This is a short post. Over the last few months, I've written and spoken about why Michael Saylor's entrance into Bitcoin has contributed to my skepticism about the valuation of the market, since the MSTR chart eerily echoes the bubbly behavior from the dotcom boom. As leverage and profit come out of the market, I think MSTR will be severely impacted. Saylor himself has said that holding MSTR is the closest you can get to holding a Bitcoin spot ETF. I think this is all going to backfire, and result in a precipitous drop for both. If MSTR declines back to $160 per share, I expect Bitcoin also to fall at least 50% and break the 20k line.
As shown on the left, Bitcoin can bounce at this trendline to begin the next month and perhaps make an attempt at the 50k level. This is seeming less and less likely, but you never know! I always acknowledge the alternate possibility. We'd need to see a dovish shift from the fed and/or student loan cancellation for that to occur, in my opinion.
Immediate Bearish targets for Bitcoin: 17.2k 13.4k 9.7k
MSTR: $227 $165 $121
This is not meant as financial advice. This is meant for speculation and entertainment only - this represents my opinion. There are plenty of other opinions out there :)
-Victor Cobra
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Before any further downside, it's possible Bitcoin will want to test the 9 month EMA as resistance (just above 42K). All depends on traditional markets at this point.
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Current structure shows a short term bounce off the bottom of this little wedge. Volume is still incredibly low. To test 42K, Bitcoin will need to push above the $39.6 level, and the $40.5 level.
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The promising thing for bulls here is that sell volume has also dropped off, though sellers were quite strong above 40k.
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A break BELOW that wedge would be extremely bearish, though there is still room to tap that giant ascending support, which now perfectly intersects with the wedge.
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Volume has been extremely weak on the bounce, so wouldn't be surprised to see the floor fall out, pending how markets look tomorrow. Right on support here, so price action in either direction should be quite interesting.
Like the .com bubble, Saylor got in too late, he should have bought Bitcoin years ago.
GT350
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Ah, no. I think he owns less than 1% of BTC. The only thing that would hurt is Elon and Michael both selling out of their BTC at the same time. Elon is a maybe and Michael never. BTC is just gaining too much acceptance and it has held up well even with the Lunatics imploding. I see BTC decoupling from the NASDAQ in the coming six months. If a spot ETF is approved then MSTR will be a rock ship if it has too many shorts against it. It is valued at half its BTC holdings now and no value for the core software business. Michael is an aircraft engineer that knows holding cash would just evaporate at 22% per year with current inflation. Just look at Cathie Woods' darling NNDM. He raised huge cash and is just sitting on it watching it evaporate to inflation. He'd be better off taking the MSTR approach and putting it in an asset that can stay ahead of inflation long term. I'm long MSTR below $190 as well as CSLK, HUT and a couple beat up BTC miners.
VictorCobra
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@GT350, There is no proof that Bitcoin will stay ahead of inflation long term. Just look at Bitcoin price versus M2 money supply. Right now, it's basically back to where it was at the end of 2017. Bitcoin is worse than material assets or stocks because if it ceased to exist right now, almost NOTHING would change about society. Until this changes, Bitcoin and cryptocurrencies are superfluous risk assets. I wasn't entrenched in this opinion until living through this recent cycle - was still willing to give it the benefit of the doubt, but there have been too many signs for me to ignore.
ZeuCrypto
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@VictorCobra, Hello, can you please write down the signs you are referring to?
VictorCobra
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@ZeuCrypto, Which signs? You can read my other posts to see what warning signs I have been talking about.
VictorCobra
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@ZeuCrypto, Oh I see what you were asking - the warning signs. Well, much of it has to do with the amount of leverage across financial markets. Then, there's the fact that Michael Saylor pumped MSTR to similar heights during the dotcom boom and allowed it to crash 99% in value. There are the meme coins and bored ape NFT's, which are signs of peak speculative mania. This, plus inflation and a weak middle class, rampant inequality, etc. make the situation really terrible for markets. I've also noticed (having been through a complete cycle) that the projects with the most real world applicability are not the ones that increase in price. Here is my first truly long term bearish post about crypto, from January. Here's a post about asset growth and leverage: