Bitcoin Fib CirclesInteresting confluence with this Fib circle , layed out levels using it , also extended the 200 weekly moving average, time to buy.
Bitcoinsignals
BITCOIN Closed 7 straight red weeks for the 1st time in history!Bitcoin (BTCUSD) closed this weekend its 7th straight red weekly (1W) candle, which is a feat seen for the first time in history. More specifically, the last time we had 6 straight losing weeks on Bitstamp was from August to September 2014:
** Healthy stock market needed **
Needless to say, this development is very negative for BTC, especially from a psychological standpoint as the market being full of weak hands and late buyers during corrections, it tends to be dominated by fear, uncertainty and doubt. That accelerates more selling until the market stabilizes and high capital investors (whales, big institutions etc), enter the market again methodically.
Much will of course depend on the outlook of the stock market. Once the correction that began at the start of this year ends and the disappointing macro-economic environment stabilizes, institutional investors can again enter the riskier crypto-market. Until then we can expect more of that volatility at best.
** First week below 31600 since Dec 2020 **
However there is a certain basis we can work on and a few patterns to relate to. First, last 1W candle wasn't just the 7th straight red but was also the first weekly closing below 31600 since the December 21 2020 1W candle, thus reaching levels of almost 1.5 year back. The 1W MA200 is now at 21960 and as I've mentioned in previous posts, it is the weekly Support of the typical Bear Cycle.
** The importance of the 0.5 Fibonacci level and the 1W MA200**
Also last week's candle, left a big wick below as it rebounded strongly from roughly 25400. Such candles were last seen on November 29 2021 and May 17 2021. Both of those started a consolidation of at least 1 month. The difference was that the November one failed to break its 0.5 Fibonacci retracement level, thus kickstarting further decline, while the May one eventually broke above the 0.5 Fib, shifting the trend to bullish. The 0.5 Fib is currently a little over 35000. A weekly close above it, could be enough to restore the long-term bullish bias, even though technically there is still the massive Resistance of the 1W MA50 (blue trend-line) to consider which rejected last time the uptrend (March 2022). A weekly closing below last week's low, should deliver the, much anticipated by the majority of market participants, capitulation blow on (and even slightly below) the 1W MA200, where Bear Cycles bottom out and typically consolidate for 4-6 months before initiating the new Bull Cycle.
So what do you think will be the case this time? Will the market deliver the 1W MA200 to us? Or if the 0.5 Fib breaks, a new Bull Phase will start regardless? Feel free to share your work and let me know in the comments section below!
P.S. The last time the 1W RSI has been that low was on the March 09 2020 1W candle, which was the bottom of the COVID crash.
--------------------------------------------------------------------------------------------------------
Please like, subscribe and share your ideas and charts with the community!
--------------------------------------------------------------------------------------------------------
BITCOIN The MFI and 2W MA100 Golden Bottom IndicatorsMy latest Cycle analysis on Bitcoin (BTCUSD) is again geared towards estimating the bottom of the current (smoothest of all time as I've called) Bear Cycle that we are in. This time I am shifting to the 2W time-frame as a unique indicator combo is displayed.
** The 2W MA50 and MA100 **
The red area indicates the time from the start of the Bear Cycle to when a 2W candle closes below the 2W MA50 (blue trend-line) for the first time. As the chart shows, this has so far been fairly consistent throughout the Bear Cycles as in 2014 that lasted 378 days (27 2W candles), in 2018 it lasted 336 days (24 2W candles), while on the current Bear Cycle it took again 378 days (27 2w candles) as in 2014.
Then I measure the time it took from the 2W MA50 closing to the time the price hit the 2W MA100 (green trend-line). In 2014 that was 28 days (2 2W candles), while in 2018 it was 77 days (6 2W candles). That sums the time from the start of the Bear Cycle to the 2W MA100 touch at 406 days and 413 days respectively.
** The MFI indicator **
Perhaps the most important addition to the mix is the Money Flow Indicator (MFI), which gives a buy signal when it hits the 25.50 level. It has done so on the January 05 2015 and the January 21 2019 candles. Both of those hits, marked a Bear Cycle bottom as the price was at the same time on the 2W MA100. The June 18 2018 MFI 25.50 approach doesn't fall into that category as, not only the indicator wasn't on the 25.50 level but the price hasn't closed below the 2W MA50.
** Conclusion **
This simple analysis shows that the market bottoms when the 2W MFI hits the 25.50 level while the price trades on the 2W MA100. The MFI is currently around 33.40, while the 2W MA100 at 21825. Note that the only time Bitcoin closed below the 2W MA100 was in March 2020 during the COVID global crash and still that was just marginally. As far as timing is concerned, if the current Bear Cycle follows the pattern of 2014, then it should bottom by the May 23 2022 2W candle and if it follows the pattern of 2018 it should bottom by the June 20 2022 2W candle.
But what do you think? Do you estimate that a bottom is not far away and if so, will it be on the 2W MA100 or lower? Feel free to share your work and let me know in the comments section below!
--------------------------------------------------------------------------------------------------------
Please like, subscribe and share your ideas and charts with the community!
--------------------------------------------------------------------------------------------------------
BITCOIN Comparing Capitulation phases among Bear Cycles.As the current 1W candle on Bitcoin (BTCUSD) is rising, leaving a big wick below, prompting to capitulation events, it is a good idea to compare the current 2021/22 Bear Cycle to the past ones (2018 and 2014) in an attempt to determine how low the price can go and where a bottom may be formed.
** The importance of the 1W MA200 **
As seen on the charts on the left, every Bear Cycle hit the 1W MA200 (orange trend-line) as it formed its bottom. It is important to mention that it is the closing of the 1W candle that matters are in both cases, but more so during the 2014 Bear Cycle, the 1W candle broke below the 1W MA200 but managed to close back above it, leaving a big wick behind it, much like this week's candle. The 1W MA200 is currently at $21850 and rising rapidly with each week.
** The Accumulation phase Fibonacci extension bottom **
Both of the Cycles mentioned above, entered a 4 - 7 month sideways phase following the hit on the 1W MA200. This was in my estimate the Accumulation Phase that helped the market in transitioning from the Bear to the new Bull Cycle. Once the 1W MA50 (blue trend-line) broke, Bitcoin confirmed the new Bull Cycle.
