Ideas and thought process before the next BTC halving
With November Monthly close, i'm updating my view for BTC before the halving. I want to share with you my thought process and ideas in which you may found value to make your own vision.
The main goal is to give me a global view and idea to neutralize my bias by looking at possible outcomes and take it however the market bring it, and then make a decision by removing the most quantity of assumptions that i could.
Bias:
Best cases
Enter a Multi year Bear market while the crypto space mature and ends near the halving, bouncing until 1000 levels are reached
Mid Mean Channel holds and reach 50% current margin to safety and holders retain the OBV above 2015 level for a smooth bottom following
the low band of the mid mean channel with enough room on the price to hold a global liquidity reduction with out breaking the low mid channel band.
Otherwise the channel breaks aggressively with a global liquidity reduction ending in a short period bottom between the 1000 and 600 mark
or 50% of price at the moment, even reaching the red target box level in one single move with an aggressive pull back
Worst Cases
High correlation to the DXY and inverse to precious metals and commodities, as it could lead to a discreet trap
of exchanging for a devaluated or useless currency, crypto or fiat
Any combination that could trigger a 3M or bigger time frame in a Side range channel that could render the halving neutral or
price discovery targeting white box as it all time avg price.
Definitions:
Have to wait and see how 2018 ends to take a better approach.
Gray lines and channels for Mean representations of the price.
Purple lines indicates the average relative mining cost,
According to my personal study i place the current Mean Mining cost at 4444.00 USD per BTC
The period covered in my research begin with the cost at April 2016
I extended the ascending Avg.Cost. as linear projection.
Be careful when reading this information as it have a BIG assumption that in time it wil increase in linear way,
as in any productivity matter hardware,software,energy,etc. this is Not True.
However for Watchlist: Dates, targets and milestone setups this linear progression is considered as a constant until July 2019.
The scope is limited to be before the reward halving in 2020, so the max projection have been made until Febrary 2020
Empiric Hypothesis from research pending to be evaluated to real behavior of mining:
relation ~50% avg cost movement to price action breaks
current 50% margin to safety cost its equal to the avg cost before mean channel breakout
which also is the ~50% from the previous price action break
Watch List:
Behavior of BTC in its first global liquidity deflation
Monthly RSI consolidation or breakout
50% margin to safety (teal square)
ATH ATL band reached
Low Mid Mean Channel test at 2800 to 2049 as MA's converge
3 Months RSI test lower band
6 Months RSI breakout for another over extension
2013 ATH retest ( + USD CPI inflation) ~ 1200
Febrary 2019 reaction to ETF resolution and Futures with delivery First Month
case on cost projection cross
on On low Mean Channel band cross Month Mean cross SMMA 50
3M OBV consolidation or breakdown
Observations:
Monthly RSI equals the lowest level since 2015 bear market, However this time OBV did not suffer equivalent impact
100% correction from 2017 Mean Channel Breakout of Q4 2017
6000's Price drop halt at avg. cost projection
6M Henki notice at top Mean Channel
Weekly 200 MA in proximity
1M Possible MA Cross
Monthly MA 7, at 6k level resistance
volatility is back
Possible Combinations:
Setups
3 Major Initial Setups
Year ends at the current RSI level waiting for history to rhyme and 1M MA cross followed with consolidation for a curved bottom
100% market correction to the 2017 breakout level holding and following the mid mean low band channel
Global liquidity reduction bring market back to retest lower levels as and aggressive bottom
Targets
5 possible levels aligned to the halving time
The other one is above the mid band, that could became another bubble if reaching ATH or breaking the mid High band before BTC increase utility and adoption
Be aware that Institutional money could trigger a run to the 20k level,nonetheless that could trigger a major selloff of the people who bought at ATH levels
unless a macro situation trigger it, i.e: the brexit, global fiat currencies crisis, liquidity bounce (should follow precious metals and commodities), etc.
Probabilities:
I am taking the November close as a neutral calculation point, in the near future going to calculate the variables for my model.
additional variables and probabilities in Trading system, and FA, and following the progress in different time frames to discard possibilities.
