The ever-enduring nature of bitcoin
In the long run, almost no one gets it right.
We have a long-term trend (up), with the expectation that price will only continue to grow as the sector does. But while 250k seems 'programmed' for bitcoin as an inevitable outcome one day, the timeline for when and how we get there is intentionally left opaque.
Are you optimistic, or pessimistic about what is happening?
The cool thing about this playing out is that the long-term bullish trend will remain intact.
For those who watch the graphs, this spiky pattern, then return to consolidation before a major breakout will be familiar to them. We call it the 'test pump' - before the major pump actually begins.
A lot of coins exhibited this behavior in 2020, including bitcoin.
First, we have a breakout.
Then there are several drives upward, creating a new range and making higher highs along the way.
Then, once it is realized that price cannot yet be sustained at that level, we get a major drop all the way back to the last bottom support created in that new range.
Price bounces again but can no longer get past the middle of the range.
Finally, price returns all the way back down to the previous range, so it can gather up more energy for the next, greater breakout even higher.
Perhaps once we fall after the third high is reached, we don't even get a bounce at all. Perhaps distribution markdown phase slices us right through support, where we fall all the way back down to the 200 weekly MA, bounce there and finally make a lower high before going down below 20k again for another 3-year period of consolidation.
A 70% drop from the high I've indicated? Just under 22k.
I wonder where that 200 MA will be in 4-5 months' time...
This market in its entirety has been clearly overextended for some time. The beginning of 2021 was euphoric as we watched everything rocketing upward. It seemed like a never-ending rally. Now we are ranging - although it's almost starting to look like the bubble is already 'popping'. I think one further drive downward may scare everyone enough to believe that a new all-time high is not happening this year, thereby providing enough short liquidity on the way back up to actually get us there. And of course, once we approach new all-time highs again... the moon boys are back with 100k, 150k, 250k bitcoin predictions... and then people can just hodl through the final bubble pop, being trained to think once again that we aren't even close to the top yet.
But the fundamentals! Well, are you ready to reconcile the current prices with what they should fundamentally be valued at, today? Does anyone know how to accurately calculate that, or do you base it more on an arbitrary number that you feel it should be worth?
Onboarding all this value into a developing technology is not a continuous and linear process. When things start to get up past 2000x their value within two years, there are strong incentives from both sides. There are players (smart money) looking to cash out and perhaps rebuy in much lower, and there are those in power looking to squash something that has begun to get out of control. It's hard to even calculate what some of this stuff would be worth once we get to 150k bitcoin and beyond.
If they are not already steering this ship into the ground, I think the most likely scenario is that they are allowing bitcoin and friends one last run in the sun, in the short term - with eth and others going ballistic one more time - but then they put the kibosh on things for a long while.
Make no mistake, this would require btc to do what it has never done before - go below the previous all-time high.
God forbid bitcoin were to act in any manner whatsoever that deviates from its previously analyzed data points!
And yes, if this happened the projects would all suffer. But many would not be wiped out completely. The good ones could build some strong ranges for a couple of years at much more reasonable levels - perhaps at about the 10% level from their new-and-improved all-time highs.
One day bitcoin will be ready to hit it's next macro fib target level, and that will signify the next 'top' on the market. But IMHO it will not happen for another 3-4 years at least, and this chart shows where we could wind up in the meantime.
Thank you.
We have a long-term trend (up), with the expectation that price will only continue to grow as the sector does. But while 250k seems 'programmed' for bitcoin as an inevitable outcome one day, the timeline for when and how we get there is intentionally left opaque.
Are you optimistic, or pessimistic about what is happening?
The cool thing about this playing out is that the long-term bullish trend will remain intact.
For those who watch the graphs, this spiky pattern, then return to consolidation before a major breakout will be familiar to them. We call it the 'test pump' - before the major pump actually begins.
A lot of coins exhibited this behavior in 2020, including bitcoin.
First, we have a breakout.
Then there are several drives upward, creating a new range and making higher highs along the way.
Then, once it is realized that price cannot yet be sustained at that level, we get a major drop all the way back to the last bottom support created in that new range.
Price bounces again but can no longer get past the middle of the range.
Finally, price returns all the way back down to the previous range, so it can gather up more energy for the next, greater breakout even higher.
Perhaps once we fall after the third high is reached, we don't even get a bounce at all. Perhaps distribution markdown phase slices us right through support, where we fall all the way back down to the 200 weekly MA, bounce there and finally make a lower high before going down below 20k again for another 3-year period of consolidation.
A 70% drop from the high I've indicated? Just under 22k.
I wonder where that 200 MA will be in 4-5 months' time...
This market in its entirety has been clearly overextended for some time. The beginning of 2021 was euphoric as we watched everything rocketing upward. It seemed like a never-ending rally. Now we are ranging - although it's almost starting to look like the bubble is already 'popping'. I think one further drive downward may scare everyone enough to believe that a new all-time high is not happening this year, thereby providing enough short liquidity on the way back up to actually get us there. And of course, once we approach new all-time highs again... the moon boys are back with 100k, 150k, 250k bitcoin predictions... and then people can just hodl through the final bubble pop, being trained to think once again that we aren't even close to the top yet.
But the fundamentals! Well, are you ready to reconcile the current prices with what they should fundamentally be valued at, today? Does anyone know how to accurately calculate that, or do you base it more on an arbitrary number that you feel it should be worth?
Onboarding all this value into a developing technology is not a continuous and linear process. When things start to get up past 2000x their value within two years, there are strong incentives from both sides. There are players (smart money) looking to cash out and perhaps rebuy in much lower, and there are those in power looking to squash something that has begun to get out of control. It's hard to even calculate what some of this stuff would be worth once we get to 150k bitcoin and beyond.
If they are not already steering this ship into the ground, I think the most likely scenario is that they are allowing bitcoin and friends one last run in the sun, in the short term - with eth and others going ballistic one more time - but then they put the kibosh on things for a long while.
Make no mistake, this would require btc to do what it has never done before - go below the previous all-time high.
God forbid bitcoin were to act in any manner whatsoever that deviates from its previously analyzed data points!
And yes, if this happened the projects would all suffer. But many would not be wiped out completely. The good ones could build some strong ranges for a couple of years at much more reasonable levels - perhaps at about the 10% level from their new-and-improved all-time highs.
One day bitcoin will be ready to hit it's next macro fib target level, and that will signify the next 'top' on the market. But IMHO it will not happen for another 3-4 years at least, and this chart shows where we could wind up in the meantime.
Thank you.
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