The Only Bitcoin Analysis You Need

After a night of little sleep spent assembling this report, I’m confident it was worth the effort. Today, I will delve into the intricate dynamics of Bitcoin’s market performance, employing a detailed examination of technical indicators and macroeconomic factors. As I navigate through various data points and chart analysis, I aim to uncover the pivotal price levels and potential market directions Bitcoin might take in the near future. This report is crafted to provide investors and enthusiasts with a clear understanding of the current state of Bitcoin and its potential trajectory, considering both the historical context and recent economic developments.

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Figure 1 presents the famous consensio chart of Bitcoin. I opted to focus solely on the moving averages, a fundamental aspect of technical analysis, as they exclusively measure trends. Admittedly, the findings are a bit concerning. I’ve highlighted the 2021 all-time highs for comparison. We can observe that the 3-day and 10-day simple moving averages have intersected, signaling potential market weakness. Typically, after a significant upward movement, a crossover of these two SMAs suggests a substantial correction unless a bullish reversal occurs shortly thereafter – as was the case following the ETF launches. Recently, I took profits on some of my holdings to avoid previous mistakes made during the past bull cycle.

Figure 2 examines the 30-day SMA. As Bitcoin rose from the early $20,000 levels, it retested the 30 SMA before continuing its upward trajectory on the weekly chart. Coincidentally, this retest aligns with my “final buy the dip” range of $56,000 – $57,000. If the parabolic SAR, depicted in Figure 3, breaks at $59,000, that range could be where Bitcoin finds support.

The $59,000 mark is crucial. Comparable to the significance of the $31,000 level, a break below this with bearish confirmation could lead to turmoil, whereas holding it could propel Bitcoin into the final phase of its current parabolic trend, as shown in Figure 4. Consequently, I’ve added two orders to my long position initiated originally at the $43,000 level: one at $59,000 and another at $56,000.

On the daily timeframe (Figure 6), Bitcoin shows further weakness as the 20-day and 50-day SMAs have also crossed bearishly following a price reversal from these averages. Unless Bitcoin surpasses $67,400 soon, a drop to $59,000 seems more probable.

In the daily momentum chart (Figure 7), the Momentum Reversal Indicator has triggered a red star following an MRI top, signaling a continuation of bearish momentum. In summary, the $56,000 – $59,000 range will be pivotal for Bitcoin in this bull cycle. A drop to these levels is likely, and I plan to buy as much as possible if this scenario happens. Falling below the $56,000 – $59,000 range could signal a short-term bear market, upon which we would have to reassess things again. However, a bounce could clear the path for Bitcoin to exceed $90,000.

From a macroeconomic and political perspective, the current administration is considering further tax cuts, with expectations for sustained high interest rates and employment data showing an increase in individuals holding multiple jobs at the same time – near ATH levels. This could be indicative of potential stagflation, where limited consumer spending could eventually temper inflation as firms struggle to maintain higher pricing. Such conditions would likely strengthen the dollar and lead to a volatile stock market, with commodities like cocoa and orange juice trading higher. A period of stagflation might be necessary to reset the economy. In such times, risk-on assets like Bitcoin typically decrease in value.

Interestingly, the monetary base, illustrated in Figure 8, peaked in November 2021 at the height of the last bull market, driven by pandemic stimulus checks and investment surges.

Looking forward, Bitcoin requires a new narrative. In 2017 the story was CME Futures and the ICO bubble. During 2020 – 2021, there was increased adoption, with significant purchases by Tesla and other notable institutions, along with extensive marketing efforts during events like the Super Bowl, SnL, and the rise of NFTs. However, despite a rally from the late $20,000s to $73,700 in 2023, driven by institutional investments and the halving, no new catalysts are currently evident to further drive Bitcoin toward the $100,000 mark.

Nevertheless, I remain excited. All I’m doing now is stacking sats and spreading Bitcoin education across the world. It’s essential not to panic if the market falls, as significant gains often follow substantial declines in each halving cycle.

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