to establish yet another double bottom like formation, but there is no reason to get excited. Momentum across the board is bearish which means any buy signals are likely to be limited and/or lack follow through. Focus more on the levels ahead that offer some possibilities, NOT try to guess where Bitcoin is going next.
In case you haven't noticed, Bitcoin does not trade in isolation. It is affected by other markets like? The S&P500. On Friday, the S&P generated a sell signal and closed near its lows. This week, there is a possibility that the main support breaks which can lead to a more dramatic sell off. If the S&P can't rally, Bitcoin is going no where. Rising rates (see the bond market, see the U.S. Dollar) put bearish pressure on everything, especially highly speculative instruments like Bitcoin and alt coins.
So what to do now? Everyone tries to figure out the next move, point A to point B. Let the market figure it out and instead be prepared for the possibilities and potential setups that can develop at point B.
On my chart, there are two areas that I am watching that can potentially become point B. The 36K support OR the 40K resistance. I don't know which level the market will choose, but I will at least be prepared for some type of price action at either one of these levels.
IF 36K is reached, I will be looking for long setups BUT with very limited expectations. A reversal at this level does NOT guarantee any kind of sustainable change of the bearish environment. Knowing this means profit targets should be very conservative and expectations should be low.
IF 40K is reached, it is an area to be watching for new sell signals. The current environment favors a bearish scenario. This is where higher expectations are within reason. A test of 35K is still possible over the next few weeks. I don't short Bitcoin, so for me, this means I stay out completely.
Reacting price changes at the moment or other random information is the least effective thing you can do. Prepare in advance, have a plan. As long as the rising rate environment continues to assert itself (just watch the U.S. Dollar or bond market), bullish expectations or any dreams of a magical rally should be extremely limited. The cycle will change at some point, BUT the change will be a process which has yet to begin.
Thank you for considering my analysis and perspective. I hope you find it helpful.
you once said 30-50k is a good inventory/wholesale price for long term. do you still think this?
Free_Loader
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@simplejoe1 Marc mentioned that 35K is a good level to consider accumulating inventory, and that’s where most of the buying activity generally took place in the past. Knowing Marc’s analysis a bit now, once 35K is reached, I presume he would caution that 30K is probable (given the DXY/US10Y environment mentioned before). That being said, the retail trader is at the mercy of the Fed and Whales that dominate this market, so whatever is decided, we can just ride the wave up/down.
simplejoe1
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@Free_Loader, ok thank you. from risk/reward perspective it does seem like a good time to be buying for long term. warren buffet is buying stocks FWIW. but as marc says no one knows
Free_Loader
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@simplejoe1 Yeah, WB buying got me thinking as well. Then again, billionaires also get fleeced during a downturn. At this point, trust in everything is waning (at least from my perspective), and I don’t know whether going into a declining market at this time is a good idea. The 2 quadrillion derivatives market will never in a million years be “bailed out” by a few percent interest rate hikes, and the system is one way or another coming down -whether for the “Great Reset” or “Great Awakening” -in either case, a new system, one that’s built on trust, and actual assets, and real valuations has to be created. Otherwise we’re all just playing the casino, and the house always wins.
simplejoe1
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@Free_Loader, wow. strong words. what do you think is a good investment for such times? gold?
Free_Loader
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@simplejoe1, I just hate seeing the country (and world at large) being deliberately wrecked by banker greed, then again, the system we're in right now is corrupt by design, much like Marc frequently says that the retail trader is the one holding the bag at the end of the day, while the banksters make out with the heist. Gold is good, but silver probably has higher ways to go as far as ROI is concerned. Silver is also a unique commodity, being both a PM AND an industrial metal that's used in nearly everything technology and medicine-related. While no one really know how much of gold and silver is below ground, the mere fact that it's steadily consumed gives it the greater likelihood of bringing greater returns. It's also pretty cheap right now - like some say: they're literally paying you to take it from their hands. The silver rigging is greater than it is in gold, and when the pressure releases, the ROI will be tremendous. There's a few authentic *gurus I listen to (I'm discerning in what I gather, and like to have as much info as possible), like Bill Holter, Bix Weir (he has a YT channel that posts daily on it), and some others. I was never into PM until I heard these guys talk.
In my opinion, given the Fed rate hikes, there'll be downward pressure on PMs, so slightly better pricing MAY come, but understand that you're also going up against supply/demand issues, and at some price level, one simply won't be able to buy any physical because it'll be sold out. BTW, the US Mint has stopped producing silver eagles for YR2022, even though they're Constitutionally required to do so. If inflation continues to go up, I expect people to move more into PMs. This is where my faith in BTC/cryptos wanes because I just don't see the average Joe moving their last dollars from a paycheck into a declining (or even rising) asset - like spending $100 on BTC at 50K - I just don't see people doing that, vs. putting it towards food or something more tangible. Just my $0.02.