** The 1W MA50 **
Speaking of the 1W MA50, its role is also key throughout the Bear Cycles. As shown all all charts, when the Bear Cycle starts, the initial drop always makes a direct hit on the 1W MA50 and then the price rebounds for some months. The exception is of course the current Cycle which made a Higher High in November 2021 but still we have to consider this a technical anomaly and take April 2021 as the Cycle's Top. Remember that I always treated the current Bear Cycle as a special case, calling it the 'smoothest of all time'.
As the Bear Cycle progresses, the 1W MA50 turns into a Resistance for the latter part of the Cycle, in fact in 2018 and 2022 it provided strong rejections.
** The Fibonacci extension bottom **
Circling back to the initial drop to the 1W MA50, if we measure the Fibonacci extensions on the past Cycles from that point to the Top, we derive very useful conclusions. For the 2014 Bear Cycle, the Bottom was made on the 1.618 Fibonacci extension (all 1W candles closed above it), even though as mentioned at the start of the analysis, the 1W candle made a capitulation candle with a wick that reached as low as the 1.786 Fib extension.
The 2018 Cycle made a Bottom on the 1.5 Fibonacci extension. If this is a progression, then each bottom is made one Fibonacci level before. This means that the current Cycle may bottom out on the 1.382 Fib ext, which being roughly at $21950, is around the current level of the 1W MA200. This not only matches perfectly the 1W MA200 criteria that we discussed before, but also is in line with the diminishing returns/ lower volatility theory which suggests that as massive adoption takes place and institutional capital is invested, each Bitcoin Cycle will be less volatile, offering diminishing returns, but at the same time not the brutal corrections of the past.
As you see the past two Cycles made a roughly -85% correction. If the current one bottoms on the 1.382 Fib, then it would be a -66% correction. Still big but considerably less than the Bear Cycles of 2018 and 2014.
Also notice how the current 1W candle almost reached the 1.236 Fibonacci, always a strong Support during asset corrections.
** The 1W RSI break signal of 30.000 **
Last but not least, keep an eye on the 1W RSI. The 2018 and 2014 Cycles, made a bottom when the 1W RSI broke below the 30.000 barrier, turning oversold. That took place exactly on the market bottom and then the Accumulation Channel started. Right now the 1W RSI is a little below 35.000. Even a flat multi-month consolidation can be enough to get it marginally below 30.000, not to mention another brutal 1W candle to the 1W MA200. In any case, even if the 1W MA200 doesn't get hit this time, keep an eye on the RSI 30.000 barrier as an additional market bottom indicator.
Also notice how the 1W RSI is descending in each Cycle, and even in the case of the current one (2021/22), it didn't make a Higher High despite the fact that the market did in November 2021. The Bear Cycle RSI pattern remained intact.
** Conclusion **
So what do we learn from the above? Well the current 1W candle may very well be a capitulation candle similar to that of November 19 2018, which pushed the price to the 1W MA200 three weeks later. A hit on the 1W MA200 (and candle close above) and the 1.382 Fib would be a strong indication of a market bottom but the 1W RSI breaking below 30.000, might be an even more powerful. In any case, as the current 1W candle almost hit the 1.236 Fib and the 1W MA200 is rising rapidly, the 24600 - 21850 is a massive candidate for the Bottom of this Bear Cycle. If the stock market stabilizes soon, we should start witnessing buying from long-term investors and institutions within a month's time.
But what do you think? Where do you expect this Cycle to make a bottom? Is the 1W MA200 a could projection or look more for the 1W RSI breaking 30.000? Feel free to share your work and let me know in the comments section below!
BONUS The sharp 2011 Cycle and how it corrected for reference reasons:
--------------------------------------------------------------------------------------------------------
Please like, subscribe and share your ideas and charts with the community!
--------------------------------------------------------------------------------------------------------
BTC: Temporary correction?!Bitcoin
Intraday - We look to Buy at 26200 (stop at 24328)
With signals for sentiment at oversold extremes, the dip could not be extended. We look to buy dips. 4 50week EMA is at 26000. Bespoke support is located at 26000. Trades within a broadening formation.
Our profit targets will be 31250 and 32000
Resistance: 29000 / 30000 / 31000
Support: 28000 / 27000 / 26000
Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Signal Centre’) . Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Signal Centre.
BTC Daily Chart Prediction & Target AreasBTC Bitcoin has now fallen below the yellow support trend line and is testing the previous lows from mid 2021. I'm expecting a bounce in this area, potentially back up to the red zone around $35,000 which would be an excellent opportunity for shorts, especially if it meets the VWMA 100 on the daily chart in that zone.
I think it's likely it falls after touching the red zone, VWMA 100 or blue downtrend line. My guess is that it chops around in the triangle area for a while and tries to get supportive on the yellow lines. That area lines up well with the previous top of $20,000 and also the bottom of what I call the bounce zone which is the purple cloud shown on the chart. That bounce zone is made up of the EMA 1000 and EMA 2000 and the EMA 2000 was the absolute bottom for Bitcoin after the 20k to 3.5k drop in 2018/2019.
I'll be looking for wicks down below the yellow lines and for price to stay supportive in that area and make higher lows once it gets there. It will definitely meet resistance at the blue line when it gets there, but once we clear that blue line it should start to slowly move upwards again. Watch out for low volume pops while we are in this lower triangle as those will likely be bull traps.
I'm a big fan of using the VWMA 100 and 500 for trend detection so I'll be looking for the VWMA 100 to be above the VWMA 500 as well as price staying supportive above both VWMAs before being bullish again. It is also very likely that price comes back down and retests the VWMA 500 after we break the downtrend. If it does happen, price will need to stay supportive on the VWMA 500 and then reclaim the VWMA 100 before really starting the beginning of the next bull run.
It is important to note that regaining enough momentum to start another bull run takes time and price will likely consolidate for an extended period of time, so keep that in mind when entering margin longs as margin fees will eat away at your profits while you wait. Wait for major volume to come in to avoid these situations.
