As I showed in a previous analysis, BTC is setting up for a major retracement to the rising blue arc. The vertical red trendlines correspond to NVT sell signals on the weekly chart. Almost every single NVT sell signal has resulted in a decline of 70% or more, aside from the one that occurred in November of 2018, which resulted in a 52% fall. I believe that decline was reduced, because it happened toward the end of a bear market. This latest signal, came after a 330% rally, which leads me to believe that the correction could be severe.
In addition to BTC being under pressure from the NVT sell signal, price has fallen below the 50 day MA (in orange) and the 200 day MA (in purple.) Looking at the chart, you can see that for the past couple of weeks, BTC has been trying to get back above the 200 MA, but it has failed each time. This is incredible weakness that we haven't seen in the beginning or even the mid stages of any BTC bull market in history. So, provided BTC doesn't print a sudden recovery above those moving averages, I'm becoming increasingly confident that we're about to see a major fall in BTC.
This isn't the first time I've said that. I published a chart in May, showing why I felt that BTC was in a bear market rally, which literally nobody else was talking about at the time. At the time, that analysis got a lot of negative feedback, but I may be the one with the last laugh in the end. Admittedly, my timing for when I thought the retracement would be was a bit premature, but it appears to be happening nonetheless.
So, we have an NVT sell signal playing out, which historically has yielded corrections in the 70% range. That takes us right down to the regression arc, which I've been saying NEEDS TO BE TESTED, before the next bull market. We never tested it. So, I still believe that the rise to 13,800 was a bull market rally, and the evidence is mounting to suggest that BTC is poised for an epic fall.
People are way too bullish. Everyone thinks that they're going to be millionaires in a few years because they threw some money into crypto. What's really going to happen, is crypto is going to chew up and spit out the weak hands first. It's going to grind your faces into the pavement, and destroy your short term dreams, until you waive your white flags and run home to your Mommies.
Nothing is guaranteed. Bitcoin's log chart is the most beautiful chart I have ever seen, in my 11 years as an analyst, but there is no guarantee that it will last forever. The truth is, Bitcoin is an inferior technology to other solutions (like XRP) and there is very little (if any) adoption or real use of BTC. It can't scale, transaction fees explode when the blocks fill up, the lightning network is a mess, it has no real use case other than a "digital gold/store of value," and it lacks consistent innovation. It's over 60% centralized to China, it's TPS speeds are slow, someone owns 1/17 of all coins in circulation and, unlike Ripple, there is no protection in place (like cryptographic escrow) to ensure that they don't dump those 1,000,000 BTC on the market. Did I mention that it consumes more energy than small countries, even at it's currently relatively small market cap and network size, compared to other global markets? It's extraordinarily inefficient. BTC needs trusted third party solutions like the lightning network, but the "trusted third party" part is the antithesis of what BTC stands for. To paraphrase David Schwartz, second layer solutions such as the lightning network are inhibited by the deficiencies of the base technology.
Despite those negative points, BTC's log chart is still the most beautiful chart in existence. Despite those negative points, BTC could still rise to ridiculous prices. It has a very recognizable brand, it has the staying power that no other crypto has exhibited, there is also a lot of economic uncertainty in the backdrop that could be a boon for BTC and crypto. However, BTC is currently poised to test the resolve of everyone involved in this space. Everyone thinking that it will rise from the ashes, even if it falls back to the regression arc, could be unpleasantly surprised to find a breakdown below this rising blue arc, and an abysmal fall to worthlessness. Time will tell. The question is, if we fall from here, are you willing to hold to 5000, 4000, 3000 or lower? There is no guarantee that a recovery will come. I know that sounds grim, but I call it how I see it. The regression to the arc never happened, and BTC is showing that it may be setting up for that regression. If/when we get down there, will we recover? History says yes, until it doesn't. Personally, I do think there will be a future for Bitcoin, but the road to new all time highs won't come as easy as most investors think.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
In addition to BTC being under pressure from the NVT sell signal, price has fallen below the 50 day MA (in orange) and the 200 day MA (in purple.) Looking at the chart, you can see that for the past couple of weeks, BTC has been trying to get back above the 200 MA, but it has failed each time. This is incredible weakness that we haven't seen in the beginning or even the mid stages of any BTC bull market in history. So, provided BTC doesn't print a sudden recovery above those moving averages, I'm becoming increasingly confident that we're about to see a major fall in BTC.
This isn't the first time I've said that. I published a chart in May, showing why I felt that BTC was in a bear market rally, which literally nobody else was talking about at the time. At the time, that analysis got a lot of negative feedback, but I may be the one with the last laugh in the end. Admittedly, my timing for when I thought the retracement would be was a bit premature, but it appears to be happening nonetheless.
So, we have an NVT sell signal playing out, which historically has yielded corrections in the 70% range. That takes us right down to the regression arc, which I've been saying NEEDS TO BE TESTED, before the next bull market. We never tested it. So, I still believe that the rise to 13,800 was a bull market rally, and the evidence is mounting to suggest that BTC is poised for an epic fall.
People are way too bullish. Everyone thinks that they're going to be millionaires in a few years because they threw some money into crypto. What's really going to happen, is crypto is going to chew up and spit out the weak hands first. It's going to grind your faces into the pavement, and destroy your short term dreams, until you waive your white flags and run home to your Mommies.
Nothing is guaranteed. Bitcoin's log chart is the most beautiful chart I have ever seen, in my 11 years as an analyst, but there is no guarantee that it will last forever. The truth is, Bitcoin is an inferior technology to other solutions (like XRP) and there is very little (if any) adoption or real use of BTC. It can't scale, transaction fees explode when the blocks fill up, the lightning network is a mess, it has no real use case other than a "digital gold/store of value," and it lacks consistent innovation. It's over 60% centralized to China, it's TPS speeds are slow, someone owns 1/17 of all coins in circulation and, unlike Ripple, there is no protection in place (like cryptographic escrow) to ensure that they don't dump those 1,000,000 BTC on the market. Did I mention that it consumes more energy than small countries, even at it's currently relatively small market cap and network size, compared to other global markets? It's extraordinarily inefficient. BTC needs trusted third party solutions like the lightning network, but the "trusted third party" part is the antithesis of what BTC stands for. To paraphrase David Schwartz, second layer solutions such as the lightning network are inhibited by the deficiencies of the base technology.
Despite those negative points, BTC's log chart is still the most beautiful chart in existence. Despite those negative points, BTC could still rise to ridiculous prices. It has a very recognizable brand, it has the staying power that no other crypto has exhibited, there is also a lot of economic uncertainty in the backdrop that could be a boon for BTC and crypto. However, BTC is currently poised to test the resolve of everyone involved in this space. Everyone thinking that it will rise from the ashes, even if it falls back to the regression arc, could be unpleasantly surprised to find a breakdown below this rising blue arc, and an abysmal fall to worthlessness. Time will tell. The question is, if we fall from here, are you willing to hold to 5000, 4000, 3000 or lower? There is no guarantee that a recovery will come. I know that sounds grim, but I call it how I see it. The regression to the arc never happened, and BTC is showing that it may be setting up for that regression. If/when we get down there, will we recover? History says yes, until it doesn't. Personally, I do think there will be a future for Bitcoin, but the road to new all time highs won't come as easy as most investors think.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Comment:
Here is the analysis where I said that BTC was in a bear market rally.
