Bitcoin Dumped again and now sits at the Bottom of the Golden Pocket

To us both technical analysis, and global macro analysis, are equally important to understand where Bitcoin is, and where it is going in the future.  We give both equal allotments of our time.  This gives us a well-rounded approach and understanding to the wild wild world of Bitcoin!  From the global macro perspective, we think the rate increases will not be permanent if they happen at all.  Therefore, we see further stagnation and degradation of the USD value and purchasing power.  The Fed cannot afford to raise rates for long.  Too detrimental.  Time will tell if our prediction is right or wrong.

 

Regardless, Bitcoin will be the alternative currency and inflation hedge of choice whether it’s a deflationary crash, or inflation, stagflation, everyone is running from.  We know that is going to take some time, we don’t know how much time it will take.  The clock is ticking on this bull run cycle.  Bitcoin has to make the parabolic turn, have a bear market and be ready for the block reward halving by early 2024.  If Bitcoin is going to turn parabolic, it will need to happen in six months or less.  There is not that much time left!
 

Below is a historic chart, showing the “panic zone” when Bitcoin bounced off of the golden pocket and performed a reversal.  Will it happen a third time?  Appears somewhat likely.  Again, time will tell.  Nothing is obvious about this up and down, consolidation Bitcoin has been doing since mid-November.  Here is the chart:

 

Since yesterday’s dump fear and greed index is down to a lowly 15!:

 

Lowest it’s been since the March 2020 Corona Virus dump down to $3,800!  Neutral ATM bought into Bitcoin right after that dump.  We were fortunate to get in when we did.  Now we are stubborn and tight fisted about staying in Bitcoin and not bailing whenever it dumps.  We know institutions want to flush out as many retail investors as possible.  Not us!  Thus, the best way to handle these dumps is do your own research and stay away from being emotional about your investment.  Remember, we are not financial advisors and this is not financial advice.  We just simply put our learning experiences on our blogs every weekday.  Diving into global macro analysis and technical analysis helps stay un-emotional about Bitcoin.  That is how we have stayed in almost 2 years, not selling a single satoshi!
 

Will Clemente sent this chart yesterday.  Reminding us that open interest (leveraged longs or leveraged shorts) are still prevelant in the Bitcoin market, even after this big dump yesterday.  Perhaps, some of these leveraged positions left, are shorts.  That would mean that the price could reverse and wipe out short positions that are leveraged!  We suggest to never leverage and only buy Bitcoin on the SPOT MARKET!  Leveraging is too risky, we never do it!  Here is the chart:

 

Wiping out leveraged shorts would make sense at this point because price action is at the BOTTOM of the golden pocket region of Bitcoin.  That is an area between two fibonacci retracement zones where Bitcoin historically always finds support during a bull run.  If it closes a weekly candle below this area, the bull run is over!  Here is a chart showing the set up and where the golden pocket is:

 

 
The green zone on the above chart is the golden pocket.  Bitcoin MUST stay above this area on the weekly close Sunday night.  We believe it is likely Bitcoin finally found the bottom!  We must remember, we are NOT invested in outcomes, we analyze data.  If the data comes back on Monday the 10th that Bitcoin has reached bear market territory.  It is what it is.  We hold Bitcoin through the bear market until the next top comes, and we may continue doing this for a long time as well.  You can always sell a little Bitcoin to buy something as needed (house, land, car, college tuition). 

 

So, we are watching the golden pocket closely to see if Bitcoin holds it or not.  We believe it will and therefore, a reversal pattern would need to emerge soon.  Otherwise, we are now in a bear market!  It is what it is!  Of course we would not like that, but we have to stay away from being emotional about investing.  It is purely data analysis.  This final chart helps keep emotion out of investing because it is a 12-year historical Bitcoin chart:

 

 

Stock to flow demands that after every block reward halving Bitcoin has a bull run, blowoff top, and a bear market, before the next halving.  The last halving was May 20, 2020.  We have seen no blow off top nor a bear market yet. Therefore, our hypothesis is neither has happened yet, but they will by early 2024.  March, April, or May at the latest.  The trajectory of Bitcoin bull runs may be slower now, that does not mean they cease to exist.  Just less pronounced.  Stay engaged in Bitcoin, buy this latest dip as we did.  It could be the last one before the parabolic turn up!

 

Neutral ATM is here to get everyone off of zero Bitcoin.

 

Give Neutral ATM a try.  We have low rates, convenient locations and we are expanding. Contact Neutral ATM, we will answer all your questions about Bitcoin and using our ATM machines. Find a Neutral ATM Bitcoin machine location near you.