If we go into a major recession, then I don't think the 20k level will hold. But if we only experience a mild recession and most markets start to recover semi-quickly, I think it is very possible that the scenario outlined above will happen(or very close to it).
BITCOIN The Cycles Halving Model times the bottom this SeptemberThis analysis is an update to a model that I've been working on for years and as it shows great accuracy at timing tops and bottoms, I frequently update here on TradingView (something I started on reddit though). Last time I published an analysis on this model was almost 1 year ago (June 11 2021):
As you see, Cycle 3 (orange trend-line) did diverge again from Cycle 2 (green trend-line) and priced its top considerably lower, which is in line with the Theory of Diminishing returns. However an update had to be made on this in order to more accurately display and project the (future) tops. Notice that this is a Halving centered approach. Every Cycle is measured before and after its respective Halving. E.g. Cycle 1 (blue trend-line) starts from the start of the data set and ends on Halving 2, i.e. displaying the price action centered around Halving 1. for comparison purposes, I've centered all on Halving 3 (the most recent one). You can find a more detailed explanation on the methodology on the previous issue of this model (chart above).
** Projecting Cycle Tops and Bottoms **
As you see a more accurate estimate of Cycle Tops is measuring the Fibonacci time extensions progressively starting from the January 2009 Genesis Block (0.0 Fib) and Halving 1 (1.0 Fib). The first one is the 1.3 Fib ext, which is around the Top of Cycle 1. Then Cycle 2 peaked around the 2.3 Fib ext and remarkably, Cycle 3 (the current one), made a top around the 3.3 Fib time ext.
Similarly, on this update I have added bottom projections to the mix. They follow a similar progression from the Genesis Block and Halving 1. The Bottom of Cycle 1 was around the 1.6 Fib ext after Halving 1 and the Bottom of Cycle 1 was around the 2.6 Fib ext after Halving 1. Technically, if the bottom Fib projections work as well as the top ones, the Bottom of Cycle 3 should be around the 3.6 Fib ext, which is around the end of September 2022.
** Portraying the Bear Cycles and Rally Phases **
A combination of the above, portrays a rough estimate of how the current Bear Cycle will unfold and that is from the 3.3 Fib to the 3.6 Fib (red area). This is respective to all previous Bear Cycles as well. As for the Rally Phases (green area), those start after each Halving and end on the +.3 Fib extension. The Rally Phase of Cycle 3 for example started on Halving 3. The next Halving is on March 2024, so there is still plenty of time before this aggressive, parabolic part of the Bull Cycle starts.
On the other hand, buying at the bottom (as mentioned the next one is projected according to this model to be around September 2022), always gives the lowest risk and highest return. Based on this model there isn't but another 4 months left for this opportunity, but as this Cycle turned out to be the smoothest in history (as I've mentioned in numerous analyses already), it is possible to see something of a sideways price action for the remainder of the Bear Cycle instead of a 'traditional' capitulation candle.
** Conclusion **
One thing is for sure with this model, that the current Cycle as it diverged a year ago from the previous one, it will converge again after the Bear phase ends. This will still be diminishing returns compared to the previous ones, but will translate to a new All Time High.
Do you agree with this model and the projections made? Do you have your own estimate for the Cycle bottom? Feel free to share your work and let me know in the comments section below!
BONUS MATERIAL Two examples of previous applications of the Halving centered approach and the Convergence - Divergence modelling:
--------------------------------------------------------------------------------------------------------
** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. **
--------------------------------------------------------------------------------------------------------
BTCUSD Technical AnalysisPlease see the chart for analysis.
-price reacting off of support/demand.
-Price has never broken a monthly demand.
-Waiting for lower timeframe confirmation (breaking ML / removing opposing pivot point).
-I could see price-breaking support/demand as it would spike a lot of headlines about bitcoin being a bad investment.
BTC New Entries + Exits (Best Reverse Strat Ever)The 1on1 video is currently out, if you would like it in order to understand how to play my analysis FULLY, please let me know privately.
All likes/comments and feedback are very much appreciated!
How to play my chart:
Buy at support, sell at resistance. When you open this chart you'll see a green entry and a red entry. When the candlestick hits the green entry, you place a buy. If however that support buy doesn't go into profit and goes negative -35 or -60 pips (depending if it was a fast break/or if the break landed on a minute 15 zone), if it breaks you would then exit your buy and immediately enter the sell. You would then ride that sell down to green TP1, or you could then repeat and play the buy/break there.
The same exact thing goes for resistance sell/break plays!
💥Bitcoin 2022 Roadmap to $19k & $16k#Bitcoin Update🔥
Technically, we are repeating the same movement as in 2017.
Bitcoin dropped by -84% from all time high from $19,799 to $3,159.
As displayed on the chart, the major zone that served as a strong support was violated and Bitcoin dropped by -47% from $6,000 support to $3,159 in 2017.
This same setup is repeating itself. The current bear cycle started in November 2021 . So far, Bitcoin has dropped by -58% from all time high from $68,996 to $29,000.
Price has been respecting the major support within $29,000 & $30,000 so far. Just as 2017, support got violated at the tail end, therefore I expect a similar reaction and a drop by -47% or less from major support at $29,000 to $16,000 or $19,000.
Not a financial advice🙅🏼♂️
Share your opinion in the comment section✍️
Please support this idea with a LIKE👍 if you find it useful🥳
Happy Trading💰🥳🤗
MKRUSD The striking similarities with Bitcoin's 2018 Cycle.This is a remarkable resemblance between Maker's (MKRUSD) price action since the May 2021 High with Bitcoin's (BTCUSD) Bear Cycle of 2018. I've mentioned numerous times that the crypto market's price action in the past +12 months can be viewed as a smooth (for crypto standards) Bear Cycle as a whole.
As for Maker's 2021/22 price action we see that it shares striking characteristics with Bitcoin's 2018 Cycle:
* The rebound after the initial crash that followed the Market Top, reached as high as the 0.618 Fibonacci retracement level.
* After that, both Cycles started a gradual decline under a Lower Highs trend-line.
