Bitcoin finding a bottom?

There is still a tug a war going on from analysts, as to whether Bitcoin is still in a bull market, or is it about to rollover into a bear market.  It still appears 50/50.  We honestly don’t know.  We do know that what we have seen so far has not been a blow off top.  There has been no parabolic bull run yet.  We predicted (last year), that this would happen in November 2021 through February 2022.  However, one hypothesis is that since the 2021 raw material and shipping shortages kicked in, ASIC miners have not been shiping to miner facilities in the usual volumes.  Thus, they have not received these miners on time, and hashrate has not caught up with demand for Bitcoin.  This shipping delay issue, has pushed back this parabolic bull run, and the miner capitulation that happens when miners have to sell their Bitcoin to keep up with hashrate.  Many mining experts who track ASICS shipments are thinking this fall would be most likely time frame for miner capitulation.  Until the miners are forced to sell a lot of Bitcoin, the bull run is still alive.  Yes, it has been on life support all of 2022!  However, what factors could change that for the rest of the year?  Lets start with the banking industry.  Here is a Thomas Jefferson quote warning us about central banks:

 

 

JD Rockefeller, and JP Morgan, helped the Rothschild family start the first US central bank in 1913.  Since then inflation, deflationary crashes, and raw material shortages have consistently derailed the US economy, and the global economy.  Now we have the US Fed raising rates 25 bps, back in March, with a 50 bps rate hike expected in May.  However, look at this federal public debt total below!:

 

 

Federal public debt has risen 250% in the last 12 years!  We have maintained that the rate hikes will have to eventually give way to more QE and subsequent inflation.  The reason being, rate hikes will eventually (above 2.5%) begin to create a crash.  This will force the Fed to go back to QE and or stimulus.  If this occurs this fall, and miner ASICS shipments are still delayed, then Bitcoin will likely see the parabolic aspect of this bull run later in the year 2022.  These next few charts (based in chain analysis) focus on long term holders, whales who own over 1K Bitcoin, and Bitcoin on exchanges.  Long term holders and realized price mimic each other on this next chart.  Short term holders are above long terms holders, and as long as that holds true in the future it will pull up realized price.  When realized price begins tilting 45 degrees on this chart the price will become parabolic like 2020 again.  Here is the chart below:

 

 

Realized price is the profitability of the newest coins owned on the blockchain.  This next chart is similar.  Long term holder / short term holder supply rate of change.  Will short term holders, holding longer as the long term holders are, raise the Z-score and help bring up the Bitcoin price?:

 

 

It could, however, financial behavior is not done in a vacuum.  Geo Political events affect the Bitcoin Z-score.  Therefore, until the DXY (US dollar index) begins droping due to QE and inflation, Bitcoin may not begin the parabolic upturn.  If the Fed fund rate climbs well above 3% and does not cap out at 2.5% (as expected), then the DXY will keep climbing and Bitcoin will keep accumulating.  Thus, the Z-score will not climb like it has been the last couple of weeks.  A higher DXY index will keep short term Bitcoin holders down, thus reducing the Z-score in the above chart.  SOPR (spent output profit ratio) measures the profitability of coins onchain.  In the chart below, we see SOPR the same level as September 2020.  There is also a bullish divergence in the chart.  However, the price level compared to 2020 is 4X higher than at that time.  It could be pointing to a local bottom as long as global macro black swan events don’t come up soon.  That has been a habitual problem the last several months.  Here is that chart below:

 

 

Another major factor in where the Bitcoin price is going in the mid term, is longer term holders accumulation.  This chart ratios Bitcoin supply moving offline for over a year, into cold wallets presumably, to the Bitcoin price.  Whenever the rate of change reaches an alltime high, Bitcoin price moves begin to materialize upward.  As more and more coins are moved offline, it creates a supply shock.  The supply last active 1 + years ago ratio is telling us how much supply is out of circulation.  Here is that chart:

 

 

Most of these charts rely on onchain metrics.  These may not always be accurate.  We focus on supply shock.  Anything that measures a reduction in circulating supply of Bitcoin.  That is what will move the price.  Understanding that, the halving, and keeping a low time preference so the coins can be held for years not weeks or months.  That is the key to success investing in Bitcoin.  We are not financial advisors and this is not financial advise.  We know that the US dollar has been off the Gold standard almost 51 years, it has been off the Petrodollar system about 14 days, and only by raising rates can the dollar’s value stay high.  This game will eventually be lost, and all that will be left to tie the dollar to, will be Bitcoin!  We are all early to this technology.  That won’t always be true!
 

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.