TannerJ

BTC: The Big Short 2022 📉🐻

Short
BITTREX:BTCUSDT   Bitcoin / Tether
When people live on hopium they detach from reality and refuse to look at the bigger picture

Analysis paralysis is an inability to make a decision due to over-thinking

It’s usually accompanied with an overall sentiment of wishful thinking in the financial markets

This translates to extreme fear and greed, the more fearful or greedy investors are, the harder it gets to predict the next market move. This is especially true when markets are at new all time highs or lows.

You guessed it, current market readings are overbought, everyone is greedy and wants in, and prices are at new ATH

Sooner or later this leads to one end… and it’s much simpler and uglier than you think

Crypto first, others follow

Crypto markets has relatively proven to be test grounds for conventional stock markets, as almost every major crypto crash is followed shortly by a stock market crash

I strongly believe we’re on the verge of a recession at the very least, others might even call it a depression

My view depicts an imminent bitcoin & crypto market crash, followed by a stock market crash initiating a long-term bear market and a chain reaction of global recession

Without further ado, let’s dive in!

The Technicals

Yield Curve

The yield curve shows the relationship between short-term & long-term interest rates of U.S. Treasury notes

Usually, the longer the duration, the higher the interest rate, but when the rates draw closer to one another, the yield curve flattens. An inversion of the curve is typically seen as a warning signal for the market

Long story short, The yield curve has flattened recently, with long-dated bonds nearing their lowest point for a year

Last time this happened in 2018 bitcoin crashed hard!

Consumer Price Index (U.S.)

CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services in the U.S.

Pre 2008 recession, the CPI was at an all time high of 5.6%, currently it’s at an ATH of 6.8%

Money Stock

You can’t print money forever!

Scarcity is the definition of value. If everyone have it, why would they want it?


In fact, this is why economies plunge and currencies become worthless just like in Venezuela and Lebanon

Quantitative easing ( QE ) is a monetary policy whereby a central bank purchases predetermined amounts of government bonds or other financial assets in order to inject money into the economy to expand economic activity

This fancy term simply translates to creating more money whether physically or digitally out of thin air!

The Federal Reserve has printed unprecedented amounts of money to support the coronavirus-stricken economy

Data from the Fed shows that a broad measure of the stock of dollars, known as M2 , rose from $15.4 trillion at the start of 2020 to $21.18 trillion in December 2021.

The increase of $5.78 trillion equates to 27.28% per cent of the total supply of dollars.

It means more than one in four dollars was created in 2020 and 2021 !


U.S. Dollar Strength

U.S. Dollar Index ( DXY ) represents the value of the United States dollar relative to a basket of foreign currencies, most significant of which is the Euro , accounting for 57.6% of the basket

As of this writing, the DXY has failed twice to break historic resistance level of Fib 0.618 around 100 and unless it’s able to break it this time (which i doubt considering the over-bought RSI ) it’s expected to pull back to previous support of 80 at least, if not retest ATL of 70

The EUR on the other hand is expected to rise as a hedge against the USD

Bitcoin

Technical Analysis: Overview

Looking at the weekly and monthly time frames, you can clearly see ~$70k price rejected twice with a double top , zoom out a little and a head & shoulders pattern is half complete with a declining volume , an over-bought RSI , a bearish MACD , and a widening BB.

Price action Scenarios

  • Best case scenario is we climb up one more leg to hit the last Fib 4.236 retracement from 2017’s ATH to 2018’s ATL at around $73.5k-$74k (depending on the exchange)
    The only way we can have another bull-run continuation is if we manage to break-out and close weekly above $74k
  • Average case scenario is an H&S right shoulder at $53k, if we manage to break-up, it could be a bull trap retest to $58k-$60k
  • Worst case is we just keep dumping to retest previous key support levels at $42k, $36k, and $30k which is the neckline of the double top
    If we can’t hold $30k then it’s downhill from there to $20k, $16k, $13.5k, $11.5k, and lastly $9.5k which could be the last time ever for BTC hitting 4 digits again, as $20k will be the new support

This has confluence with the intersection of 0.5 pitchfork (19850-3217-64802) and 0.5 pitchfork (64802-28149-68974) and Fib 0.382 (19850-3159) at $9534 which makes sense when viewed on a log-scale chart on the 1W frame, you can clearly see a strong support zone there.

BTC Dominance

The inverse correlation between BTC price and its market dominance means that when BTC is at ATH, BTC .D is at ATL

This is exactly the case right now where BTC .D is currently at 40 .5% and seems en route to retest previous support at 37.5% thus forming a huge double bottom ready to bounce back up strongly
-----------
Stay Safe, Don’t lose your money, It’ll be painful for the unprepared

See you on the other side, inch-Allah

Godspeed
-----------
You can read more here: I predicted the 2018 bitcoin crash... It's time to sell 📉

DISCLAIMER: Not Financial Advice! Please trade at your own risk.
Trade active:
Death cross on the Daily
RSI bearish divergence on the monthly
MACD Signal cross on the monthly
Bearish weekly candle closure
Declining volume on weekly & monthly

Sorry guys... Party's over

Long cold crypto-winter ahead
Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.