* That eventually led to a capitulation sell-off , where Maker is at today and where Bitcoin formed its December 2018 bottom and then started to slowly recover into the new Bull Cycle.
* That capitulation sell-off is similar in both cases (-58% for Maker and -52% for Bitcoin).
* Bitcoin made the Cycle bottom on the -0.5 Fibonacci extension (measured from the initial crash's low). Maker's -0.5 Fib ext is around 935.00, not far from today's 1030 low.
* Bitcoin's 2018 Bear Cycle from top to bottom lasted for exactly 1 year. Maker completes 372 days today from its May 2021 High.
What do you make of all those striking similarities? Has Maker bottomed or is it about to and gradually start a new Bull Cycle? Why do you think it has copied so closely Bitcoin's 2018 Cycle after all? Let me know in the comments section below.
--------------------------------------------------------------------------------------------------------
** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. **
--------------------------------------------------------------------------------------------------------
Will Bitcoin Get to $1 Million?Highlights
There is a -0.70 Pearson Correlation Coefficient between the supply of bitcoin and its price. This negative correlation is more logarithmic than linear. As the supply gets closer to zero the price will rise quicker in raw numbers. This logarithmic relationship extended forwards in time to zero supply gives a Bitcoin price of around $460,000
There is a 0.85 Pearson Correlation Coefficient between the transaction volume of Bitcoin in USD and its price. Showing a strong positive relationship
Transaction Volume in Bitcoin in USD has been largely rising with the price, but the number of transactions has been relatively low in comparison, staying between a range of 200k and 400k in the last 5 years. Suggesting that big players are transacting in larger numbers but the quantity of transactions isn’t rising to the same degree.
Most Americans have heard of Bitcoin, so how much more awareness is there left to drive up demand?
A study found that the main determinant for cryptocurrency prices is the relative cost of production. If the mining cost for Bitcoin rises too high then the upper price estimations will become limited
There is a fundamental problem with the argument that Bitcoin will reach $1 million.
Introduction
There have been many investors, large and small, who have claimed that Bitcoin could hit $1 million per bitcoin Jones, C. (2021). The timelines vary. Some don’t have one and others say in the next couple of years (Cuthbertson, 2022), Kharpal, A. (2021).
In this report, I will be discussing their claims and any merit they may hold. I will attempt to dispute these claims from a fundamental point of view.
Just to point out before I begin, I accidentally deleted all the data that I used for the calculations after I had done the analysis. If you want the analysis and the data - just reply to this post.
Background
The reason some estimate Bitcoin reaching such a high price is the supply is limited. The problem with this argument is, that the supply of everything is limited. Yes, even the US Dollar. The magic money machine is limited. So, for this argument to work the limitations of the supply have to be meaningful. Supply and demand go hand in hand. But I would say, in my opinion, demand is more important than supply. If I create a painting, I then duplicate the painting into ten copies. The supply is ten. But to be frank, who would want to buy a painting that I have drawn? Nobody. So even though the supply is limited the demand is non-existent, so it doesn’t matter. The price of those painting would be determined by the market price. That is the last sold price on the free market. But I haven’t sold any since the demand is zero, so the price is also zero.
Let’s look at it the other way round.
If I don’t create any painting, but the demand for my paintings is extremely high, then the moment I create any painting the price will be very high as well. As I increase the supply, the price should eventually go down. The market's interest is first, in my opinion, that drives prices, second is the supply. Of course, to have a healthy market you need both to be sufficient. Supply on its own means nothing. It just means something exists nothing else. Demand on its means there is interest. So, the potential is there. The moment supply matches the demand that interest turns into something and that something is valuable.
So, the problem I have with this argument is, that the supply of Bitcoin on its own means nothing. Only when combined with demand does the argument have any potential merit. Assuming ceteris paribus, the only three ways the price of Bitcoin could go any higher is if the demand increases with the supply remaining constant. Or the supply falls with the demand remaining constant. Or the demand increases with the supply falling. The supply of Bitcoins is falling right now, it has since the beginning. So, the next thing to establish in this logic is, is the demand increasing, stagnating, or falling? This answer will tell us if the price carries on going up, Ceteris paribus and if that price will reach $1 million.
Before I get to that, just out of interest I thought. Is there a correlation between the supply of Bitcoin and its price? Assuming demand remains stable, let's see if the supply will change the price.
Supply Analysis
I got the monthly close data for the Bitcoin price and the number of Bitcoins in circulation.
The first assumption I had was the total supply of Bitcoin taken away from the total number of bitcoins in circulation is the left-over supply. That is a big assumption, since some long-term investors may not have their Bitcoins in circulation. Also, another problem is that quite a few Bitcoins in circulation may not even be accessible and may have been lost. So, the real leftover supply of Bitcoins would probably be lower than what I had calculated. Regardless this is just a simple analysis to find a correlation so these assumptions in my opinion are not that important. I doubt I would from, let’s say, a strong correlation to a weak one once the assumptions are violated.
The data set was from 2014 to 2022 (finance.yahoo.com. (n.d.). There were in total 91 data values. During a Pearson Correlation, the value was -0.70. This suggests there is somewhat of a strong negative correlation between the leftover supply of Bitcoins and the price. However, there are a few problems. The first and most obvious one is, that this method of analysis assumes there are no other variables involved that, in this case, affect the price. Another problem is correlation doesn’t mean causation. So even though there may be a correlation between the supply and price that doesn’t mean one is affecting the other. This is more pronounced once you realise that the 2017 large price increase in Bitcoin may have been done by market manipulation (Rooney, 2018). The same may be said of the 2021 increase. If these price increases are due to market manipulation or even just a demand increase rather than the supply affecting the price, then the relationship between supply and price maybe even less pronounced than the data suggests. However, the main problem is that even though the correlation coefficient is -0.7. Once you look at both graphs plotted against their time. It doesn’t seem to be a correlation. The supply of bitcoins decreased from a high of 7.6 million in 2014 to a low of 1.97 million in 2022. That’s a -74% decrease. While the Price increased by over 10711% during that time. If we flip the supply data, we see a mere 289% increase. Once we do a scatter plot of the supply vs price, we see that the decrease in supply against price is not very linear. The supply decreases from 7.7 million to 4.8 million and in that time the price rose from $338 to $1071. But after the price rose above $10,000 in 2017 and then went on to $60,000 in 2021. The supply didn’t decrease as much. This decrease seems more logarithmic than linear. The R^2 value was 0.89. If I get the logarithmic line and extend it near zero. So, the supply of Bitcoins left is almost gone. The price of one bitcoin is only around $460,000. So, analysing the relationship between the supply of bitcoins and their price gives us an estimated maximum value of one bitcoin at around $460,000. Not $1 million. I must admit this analysis is very brief and basic, but the main point you should take is, that as the supply dwindles out, the price in raw numbers, would be expected to increase. So, smaller supply decreases will lead to larger price increases as the supply gets closer to zero.