The main goal is to give me a global view and idea to neutralize my bias by looking at possible outcomes and take it however the market bring it, and then make a decision by removing the most quantity of assumptions that i could.
Bias:
Best cases
Enter a Multi year Bear market while the crypto space mature and ends near the halving, bouncing until 1000 levels are reached
Mid Mean Channel holds and reach 50% current margin to safety and holders retain the OBV above 2015 level for a smooth bottom following
the low band of the mid mean channel with enough room on the price to hold a global liquidity reduction with out breaking the low mid channel band.
Otherwise the channel breaks aggressively with a global liquidity reduction ending in a short period bottom between the 1000 and 600 mark
or 50% of price at the moment, even reaching the red target box level in one single move with an aggressive pull back
Worst Cases
High correlation to the DXY and inverse to precious metals and commodities, as it could lead to a discreet trap
of exchanging for a devaluated or useless currency, crypto or fiat
Any combination that could trigger a 3M or bigger time frame in a Side range channel that could render the halving neutral or
price discovery targeting white box as it all time avg price.
Definitions:
Have to wait and see how 2018 ends to take a better approach.
Gray lines and channels for Mean representations of the price.
Purple lines indicates the average relative mining cost,
According to my personal study i place the current Mean Mining cost at 4444.00 USD per BTC
The period covered in my research begin with the cost at April 2016
I extended the ascending Avg.Cost. as linear projection.
Be careful when reading this information as it have a BIG assumption that in time it wil increase in linear way,
as in any productivity matter hardware,software,energy,etc. this is Not True.
However for Watchlist: Dates, targets and milestone setups this linear progression is considered as a constant until July 2019.
The scope is limited to be before the reward halving in 2020, so the max projection have been made until Febrary 2020
Empiric Hypothesis from research pending to be evaluated to real behavior of mining:
relation ~50% avg cost movement to price action breaks
current 50% margin to safety cost its equal to the avg cost before mean channel breakout
which also is the ~50% from the previous price action break
Watch List:
Behavior of BTC in its first global liquidity deflation
Monthly RSI consolidation or breakout
50% margin to safety (teal square)
ATH ATL band reached
Low Mid Mean Channel test at 2800 to 2049 as MA's converge
3 Months RSI test lower band
6 Months RSI breakout for another over extension
2013 ATH retest ( + USD CPI inflation) ~ 1200
Febrary 2019 reaction to ETF resolution and Futures with delivery First Month
case on cost projection cross
on On low Mean Channel band cross Month Mean cross SMMA 50
3M OBV consolidation or breakdown
Observations:
Monthly RSI equals the lowest level since 2015 bear market, However this time OBV did not suffer equivalent impact
100% correction from 2017 Mean Channel Breakout of Q4 2017
6000's Price drop halt at avg. cost projection
6M Henki notice at top Mean Channel
Weekly 200 MA in proximity
1M Possible MA Cross
Monthly MA 7, at 6k level resistance
volatility is back
Possible Combinations:
Setups
3 Major Initial Setups
Year ends at the current RSI level waiting for history to rhyme and 1M MA cross followed with consolidation for a curved bottom
100% market correction to the 2017 breakout level holding and following the mid mean low band channel
Global liquidity reduction bring market back to retest lower levels as and aggressive bottom
Targets
5 possible levels aligned to the halving time
The other one is above the mid band, that could became another bubble if reaching ATH or breaking the mid High band before BTC increase utility and adoption
Be aware that Institutional money could trigger a run to the 20k level,nonetheless that could trigger a major selloff of the people who bought at ATH levels
unless a macro situation trigger it, i.e: the brexit, global fiat currencies crisis, liquidity bounce (should follow precious metals and commodities), etc.
Probabilities:
I am taking the November close as a neutral calculation point, in the near future going to calculate the variables for my model.
additional variables and probabilities in Trading system, and FA, and following the progress in different time frames to discard possibilities.
Disclaimer
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