BTC Block Halving Bubble
Classic Bitcoin volatility has returned after breaking the $315 capped range we've been stuck in for what feels like an eternity. Recent price action has attracted media attention as well as several old players who were waiting for a range break to re-enter the market. I could list a few dozen fundamental reasons for the price increase but chances are you already know them all.
The chart above is, in my opinion, a worse-case scenario for bulls over the next 8 months. Institutional money has entered the market over the past 10 months, creating a floor at $220, and has finished accumulation in the last month with the move to $500 a test pump for what is to come.
In the short to mid term (within 6 weeks), I am looking for lower volume on the next swing up to confirm that $504 was the local high. Long term investors should be safe with a buy around $340 as shown above either before or after the swing up. If profit taking becomes strong enough, we may see a small dip under $300 to run stops, or in the extreme case a full retrace to $235-$250, though this may require a catalyst such as further negative developments in the blocksize debate.
The inflation halving has obviously already begun to be priced in. Mining firms are incentivized to manipulate the price upwards in order to maintain revenue, and there will naturally be a speculative bubble as people buy in to dump on latecomers as we saw with Litecoin's halving earlier this year. The price will fall apart around a month before the inflation actually halves as hype reaches its peak and the market cycle completes. In my opinion this cycle will take us at least into the $600 range, but it is possible the price could be manipulated to new all time highs if institutionals have built a large enough position. Price action after halving will probably be a slow uptrend as bitcoin develops and is adopted at a realistic pace. I haven't used any indicators in this as I believe they're useless when it comes to longer term Bitcoin bull markets, except some moving averages, but they have already all crossed bullish so are irrelevant. Market structure is all that is necessary to look at.
The chart above is, in my opinion, a worse-case scenario for bulls over the next 8 months. Institutional money has entered the market over the past 10 months, creating a floor at $220, and has finished accumulation in the last month with the move to $500 a test pump for what is to come.
In the short to mid term (within 6 weeks), I am looking for lower volume on the next swing up to confirm that $504 was the local high. Long term investors should be safe with a buy around $340 as shown above either before or after the swing up. If profit taking becomes strong enough, we may see a small dip under $300 to run stops, or in the extreme case a full retrace to $235-$250, though this may require a catalyst such as further negative developments in the blocksize debate.
The inflation halving has obviously already begun to be priced in. Mining firms are incentivized to manipulate the price upwards in order to maintain revenue, and there will naturally be a speculative bubble as people buy in to dump on latecomers as we saw with Litecoin's halving earlier this year. The price will fall apart around a month before the inflation actually halves as hype reaches its peak and the market cycle completes. In my opinion this cycle will take us at least into the $600 range, but it is possible the price could be manipulated to new all time highs if institutionals have built a large enough position. Price action after halving will probably be a slow uptrend as bitcoin develops and is adopted at a realistic pace. I haven't used any indicators in this as I believe they're useless when it comes to longer term Bitcoin bull markets, except some moving averages, but they have already all crossed bullish so are irrelevant. Market structure is all that is necessary to look at.
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