Demand Analysis
Now it's time to analyse the demand for bitcoin and see if it is going up. The main measurement I will use for this is the transaction volume. I will then relate it to price the same way I did for the price. Looking at the transaction volume in USD for Bitcoin, we see that the chart seems quite similar to the price. Once you do a Pearson Correlation the coefficient comes out at 0.85. Suggesting a strong positive correlation between the two. If the transaction volume of Bitcoin increases would that be a strong signal for a price increase? The answer is Yes. However, the number of confirmed transactions per Bitcoin has never topped 1 million. Since 2017, the range has been between 200k - 400k (Blockchain.com, n.d.) Suggesting that the transaction volume increase has been due to larger USD volume and not the number of transactions increasing. This could suggest that people are transacting with bitcoin but just with higher amounts. This could also mean that the interest in bitcoin from a transaction point of view is not exactly going up.
Also, another way to guess the demand for Bitcoin is the number of wallets created. Analysing this measurement, we see that the number of wallets is estimated to be over 100 million. However, the number of active wallets is most likely lower and those wallets that do exist probably do not have that much value. Furthermore, more and more people are becoming aware of bitcoin, but the real interest doesn’t follow suit. 89% of Americans have heard of Bitcoin but that number is not represented in transaction volume or even wallets in existence (Buy Bitcoin Worldwide, n.d.).
To conclude, the transaction volume can be a very good indicator of the future price of bitcoin. However, the real interest in bitcoin isn’t following the awareness and acknowledgement of bitcoin. In my opinion, the average person has heard of bitcoin but doesn’t seem to be interested in working or transacting in bitcoin. This doesn’t much from a price point of view but questions the future usage that many bitcoin investors claim. This would mean the demand is not necessarily going up to a significant degree. Especially to a degree that would allow for $1 million per bitcoin. To explain why this doesn’t mean much from a price point of view, many people think that buying power means the price will go up in a certain asset but that’s not the case. There could be 10,000 buyers in a particular asset and one seller. If the seller has more monetary power, then the price of the asset would most likely go down. So even though the number of people using bitcoin may not reach the level many bitcoin investors want, that doesn’t mean the price won't.
Also, though the the demand for bitcoin does seem to be increasing, it is largely been driven by larger investors who are transacting in very large volumes, hence why the transaction volume in USD I increasing but the number of transactions isn’t too the same degree, this may not be a problem for the price, since the large investors would have big buying power. But these large investors will not be able to manipulate the market since they will most likely be regulated. So the interest from the general public doesn’t seem increasing to the degree bitcoin investors want and even though big investors are getting into bitcoin, I doubt they will be able to pump the price up to $1 million.
Study on what determines cryptocurrency price
One interesting thing to note is, that there was a very good study (Hayes, 2017) investigating what drives the value of a certain cryptocurrency. This study found that the main determinant for prices is the relative cost of production. If the cost of mining bitcoin rises too high, then it will not be profitable for miners to mine and that would increase the transaction cost and time of bitcoin - leading to a price fall. This means to get to $1 million per bitcoin, the transaction costs need to be dramatically reduced for miners. If you do not see that happening, then you also shouldn’t see the price getting to $1 million.
Main Argument
Now to my main argument as to why bitcoin may never get to $1 million per bitcoin.
Let me set the stage, if we have a company that has one million shares to sell at $1. If I buy all the shares the company's market cap is at $1 million, but more importantly I have effectively “pumped” one million dollars into the asset, in this case, the company's shares. Using this logic, we can see why Bitcoin may never get to one million. The current market cap is 619 billion dollars. At 32,546 dollars per Bitcoin (coinmarketcap, 2019). For the price to get to one million the market cap would have to grow by almost 30 times. This means the market would be around 19 trillion. So, using the logic above, for Bitcoin to get to one million there must be almost 18.5 trillion dollars pumped into Bitcoin. A question now arises, is that viable? It took Apple almost 40 years to get to a market cap of just 2.47 trillion. Google, 15 years to get to around 1.5 trillion. The value of all gold ever mined is around 9.6 trillion (www.goldeneaglecoin.com, n.d.). So, to me, the market cap of Bitcoin getting to 19 trillion seems very unlikely, there just isn’t enough interest in the asset to get it there. One may say, well what if it isn’t seen as an asset but rather a currency.
That would mean more people would buy into it to use for transitions, but the problem is if the price keeps rising then the currency applications go down. Why would I sell my bitcoins to buy a car, let's say, if a week later the price of bitcoin may go up 10% next week? The more volatility in bitcoin the less the viability as a currency, the less volatility means the harder it will be for the price to reach one million. So, the argument, that the currency applications will lead to one million is very weak. The logic is also very extremely weak, if the price rises then the currency applications are lowered, so how can one say currency application will lead to a large influx of capital that will drive the price to $1 million.
Conclusion
To conclude, the is a good relationship between the supply of bitcoin, the demand for bitcoin and its price. But even though I do see Bitcoin being a part of our future, these relationships do not point to $1 million per Bitcoin. I would keep an eye on the transaction costs for Bitcoin and how profitable it is for miners to get a good idea of where the market could be heading in the future. Also, I would stay away from the very high and unsubstantiated claim of $1 million per Bitcoin.
References
Cuthbertson, A. (2022). Bitcoin price passing $1 million means society has collapsed, early investor warns. The Independent. Available at: www.independent.co.uk .
