Bitcoin has undergone a paradigm shift recently. It's not retail investors and niche buyers experiencing FOMO, this time around it's billionaires, multinational corporations, investment firms, and even nation-states. I don't trade on fundamentals, I need to see indicators confirm something quantitative (usually on multiple time frames) before executing most trades, however I think it is helpful to see if and how the technical indicators line up with the fundamentals. I'm extremely long on BTC and when friends looking to casually get into BTC ask me when I should buy, I tell them to dollar-cost average at any price, if we're talking about BTC as a long-term investment or retirement account, it's never a bad idea to pick up some if you can afford it.
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The chart above simply outlines accumulation periods and their following price increase, which averaged about 20% each time. If we are in an accumulation phase and the trend continues, we may see 32k after the first week in January. This would be a substantial gain for essentially everyone who holds Bitcoin, and a very likely chance to take profit. My personal thought is that this will be the last accumulation phase leading up to a price increase before we see massive profit taking. Make sure to adjust your stop losses after large price increases, make a plan, and stick to your strategy.
Fundamentals
Billionaires entering the market.
Companies showing interest in using BTC as a reserve currency.
General warming up to Bitcoin as a reserve currency and hedge against the USD.
Demand > Supply
Technicals
Support levels forming in Volume Profile.
On Phoenix Indicator, price action outperforms the market momentum and (aside from bear trap in the first period of accumulation ~20k) LSMA trends upward at the end of accumulation phase.
Each accumulation phase has been followed by a 20% increase in price.
We're in what appears to be an accumulation period now, I'll be looking for the Volume Profile to to show support AT LEAST as strong as the previous by the end of this accumulation period. Now that investors with a lot of money to spend are piling into Bitcoin, the demand for it is much more than the supply. Billionaires are seeking to allocate a high percentage of BTC to their portfolio, companies are discussing using it as a reserve currency, and some of the larger holders are nation-states themselves. Bitcoin has established itself as a store of value, and the skeptical whales are convinced it's not some digital scam. Custodians like Square and Coinbase have BTC already, their customers are purchasing it every day, requiring them to refill their coffers as time goes on.
Keep in mind, there are only 37.5 BTC being produced every day on average.
This is not financial advice, simply an observation regarding how the market is playing out and meta factors influencing it..
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NOTE: - The "Price trends above market momentum." in the Phoenix indicator refers to the initial start of the green box, during accumulation this fluctuates. - $32,637.84 is an **exact** 20% increase, I am more interested in either 30k or 32k for their psychological impact. Turns out, people like round numbers.
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Market momentum shows no sign of stopping, trading volume for today alone (just a few hours in) is over $1 billion USD and 55k BTC.
Order books indicate that there's relatively few sellers between the current price ($33,850) and $36,000. Currently 250 BTC on the books at $35,000, and another 250 BTC at $36,000.
Again, momentum shows no sign of stopping right now. If 36K is broken, the next large stop in the order book is at 50k, with 100 BTC currently on the books for sale at that price.
Nothing would surprise me at this point. If we break 35k, my guess is most of the sellers at 36K are going to move up to the 50k mark as the demand is so insanely high right now.
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Great few hours for day traders, as within the last hour the price has gone between $30-34k multiple times, I've traded a few of these swings to accumulate some more BTC, transferred my profit off-exchange.
I've placed the following OCO order for my initial capital that I moved onto the market in the last week after taking my accumulated BTC from the last few hours:
Price: $35,000 Stop: $31,000 Limit: $32,000
This setup does the following: - Places a realistic sell (according to order books) at 35k. (Order books indicate that there's a large amount of BTC for sale at 36K, but greed has been the downfall of many trades before. - If price goes below 31K, and my 32k sell executes, I can take an 8% average profit on all my day trades this morning and a 30% profit on the coins I've moved onto the exchange in the last month (10% more than I initially expected). - If we move sideways above 31K come tomorrow, I still have my BTC, I can back out of the trade, hold, and reassess the market tomorrow.
As always, I never have more than 25% of my BTC holdings on an exchange. My goal is to accumulate BTC as I'm extremely bullish long-term (reserve currency for multi-national company/nation-state bullish over the next few years). 75% of my trading is simply DCA and holding.
