Bitcoin BTC Consolidating In Neutral Zone
After a relief rally across all markets, we have seen a decent rise in BTC, breaking a key downtrend it was stuck in for roughly 3 months. Now a key point here is just because there has been a break of the downtrend, doesn't mean it doesn't form another one right after. This happens all of the time. Im not saying this is going to happen, only that a breakout is not the end all be all indicator. It only shows a short-term change in the trend rather than the Mid/Long term trend.
Price needs to stay above 40k to maintain the Neutral Zone. Any break lower is cause for concern.
As the title has stated, BTC has climbed back into what I regard as the neutral zone. In this area, price is neither favored in one direction nor the other. Rather, it is a range BTC will likely flow in before deciding the Mid-term trend. The one thing I would note is the extended RSI resistance BTC has formed since Jan. 2021. Loss in momentum, over long periods of time, eventually leads to a steep drop. We have seen many examples of this in the past.
Here 3 smaller examples of this we have seen over the last year. Remember, this is on a bigger scale to impact will be bigger as well.
Prices moving up and RSI is trending down.
I am hesitant to make any hard predictions before March because I'm anticipating the first steps of FED's interference in the markets to take place then. My thesis currently is the bounces are occurring now in anticipation of the inevitable Rate Hike/QE in March. Most are anticipating a .50 Rate Hike and are downplaying it as if it won't matter. History tells an entirely different story altogether, and every single time there has been a hike and/or QE we have seen significant losses. At what point in time varies, but by the end of the FED's tightening cycle 100% of the time there has been a crash that occurred.
The fact is we can see anywhere from 3-to-7 rate hikes this year alone and this can't possibly be ignored. Yes, there has already been some pricing in anticipation but we have already remade half of that ground. If you think the pain is over in relation to QE and the FED, I strongly think this is the wrong approach.
The last thought ill leave off on is the mass adoption argument for Crypto, mostly, but really this point stretches to the Stock Market as well. In 2020, we saw the biggest inflow of retail investors than I believe to be ever before. Both in stock and crypto, there was euphoria. Prices exploded and created an immense amount of FOMO. After this crazy euphoria, we saw a steep 50% drawdown in May 2021. At this moment, I'm seeing more celebrities than ever before promoting crypto and their related projects.
I think these individuals are going to use their resources to advertise crypto every chance they get during the Superbowl and will likely create a sell-the-news event. All eyes will be on Football and the Crypto adverts.
While I'm not giving any specific targets in this post, (I likely will soon), you can probably gauge where my sentiment is for the Mid-Term. I can go on and on about the possible fundamental impacts of inflation, slowing economic growth, QE in relation to approaching the end of a decade+ long Market cycle but this has to come in a different more structured post.
Thank you for reading the analysis and I hope I have given some quality information to think about. This post is not meant to sway you one way or the other, but rather to engage your thoughts on broader ideas so you don't fall into bias and even worst, Confirmation Bias. Any comments are welcome down below;
I've been really short on time the last few weeks which is why my posts have grown thin. I am doing my best to fix this and create quality posts to force you to think and analyze, rather than just tell you "Up Only". In the meantime, Happy Trading!
Price needs to stay above 40k to maintain the Neutral Zone. Any break lower is cause for concern.
As the title has stated, BTC has climbed back into what I regard as the neutral zone. In this area, price is neither favored in one direction nor the other. Rather, it is a range BTC will likely flow in before deciding the Mid-term trend. The one thing I would note is the extended RSI resistance BTC has formed since Jan. 2021. Loss in momentum, over long periods of time, eventually leads to a steep drop. We have seen many examples of this in the past.
Here 3 smaller examples of this we have seen over the last year. Remember, this is on a bigger scale to impact will be bigger as well.
Prices moving up and RSI is trending down.
I am hesitant to make any hard predictions before March because I'm anticipating the first steps of FED's interference in the markets to take place then. My thesis currently is the bounces are occurring now in anticipation of the inevitable Rate Hike/QE in March. Most are anticipating a .50 Rate Hike and are downplaying it as if it won't matter. History tells an entirely different story altogether, and every single time there has been a hike and/or QE we have seen significant losses. At what point in time varies, but by the end of the FED's tightening cycle 100% of the time there has been a crash that occurred.
The fact is we can see anywhere from 3-to-7 rate hikes this year alone and this can't possibly be ignored. Yes, there has already been some pricing in anticipation but we have already remade half of that ground. If you think the pain is over in relation to QE and the FED, I strongly think this is the wrong approach.
The last thought ill leave off on is the mass adoption argument for Crypto, mostly, but really this point stretches to the Stock Market as well. In 2020, we saw the biggest inflow of retail investors than I believe to be ever before. Both in stock and crypto, there was euphoria. Prices exploded and created an immense amount of FOMO. After this crazy euphoria, we saw a steep 50% drawdown in May 2021. At this moment, I'm seeing more celebrities than ever before promoting crypto and their related projects.
I think these individuals are going to use their resources to advertise crypto every chance they get during the Superbowl and will likely create a sell-the-news event. All eyes will be on Football and the Crypto adverts.
While I'm not giving any specific targets in this post, (I likely will soon), you can probably gauge where my sentiment is for the Mid-Term. I can go on and on about the possible fundamental impacts of inflation, slowing economic growth, QE in relation to approaching the end of a decade+ long Market cycle but this has to come in a different more structured post.
Thank you for reading the analysis and I hope I have given some quality information to think about. This post is not meant to sway you one way or the other, but rather to engage your thoughts on broader ideas so you don't fall into bias and even worst, Confirmation Bias. Any comments are welcome down below;
I've been really short on time the last few weeks which is why my posts have grown thin. I am doing my best to fix this and create quality posts to force you to think and analyze, rather than just tell you "Up Only". In the meantime, Happy Trading!
Comment:
Thank you to everyone who has taken the time to check out the analysis and show support, I have linked my recent update for Bitcoin as I do believe it will prove useful in the coming weeks/months. As always I greatly appreciate the support and hope the content is insightful and most of all, useful.