Jones, C. (2021). One Analyst Has Bitcoin Reaching $4 Million. Forbes. Available at: www.forbes.com .
Kharpal, A. (2021). Bitcoin at $1 million? Some analysts are bullish but others warn of risks ahead. CNBC. Available at: www.cnbc.com .
finance.yahoo.com. (n.d.). Bitcoin USD (BTC-USD) Price History & Historical Data - Yahoo Finance. Available at: finance.yahoo.com .
Rooney, K. (2018). Much of bitcoin’s 2017 boom was market manipulation, research says. CNBC. Available at: www.cnbc.com .
Blockchain.com (n.d.). n-transactions. Blockchain.com. Available at: www.blockchain.com
Buy Bitcoin Worldwide (n.d.). How Many People Own, Hold & Use Bitcoins? (2022). www.buybitcoinworldwide.com. Available at: www.buybitcoinworldwide.com .
Hayes, A.S. (2017). Cryptocurrency value formation: An empirical study leading to a cost of production model for valuing bitcoin. Telematics and Informatics, 34(7), pp.1308–1321. doi:10.1016/j.tele.2016.05.005.
coinmarketcap (2019). Bitcoin. CoinMarketCap. Available at: coinmarketcap.com
www.goldeneaglecoin.com. (n.d.). Value Of All The Gold In The World | Golden Eagle Coins. Available at: www.goldeneaglecoin.com .
BITCOIN entered the 1D oversold zone for the 3rd time in 1 year.Last time Bitcoin (BTCUSD) broke the 30.000 oversold barrier on the 1D time-frame, was on January 21 2022 and May 19 2021. Practically today marked the third time in the last 12 months that this event took place. During both of those capitulation candle sequences, Bitcoin formed a Support and turned sideways for around 2-3 months. During this process, it hit certain trend-lines.
First, it took 10 and 15 days respectively for those events to hit the basis (red trend-line) of the Bollinger Bands (green pattern) and from that point another 56 and 65 days respectively to hit the 1D MA200 (orange trend-line).
Given the max scenario in each case, Bitcoin could reach the Basis line of BB by May 24 and then the 1D MA200 by July 28. In addition, we are just above the Support Zone formed of the May 19 2021 (30100) and June 22 2021 (28600) lows. There is also a Lower Lows trend-line involved with a max extension around 27000.
Do those indicate a bottom? And if so, will Bitcoin enter a 2-3 month consolidation on its way to the 1D MA200 yet again? Feel free to share your work and let me know in the comments section below!
--------------------------------------------------------------------------------------------------------
Please like, subscribe and share your ideas and charts with the community!
--------------------------------------------------------------------------------------------------------
2017 vs 2021: Peaks and PainComparing the 2017 and 2021 Peaks for for BTC.
After bouncing off the 200 day SMA and 336 days after the 2017 peak, we saw a crash.
As of today, we just bounced off the 200 day SMA and are 229 days from the 2021 peak. Will we see a similar crash?
Fun comparison. Will be interesting to see how it plays out.
Not financial advice.
🔥 BTC / USD — Bitcoin Trading Mid-May 2022🔥Hey there, its Artem and here is update for upcoming week for Bitcoin.
After Bitcoin breaking below $37,000 it making impulsive moves down. Now taking $34,000 zone and might take a short recovery week during mid-May.
Expectations near $37,000ish and possible continuation down to $29,000 and $24,000 support regions in next 6 months.
Currently waiting in cash and taking small risk trades counter-trend (long) to $37.000 to see whats happening next.
Stay safe
Pray for Ukraine
Best regards
Artem Shevelev
bulls don't have any power in bitcoinbecause of :
1- FOMC meeting and increasing interest rate
2- bearish trend in 7 month
3- divegence in volume
I believe in a drop in price to AT LEAST 30k .
BITCOIN and stocks during rate hikes. Is a bottom being formed?On this unique analysis, I am cross-examining the behavioral pattern of Bitcoin (BTCUSD / candles) as compared to the stock market (S&P500 / blue trend-line) during the last time that the Fed starting raising the interest rates (green trend-line).
** Late 2015 pattern. The start of the previous rate hike phase **
The pattern from this sample is quite clear. Last time the rate hike started (December 2015), the stock market was already on a strong correction that bottomed 1 month later. At the same time, Bitcoin was volatile but didn't correct that much and instead started a new Bull Cycle. Notice that the stock market peaked and started its correction 5-6 months before the first rate hike. Obviously the bearish news that dominated the market at the time was China's slowdown (August 2015) and before that a potential Grexit but keep in mind that a potential rate hike was already being discussed before implemented and the markets tend to price in the news long before the event takes place.
** 2022 pattern. The start of a new rate hike phase **
Similarly coming to today, this week's aggressive 0.50% rate hike, the strongest since 2000, catches the stock market already in an ongoing correction. Notice that as in 2015, the stock market peaked and started to fall 5-6 months before this week's aggressive hike. As in 2015, this could have very much been related to the stocks pricing the rate hike months ahead of the actual event. At the same time, Bitcoin has had a low point in January 2022 (and an even lower (bottom) in July 2021), being volatile these past 5 months but with the strong correction already behind it from November 2021 to January 2022.
Can all these be a coincidence? Or do all three form again the same pattern as in late 2015/ early 2016? As we mentioned numerous times from our channel here, Bitcoin's price action since the April 2021 High can be seen as a new form of Bear Cycle, much like the one in 2014/15 that preceded the rate hike. The current volatile range (circle on the chart) looks a lot like the one in November 2015 - January 2016, which kick-started the parabolic rally of 2016/17.
Does all this mean that the stock market is about to price a bottom on this 5 month correction and Bitcoin to start a new Bull Cycle as the Fed moves into aggressive rate hiking (as per their announced plan) in an attempt to win the battle against a raging inflation? Feel free to share your work and let me know in the comments section below!
--------------------------------------------------------------------------------------------------------
Please like, subscribe and share your ideas and charts with the community!