I would not recommend trading at these prices unless you have experience day-trading as the risk is high and we're in uncharted waters. Hold, continue to DCA if you have been, and let price discovery do it's thing as we watch the market together.
Always DYOR, and look for confirmation when trading. - Don't trade more than you're willing to lose, and don't get greedy. - An 8% profit above 30k might not be the 10-20% you were looking for, but it's better than losing money.
Stay safe, stay smart, and a happy new year to all!
Next time i read your comments, you didnt see enough volume in btc for upward pressure. You are seeing enough volume this time, right?
HeyJonBray
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@susta , Short answer, yes. Demand > Supply which is very good long term. Whales want a higher amount of BTC, not a higher BTC:USD value, they will be praying for a market pullback to at least 19k (as am I) to accumulate.
Seeing that the price action (green line, lower indicator) breaks above the momentum of the market (white area) on the same candle that begins a 20% increase, which is bullish and indicates room for price movement upward. The RSI (red line, lower indicator) is decreasing as price remains stable and LSMA (blue line) increases, further confirming that we're in accumulation.
What I want to see, is on the right side of the indicator, the Volume Profile. Largest peak is around $19,200, which means over the span of that chart, most of the volume was traded at that price. That is our first accumulation zone, and longest one, and also includes a bear trap (why it's the largest peak/support in the profile). Our second support in the volume profile is around $23,300. The peak is about half as high as the lower one, and the accumulation phase lasted for about half as long. That confirms a trend.
What I want to see is the third support forming at 27K be proportional to the one below it. If the accumulation period lasts the same amount of time as the previous one, and the peak in the volume profile is the same height, that is strong confirmation that the price will continue to trend upward. If we see longer accumulation and a much smaller peak, that's a sign we may see a reversal.
All that being said, the demand for BTC right now is vastly more than it's supply. Smart investors will wait for pullbacks as the end goal for institutional investors entering the market now is to maximize the total amount of BTC they own. Smart money knows the USD may not live to see it's 50th birthday, and will certainly not be of value much longer.
Stepping away from technicals and looking at the long-game, the value in USD won't matter much in 5, 10, 15 years from now. The only thing that will matter is how much BTC you have.
susta
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@HeyJonBray, i wrote "Next time" but i meant "last time", strange times indeed :D, thanks for your reply
Mamlek
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Nice chart, i love your idea.
HeyJonBray
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@Mamlek, Thank you and take care! Looking forward to seeing how it plays out, maybe 2021 will be off to a good start and a nice profit-taking will give us a chance to buy BTC at a relative discount.
Mamlek
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@HeyJonBray, Yeah sure, Im sure there will be a massive selloff at $30,000 so im also taking my profits at that price too. thank you once again for the idea shared
HeyJonBray
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@Mamlek, Yes, with each price increase I have moved my stop loss to the top of the previous support zone. If we break 30k in Jan, I'm setting my stop loss there and forgetting about it. Greed has it's limits, and whales want more BTC, not more BTC value in USD... I would be very surprised if there is not a large sell-off at either 30k or 32k on the nose.
HeyJonBray
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Thanks to @WyckoffMode for the Phoenix Ascending Indicator.
Mamlek
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@HeyJonBray, Can you check yfiusdt and give us your idea on that token too my friend?
HeyJonBray
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@Mamlek, Absolutely! Thank you for taking the time to like and comment, I'm trying to grow my presence on TradingView, so as long as I can keep the likes and subscriptions coming I'll gladly give my take on any crypto pairs.
I just checked YFI-USDT quickly, there's no indication of upward price movement. My at-a-glance interpretation is that it will test 18k support zone, which isn't (relatively) strong, most support is at 14.6k looking at the other indicators quickly, one of those levels will likely get tested by the end of January. But let me do a little more research on YFI as well, that was only looking at the 6H and very quickly.
This is a pair I've been particularly interested in for a long time, have been watching but never traded. I will post a detailed breakdown of the chart tonight.
I got myself some more and updated podcasting equipment for the holidays, so I'll probably do my first video analysis on YFI-USDT :)