BitcoinShort
BTC | Following Famous Macroeconomic Pattern Down
Updated
Hello Dear TV Crypto Savvy,
Justin Mamis made famous his sentiment cycle chart in the 1999 publication, The Nature of Risk. It is a macroeconomic pattern which has been played out, in broad strokes, very
frequently in the history of open markets. Today it looks like Bitcoin is fitting this pattern almost eerily, as I am showing it overlaid to the last several months of the BTC chart.
Mamis' sentiment cycle goes through named stages. Bitcoin now looks to be completing the "Anxiety" stage after climbing the "Wall of Worry" through March. We will soon be entering the "Aversion" stage, where there can be a surprisingly strong and swift selloff.
Since I don't want this just to be a, "look, it fits," I am also making this chart unusually technically heavy. We can see the MACD and RSI are primed to swing down, and volume is shockingly little. The momentum pendulum is also primed to drop. Moreover, the 200-period FBB midline (magenta line) was recently strongly rejected as a resistance. The macro volume profile shows the point of control and strong support only at $39,000... almost perfectly fitting the bottom that would be predicted by Mamis' cycle.
We see further potential for downside and the volume profile supports a likely bottom between
39K and 35K. It is worth cautioning that a wick down all the way to $28,500 would still preserve the long term bullish trend which started in October 2020, and we may see this level tested if the macroeconomic climate degrades more quickly than expected.
This view is in line with our long term strategic vision as well, as you can see in the linked related idea.
Where and when do you expect Bitcoin to find a bottom? Please share your thoughts in the comments below.
If you appreciate my analysis and would like to see more in the future, please like and follow!
With that said, this is not investment advice. I am offering my ideas for educational purposes only. Thank you for time and attention, enjoy and take care.
Justin Mamis made famous his sentiment cycle chart in the 1999 publication, The Nature of Risk. It is a macroeconomic pattern which has been played out, in broad strokes, very
frequently in the history of open markets. Today it looks like Bitcoin is fitting this pattern almost eerily, as I am showing it overlaid to the last several months of the BTC chart.
Mamis' sentiment cycle goes through named stages. Bitcoin now looks to be completing the "Anxiety" stage after climbing the "Wall of Worry" through March. We will soon be entering the "Aversion" stage, where there can be a surprisingly strong and swift selloff.
Since I don't want this just to be a, "look, it fits," I am also making this chart unusually technically heavy. We can see the MACD and RSI are primed to swing down, and volume is shockingly little. The momentum pendulum is also primed to drop. Moreover, the 200-period FBB midline (magenta line) was recently strongly rejected as a resistance. The macro volume profile shows the point of control and strong support only at $39,000... almost perfectly fitting the bottom that would be predicted by Mamis' cycle.
We see further potential for downside and the volume profile supports a likely bottom between
39K and 35K. It is worth cautioning that a wick down all the way to $28,500 would still preserve the long term bullish trend which started in October 2020, and we may see this level tested if the macroeconomic climate degrades more quickly than expected.This view is in line with our long term strategic vision as well, as you can see in the linked related idea.
Where and when do you expect Bitcoin to find a bottom? Please share your thoughts in the comments below.
If you appreciate my analysis and would like to see more in the future, please like and follow!
With that said, this is not investment advice. I am offering my ideas for educational purposes only. Thank you for time and attention, enjoy and take care.
Note
We saw a touch of the 39K zone and support on cue in the last week. The next month is still likely to be setup as "Aversion," so expect more potential for downside. We still see 35K as a likely next target.Note
The 35K target was hit today. Probability of a rebound is increasing, but we see a next target of 32K as likely.Note
The past trading day brought a worse than expected CPI result in the US leading the market into a continued selling frenzy. The support at $29900 was broken and acted as resistance long enough to put pressure on for a successful attack below the support at $28800.We now see continued potential for a further slide along the descending channel BTC has been in for the last week. A next target would be around $27000. Entries at the current level may be tempting, but relatively tight stop losses would be encouraged.
Note
The downward momentum from the US trading day carried into Asia trading hours, with a successful breakout below the descending channel mounting around 7AM UTC today.Most exchanges bottomed out very briefly near $25400, but Binance spot notably went as low as $23900.
Relief from this selling climax sparked an impulsive rally towards 28.8K.
Truly remarkable times for crypto. Today's US market open has so far been positive, but uncertainty is still king. With volatility so high, extreme caution is needed with any considered entries. BTC lacks any meaningful support structures below 26K until 23K.
Note
As hinted in our update last month, 
23K and lower is indeed on the table. It has taken continued runaway inflation and general fear about crypto protocols to seal the deal.At the time of this update, BTC is trading at 20.4K. There is a support structure around 19K which looks like a likely stopping point for BTC now. BTC continues to be closely correlated to NASDAQ, so a further significant decline in stocks could possibly bring BTC lower still. We see a turnaround near this level as much more likely than we did at last month's levels though.
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