--------------------------------------------------------------------------------------------------------
BITCOIN Short-term analysis on the Falling WedgeBitcoin (BTCUSD) has been trading within Falling Wedge pattern on the short-term ever since April 11. The pattern is close to exhaustion point as the upper (Lower Highs) and lower (Lower Lows) trend-lines are getting too narrow. The direction to which the price breaks, should determine the trend of the next 2 weeks.
The MA periods on the 4H time-frame play a critical part to this as the 4H MA200 (orange trend-line) rejected the price on April 21, while the 4H MA100 (green trend-line) has done so on Apr 26 and 28. Right now the price broke above the 4H MA50 (blue trend-line) and is approaching the 4H MA100, which is the first Resistance and happens to be almost exactly on the Falling Wedge's Lower Highs (top) trend-line. A candle close above it, should be enough to extend the rise to the 4H MA200 even intra day but it is the potential break above the 4H MA200 that should really have our attention. In that case we may most likely see a strong rebound to the 1D MA200 (red trend-line) which caused the rejection on March 28 and practically started this correction, that could happen converge on the 0.786 Fibonacci retracement level.
It is worth noting that while the price action was on Lower Lows (of the Falling Wedge naturally), the 4H RSI has been rising on Higher Lows, posting therefore a Bullish Divergence. That gives more probabilities to a break-out to the upside. If the Wedge breaks to the downside though, the next level of Support to look for should be the -0.236 Fibonacci extension at around 34900.
So what do you think? Do you expect the Falling Wedge to break upwards or downwards? Feel free to share your work and let me know in the comments section below!
--------------------------------------------------------------------------------------------------------
Please like, subscribe and share your ideas and charts with the community!
--------------------------------------------------------------------------------------------------------
Bitcoin And U.S. Interest Rates: A Historical Examination!Hello,
Welcome to this analysis about Bitcoin and the comparison to the U.S. interest rates history. When looking at the current market situation it has to be marked that the global economy is shifting heavily and changes occur in a dramatic manner. These dynamics began since the Corona Pandemic shocked global financial markets, global supply chains, and global government policies in a manner bearly comparable to what has happened before. Since these devastating occurrences, Bitcoin and other assets managed to recover, for Bitcoin an accelerated technical and fundamental adoption has taken place with countries adopting Bitcoin as a legal tender and Bitcoin getting acceptance on a broader scale. All these factors drove the price of Bitcoin upwards till it now reached a high-base while in the stock market the floods of cheap money drove the prices simultaneously the real economy is still damaged by the disruptions and is long not at the point it has been before these historical alterations. Now the Federal Reserve Decided upon increasing the interest rates to tackle ongoing inflation, for the stock market the reaction, in this case, is historically given by a decline however for Bitcoin the story needs to be assessed differently, therefore I am explicating these dynamics.
The FED Interest Rate Hikes Together With Bitcoins History:
Since Bitcoin was founded in 2009 by the infamous Satoshi Nakamoto it has shown up with a massive expansion and disruption within financial markets creating a boom around Bitcoin and Cryptocurrency which formed the first initial wave. After that till November 2015 Bitcoin moved into a correctional phase till the FED decided upon moving forward with increasing the interest rates from zero upwards. This decision also simultaneously marked the Bitcoin bottom in 2015 as it is seen in my chart and from this point on Bitcoin showed up with its massive bull market. The Bitcoin bull market moved simultaneously with the interest rate increases as it is seen in my chart and from the beginning on Bitcoin printed a whooping 65X till it peaked in 2017. According to these factors now there is an indication given that Bitcoin does not react negatively to interest rates like it is the case in the stock market, in fact, the complete difference holds true. The interest rate hikes were positive for Bitcoin as Bitcoin served as a hedge against fiat depreciation and declines in the stock market.
Gold In Interest Rate Hikes, Bitcoin In Interest Rate Hikes:
When comparing Bitcoin to other assets it becomes clear that Bitcoin is a similar asset to precious metals, mainly Gold, not without reason Bitcoin is called the digital Gold and in fact, there are many similarities. As gold has a 5000+ years-long history it gives a good indication on what is likely to happen during rate hikes. As it is shown within the chart below this text Gold also reacted similarly during rate hikes like it is the case with Bitcoin. From 1954 to 1981 a massive bull-market showed up in Gold with a huge expansion and the exciting thing is that the interest rate increases moved exactly simultaneously with the Gold price action showing a clear correlation. After that when the rates decreased again Gold also decreased again. The same dynamic can be watched with the rate increases in 2004 and 2015, always when the rates increased Gold also increased. Therefore, when considering this second crucial indication it gives a sight on what is likely to happen with Bitcoin during this next rate hike period, according to the factors Bitcoin is also likely to increase with these determinations.
In this manner, thank you for watching the analysis, all the best!
"There are many roads to prosperity, but one must be taken."
Information provided is only educational and should not be used to take action in the markets.
BITCOIN This Falling Wedge decides the trend.Bitcoin (BTCUSD) has been trading within a Falling Wedge pattern since the March 28 High, always within the wider outlook of the 1 year Channel Up. The 1W MA100 (red trend-line) is right below as the long-term Support, and hasn't been that close since the COVID crash months.
A similar Falling Wedge was formed when the price was bottoming on the previous Higher Low of the Channel Up. The OBV indicator between the two patterns are fairly similar. The Falling Wedge will most likely determine the trend of the next months, perhaps even for the rest of the year. A break upwards will most likely be a bullish signal for a price jump towards 55-60k similar to that of August 2021. On a different occasion, with break downwards, we need to wait for a weekly (1W) candle closing. Below the 1W MA100, opens the way for the low 30s even the higher 20s levels.
Which scenario do you think will prevail? Will the Falling Wedge break upwards or downwards? Feel free to share your work and let me know in the comments section below!
--------------------------------------------------------------------------------------------------------
Please like, subscribe and share your ideas and charts with the community!
--------------------------------------------------------------------------------------------------------
BITCOIN accumulation to June, then rally. 5 year cheat-sheet.Today I am presenting to you a hidden phase cheat-sheet on Bitcoin (BTCUSD) that I've been working on this week. The time-frame is the 1W (weekly).
