#1 Thing About Bitcoin You Should Read TODAY

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
I apologize for the headline, it's merely an attention grabber. With that in mind, though, I would like to redirect your attention straight to this chart. First, a few important disclaimers.

1) The chart you're seeing is very simplistic, naive in its basis and cycle-oriented. In fact, this is a statement almost ALL TradingView ideas should include, but hardly ever do.
2) The calculations are approximate with far too many assumptions to be taken as a holy grail. For example, the halving in 2020 could happen anywhere from February to November. The span is huge.
3) You and I don't have nearly enough data to consistently assume such scenarios. We simply don't. Similar charts are drawn all over the place, but again, you hardly ever see people notify you of this. I will incorporate one additional element into it though, and that is the Stock to Flow indicator, which I believe is one of the few fundamental tools we can use in BITSTAMP:BTCUSD .

First, good work and thank you to user @GoldenNaim for creating a rainbow version of the original indicator. It's very clear and straightforward. To explain the basis of the tool, I will quote his original post here:
" SF = stock / flow

Stock is the size of the existing stockpiles or reserves. Flow is the yearly production.

With Bitcoin , we can know both of them :
  • Stock = How many Bitcoins are currently in circulation
  • Flow = How many Bitcoins are created each year

The exact formulas for the two prediction lines you see can be found in his original post here.

I made some additional calculations and laid them on the chart.
As you see, the rainbow suggests where we are in a cycle, i.e. how many days until from the next halving.
  • The first halving happened on 28/11/2012, and it took 1318 days to reach the second.
  • The second halving happened on 9/7/2020, and it took 1402 days to reach the third.
  • The third halving happened on 11/5/2020, and assuming the same prolongevity of the cycle, it will take 1491 days to reach the fourth. This assumptions is very simplistic and not grounded in data that would be consistent over a long period of time. Please, remember this.

Your mind is desperately searching for patterns, and therefore I don't like using purely technical analysis not grounded in reality; you're using past experiences to predict the future trends. Bitcoin's Stock to Flow, the hash rate and the presence of halvings are among the few fundamental aspects we can utilize when talking about BITSTAMP:BTCUSD . The rest, as you may have found out, is most of the time just floating garbage.

Let's do a thought experiment. This mind exercise and the questions given are for you to contemplate, and hopefully something you can take away from this chart. You don't have to read the rest. Looking at BNC:BLX and the following, I want you to question and consider:
1) How are bitcoin cycles and halvings interrelated?
2) How consistent is the rainbow in predicting the current price against the cycle, assuming that time-spans between halvings will prolong further?
3) Can Elliot Wave theory actually be applied to bitcoin , knowing that each ~four years, the stock drastically changes? Had people using the theory considered it at all?
4) How will bitcoin cycle's top and bottom be positioned against future halvings? Will the technology be outdated by then? So far, halvings have "initiated" upward thrusts, but what a cycle's top happens during or close-to a halving? Circle to question one.

Follow me if you want.
Comment: Volatility on the 4-hour timeframe has completely evaporated, and the market is almost ready for a big move. My initial bias is bullish, but nothing is certain. What I do know for sure, though, is that the potential is becoming big. Imagine Yellowstone.


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