Bitcoin (BTC) Re-enters The Long Term Growth Channel
Updated
Where next? This Bitcoin rally has been completely face-melting, but prices are still only up around 2x from the previous all-time high. In 2017, Bitcoin rallied about 3x from its final correction off the previous ATH. If this happened again, we would see $48600-50000 before the first severe correction of this bull market. But this rally has occurred relatively uninterrupted, so this has me a little concerned about the foundation below. There is a lot of room to correct - and time, as well.
Now is the time to pay attention to these long term trendlines. Bitcoin has again made its way back into the channel from 2016-2017. I noted this channel in 2019, and used it to call the June peak near 14k.
But there was also this chart where I speculated on a double-bubble scenario. Bitcoin is beginning to reach target prices from this scenario, but violated the structure I drew. But looking at this now, it seems like Bitcoin could just head up to $1 Million! Really hard to say. No one has a crystal ball. I'm just trying to figure out what's going on.
There is a very real possibility that Bitcoin experiences a severe drop soon. It has room to drop back to the bottom of the long term growth channel (light blue). This would put it around 32-33k. It can also drop down to the pink trendline. There are many options! Looking at indicators, they are overheated, and a drop can occur at any moment. But markets are in a strange, surreal state. We have endless USD printing, which keeps traditional markets afloat. Then we have endless USDT printing, which keeps the cryptocurrency market afloat. In theory, a collapse of the USD or USDT should not affect the long term value of cryptocurrencies, relative to other assets. However, it's important to keep LIQUIDITY in mind. USDT drives so much of the liquidity in crypto, that I think harsh regulation of Tether could cause some severe short-term panic, sending prices much lower than people might be expecting. So best to be prepared! I'm getting ready to cash out at least my initial investment (haven't pulled the trigger yet, but it's very tempting).
Looking at the BLX chart, Bitcoin is actually ALREADY close to the long term growth curve resistance. I've seen assets break out from these before, so it could happen. But I would expect it to serve as some resistance. I'm looking at a couple of different scenarios. We can also get a 3rd scenario, which would be a combination of the two (correction back to the purple uptrend after hitting the pink curved resistance, and then continuation).
And if the top curve breaks, it can become a long term channel, with resistance in the mid-6-figures. This seems to be what most people are expecting.
TOTAL is also back in the long term growth channel, and hasn't even reached the top yet.
Meanwhile, TOTAL2 (the altcoin market cap) hasn't even broken above its shorter term growth channel (as did Bitcoin and TOTAL):
I do think it's decently possible alts will break their own ATH values soon, but they are certainly lagging. I think if we see a correction soon, the 100d MA will again be tested. If the 100d MA (green in the below chart) can't hold across the market, I think it would be a bad sign. This means Bitcoin can actually drop straight to the 18.5k level!
This also means the TOTAL market cap can drop by over 50%!
But irrationality has taken hold in the market. I was much more confident when we were in the accumulation phase of the market cycle. Now that things are rolling, it's much harder to figure out the next move. It's easy for me to be skeptical as well. As I mentioned above, I'm still waiting to take some initial profit on my long term spot positions. I will do my best to keep this chart updated!
Thanks for reading. This is not financial advice. This is meant for speculation, education, and entertainment only.
-Victor Cobra
Now is the time to pay attention to these long term trendlines. Bitcoin has again made its way back into the channel from 2016-2017. I noted this channel in 2019, and used it to call the June peak near 14k.
But there was also this chart where I speculated on a double-bubble scenario. Bitcoin is beginning to reach target prices from this scenario, but violated the structure I drew. But looking at this now, it seems like Bitcoin could just head up to $1 Million! Really hard to say. No one has a crystal ball. I'm just trying to figure out what's going on.
There is a very real possibility that Bitcoin experiences a severe drop soon. It has room to drop back to the bottom of the long term growth channel (light blue). This would put it around 32-33k. It can also drop down to the pink trendline. There are many options! Looking at indicators, they are overheated, and a drop can occur at any moment. But markets are in a strange, surreal state. We have endless USD printing, which keeps traditional markets afloat. Then we have endless USDT printing, which keeps the cryptocurrency market afloat. In theory, a collapse of the USD or USDT should not affect the long term value of cryptocurrencies, relative to other assets. However, it's important to keep LIQUIDITY in mind. USDT drives so much of the liquidity in crypto, that I think harsh regulation of Tether could cause some severe short-term panic, sending prices much lower than people might be expecting. So best to be prepared! I'm getting ready to cash out at least my initial investment (haven't pulled the trigger yet, but it's very tempting).
Looking at the BLX chart, Bitcoin is actually ALREADY close to the long term growth curve resistance. I've seen assets break out from these before, so it could happen. But I would expect it to serve as some resistance. I'm looking at a couple of different scenarios. We can also get a 3rd scenario, which would be a combination of the two (correction back to the purple uptrend after hitting the pink curved resistance, and then continuation).
And if the top curve breaks, it can become a long term channel, with resistance in the mid-6-figures. This seems to be what most people are expecting.
TOTAL is also back in the long term growth channel, and hasn't even reached the top yet.
Meanwhile, TOTAL2 (the altcoin market cap) hasn't even broken above its shorter term growth channel (as did Bitcoin and TOTAL):
I do think it's decently possible alts will break their own ATH values soon, but they are certainly lagging. I think if we see a correction soon, the 100d MA will again be tested. If the 100d MA (green in the below chart) can't hold across the market, I think it would be a bad sign. This means Bitcoin can actually drop straight to the 18.5k level!
This also means the TOTAL market cap can drop by over 50%!
But irrationality has taken hold in the market. I was much more confident when we were in the accumulation phase of the market cycle. Now that things are rolling, it's much harder to figure out the next move. It's easy for me to be skeptical as well. As I mentioned above, I'm still waiting to take some initial profit on my long term spot positions. I will do my best to keep this chart updated!
Thanks for reading. This is not financial advice. This is meant for speculation, education, and entertainment only.
-Victor Cobra
Note
Comment: I'm also watching DXY (USD currency index). If it bounces at this level, that could be bad for crypto and other asset prices in the short-medium term. But ultimately if and when this level falls, we could see more mania across markets, as institutions continue to hedge against big government spending and massive debt. I wonder how it all ends....Note
Looks like Bitcoin found resistance near the top of the channel, and has fallen back to the bottom. If this support cannot hold, I think it can test the pink trendline next - near 23k. The most bullish possibility here is if Bitcoin bounces here and continues to grind along the channel support for a bit as oscillators and funding cool off. Note
Pretty damn bullish to hold this channel. It can drop back down again to test it as support over the coming days - or not! But I do think it's important to watch it, because it confined price action during the last bull market. Note
Although I called the short-term top near 40K pretty well (sizable retrace to sub 30K prices, briefly), it appears Bitcoin has resumed its uptrend for now. It's even consolidating ABOVE the growth channel (light blue). If Bitcoin drops back into the channel, it can head as low as 35k at the moment and remain in a healthy uptrend. Below the channel support, and I think a more medium-term/longer term top could be in. Note
I think the end of this bull cycle might come when Bitcoin has ventured far from this channel and begins retracing towards it. The place (in theory) to buy back in during the next bear cycle will be after it capitulates below the growth channel again. So my goal will be to skim some more from my positions once Bitcoin becomes over-extended, away from this growth channel.Note
Maybe something like what I've drawn in pink here: 
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