As you see, since the 2017 rally, Bitcoin has gone through three Phases of Rally - Accumulation - Bear. The astonishing fact is that time-wise all have been symmetrical to each other:
* The Bear Phase lasts 44 weeks (308 days) while the Accumulation Phase lasts 15 weeks (105 days). Every time the Accumulation ends, the Rally Phase starts.
* Approximately, we can estimate the peaks of the Rallies and end of the Bear Phases using the Fibonacci Time Extensions. Starting measuring from the Peak of the first Rally (0.0 Fib) and the end of the first Bear (1.0 Fib), we can see on the 1.5 Fib extension, the Rally roughly peaked (was just 2 weeks after the extension). The end of the Bear Phase was +1.0 Fib after, i.e. the 2.5 Fib extension. The peak of the next Rally was roughly on the 3.25 Fib ext and +1.0 Fib after was the end of the third Bear Phase.
Based on this model, we have been within the third Accumulation Phase since the February 21 1W candle. Assuming that symmetry continues to hold, this phase should last again 15 weeks, which times its end on the June 06 1W candle. Then the fourth Rally Phase should start and it would be a good idea to sell around the 5.0 Fibonacci Time Extension, even though the model's progression suggests it can go as long as the 5.25 extension.
Note that the RSI indicator on the 2W time-frame (below the chart price action), can offer an additional estimate with regards to when to have a confirmed buy. That will be when the RSI breaks above the MA line (yellow) again (for the 2nd time in the Cycle). Keep in mind that in Phase 2 that took place while the price was still within the Bear Phase, as the March 2020 COVID sell-off distorted the data short-term. That was a Black Swan event that is very unlikely to take place again at least that soon. Still, it gave a very accurate buy signal.
So what do you think about this 5 year old model? Does it offer enough evidence to you that the market is accumulating, and is on the best buy levels before an upcoming Rally? Feel free to share your work and let me know in the comments section below!
--------------------------------------------------------------------------------------------------------
Please like, subscribe and share your ideas and charts with the community!
--------------------------------------------------------------------------------------------------------
BITCOIN correlation with stock market volatility and Halvings.As Bitcoin (BTCUSD) adoption goes on and more institutional investors enter the market, the correlation of BTC and stocks becomes more and more tight. That is a paradigm that the cryptoworld struggled to come to terms with in the past but is now more real than ever. A healthy stock market is good for Bitcoin. The current analysis depicts exactly that notion in terms of Growth and Volatility while incorporating a key parameter of BTC, the Halvings.
** What is a Halving? **
First of all, in case you are a newcomer in the cryptospace, what is a Halving? It is the most pivotal events on Bitcoin's blockchain and is when the payout for mining a new block is halved. This induces inflation in the price, reducing the number of BTC in circulation, thus increasing demand. It happens after every 210,000 blocks (approximately four years). Because of increased demand, Halvings historically tend to create aggressive price rallies after the event.
** Stock market Growth and Volatility phases **
This chart is on the 1W time-frame and as mentioned displays Bitcoin (orange trend-line) against the stock market in the form of the S&P500 index (blue trend-line). The stock market since 2011 has gone through clear phases of Growth (green zone) and Volatility (blue zone). Out of the past three Bitcoin Cycles, two of them make almost exact matches: BTC's Bear Cycles with Stocks' Volatility Phases and BTC Bull Cycles/ Rally Phases with Stocks' Growth Phases. Slight exception was 2013/14, where BTC peaked in November 2013 but the stock market Growth Phase continued for another year. By the time the stock market volatility started, BTC had already made the bottom of its Bear Cycle.
We may have a similar situation with the current BTC Cycle as well. Assuming that BTC's peak was in April 2021 and not November 2021 (slightly higher high), then as in 2013/14, the stock market Growth extended almost 1 year after BTC's peak. If that's the case and the correlation continues to hold, then BTC's bottom was priced early this year as the stock market volatility has started since the start of 2022.
Another interesting element is that the middle of the Stock market volatility phase has always been very close to BTC's Bear Cycle bottom level. Technically, that appears the most optimal level overall historically to buy with confidence for the long-term. If the current Stock volatility phase lasts 84 weeks as in 2015, then its middle should be around October 2022. If however the volatility phase lasts as long as 2018/2019 (107 weeks), then its middle should be around January 2023. Note that a Volatility phase that long would match almost perfectly with the next Halving of March 2024, which as mentioned at the start of the analysis, kick-starts BTC's Parabolic Rally.
Do you think this is a good correlation to time a solid buy entry on Bitcoin? Feel free to share your work and let me know in the comments section below!
--------------------------------------------------------------------------------------------------------
Please like, subscribe and share your ideas and charts with the community!
--------------------------------------------------------------------------------------------------------
BITCOIN A correlation with US10Y and EURUSD hints to a rallyThis is a simple yet very insightful correlation of Bitcoin (BTCUSD orange trend-line) with the US10Y (blue trend-line) and the EURUSD (green trend-line) pair. The analysis compares the 2014 - 2018 era with 2018 - 2022.
As you see, when the EURUSD pair peaks, BTC tends to form (or be close to form) a top on its Bull Cycle, hence starting its Bear Cycle. Similarly, when the EURUSD pair bottoms and starts rallying, BTC tends to start the aggressive rally of its Bull Cycle (note that normally it is well past its bottom formation).
At the same time, when the US10Y peaks, BTC makes (or is around) the bottom of its Bear Cycle and starts its Bull Cycle. Similarly, when the US10Y bottoms and starts rallying, BTC tends to start the aggressive part of its Bull Cycle (as in the case of the EURUSD).
Currently, on this 1W chart, the US10Y is on a small pull-back. Based on the above, if this pull-back is sustained, we may see Bitcoin form the bottom of the Bear Cycle of the past 12 months and gradually start rising again. The final confirmation of an upcoming parabolic rally can be when the EURUSD bottoms out, but as mentioned EURUSD bottoms a bit later than BTC.
How accurate do you think those correlations are? Do you also agree that if the US10Y reverses, BTC will start a new Bull Cycle? Feel free to share your work and let me know in the comments section below!
--------------------------------------------------------------------------------------------------------
Please like, subscribe and share your ideas and charts with the community!
--------------------------------------------------------------------------------------------------------
