Crypto Chartbook - Bitcoin On The Move

Summary

• Sustainability is where large long-term profits can be made, and Bitcoin doesn't disappoint.
• We see no indication from the most critical larger time frame why Bitcoin prices could not continue to advance soon, even to surpass their all-time highs within the next months.
• Bitcoin most likely gets pushed one more time to lower price levels before advancing.
• Our daily chart shows the three most likely probability scenarios.

With risk in mind, we perceived the recent retracement in Bitcoin (BTC-USD) and the Grayscale Trust (OTC:GBTC) with joy. The trend is your friend, and as such, its health is where a trader focuses on. The market needs to breathe, and without price declines, a trend isn't sustainable. Sustainability is where large long-term profits can be made, and Bitcoin doesn't disappoint.

Our optimism for further advances is principle-based. The following analysis shows why we perceive a continuation in price advances with low-risk entry possibilities.

BTC-USD, Monthly Chart, A healthy breath:

BTC-USDT, monthly chart as of March 1st, 2021.

A glance at the monthly chart above shows that as much as the trend is steep, it is in good health. The upper wicks on the monthly candles indicate a healthy breath. What expands must retrace. And Bitcoin does just that. It has strong pushes upwards but then gives profits partially back. It takes a deep breath up to be followed by harmonious breathing out. We see no indication from the most critical larger time frame why Bitcoin prices could not continue to advance soon, even to surpass their all-time highs within the next months. There is no blow-off volume plotted nor irregular fractal volume distribution of supply and demand zones. There are no warning signals of ill health. This athlete is fit for a marathon.

BTC-USDT, Weekly Chart, Most likely:

BTC-USDT, weekly chart as of March 1st, 2021.

All trading instruments have their probabilistic personality. Bitcoin is volatile and has typically larger retracements in size. These personalities provide for a good mathematical guideline of what is most likely to happen. Of course, they can also change over time).

A closer look at the weekly chart above shows prices to sit right below a distribution zone indicated by a volume analysis showing resistance overhead at US$47,396. Bitcoin most likely gets pushed one more time to lower price levels before advancing. Therefore, we are buying into the market within a range center at prices of US$37,630 (+/-1k).

BTC-USDT, Daily Chart, Bitcoin on the move:

BTC-USDT, daily chart as of March 1st, 2021.

We see three possible scenarios. The daily chart shows in their most likely probability scenario: number one likely, scenario two the second likely, and scenario three the least likely. One should participate in all three events with entries and use our quad exit strategy to protect these events from costing any money. Instead, irrespective of their longer outcome, provide for at least a small profit.

Bitcoin on the move:

With larger time frames in mind, technical analysis isn't the only factor pointing towards higher prices. The sustainability of Bitcoin and demand for this technology are more and more transparent. Some argue that Bitcoin´s anonymity creates crime. We find the true principle there to be an aspect of criminal behavior within humanity. Cash is used for some unlawful transactions. That doesn't render cash transactions inherently to be illegal. In a world where excessive data eradicates privacy, one needs to be asking if the need for a payment system that allows for some of that privacy isn't something necessary. That is to say protection of human potential that is born out of personal privacy.

Less philosophical, there is a need for wealth preservation right now. Worldwide monetary policy eradicates the value of fiat currency fast. For the short term, we find there to be a threat of further value dilution. Upcoming stimulus package payments require money printing again. For the midterm, we see the first signs of a different attitude towards the risk of the printing machine between European countries and the US. Ill-gotten behavior has an extended shelf life when the whole world dances the same waltz. Once opinions diverge, resulting in various diverging actions, the house of cards is tumbling fast. In this case, while Bitcoin might be dropping temporarily and take one of its deeper breathing out phases, it will be the first that takes an inhale on a level astounding even its fans.

Analyst’s Disclosure: I am/we are long BTC-USD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Comments

[manfac]

With ALL this potential for Bit coin specifically and crypto currency secondarily , moves ; what backs these moves ?

[Montana13]

It's on the move today, for sure. Maybe some panic coming tomorrow after the 1,000,000 new jobs report?

[coloradan]

Lesson: As BTC rises, take increments off the table. If it corrects, buy back when it's 20-25% down as the trend is upward and BTC will rebound. I've done this twice, making $12k the first time and up $8k on my second time.

[kjseagle1]

@coloradan nice working plan - do you just put in your coinbase wallet, wait it out ?

[Kayden1]

$200K+ USD this year. Don't hold past October.

[FlagFootballSaint]

@Kayden1
Why not?

[SilverBullit]

@Kayden1 @FlagFootballSaint Late September through the end of the year could mark the start of the next bear market in crypto based on the historical 4-year cycle it has gone through since inception. You won't want to hold ANY coins during that time, except maybe stable coins that give you a nice yield on all those gains.

[FlagFootballSaint]

@SilverBullit

So why would the past be an indicator of the future for this unpredictible asset?

[kjseagle1]

good article---scenario 3 appears to be happening now.

[jimbo162]

interesting charts Florian. the upside has much potential

[ababich1]

Phony analitycs is not going to help bitcoin. Bitcoin fails as a currency and as a store value. There will no doubt be a digital currency perhaps backed by blockchain and some real asset. Short of that it is just a pyramid scheme hyped by notable players that have a vested interest. This sort of volatile behavior is clear evidence that btc will someday go to 0.

[Aaron173]

@ababich1 yeah man. 12 years of failure. Just look at that chart. Surely it's all over once it hits 250k, right?

[FlagFootballSaint]

@ababich1

Why do you think more and more big gun investors and institutional investors are leveraging bitcoin in their portfolio?
Really interested to understand if there is something you know which they don't.....

[ababich1]

@FlagFootballSaint
They are not. Most are in it for fees...THEY HAVE NO SERIOUS MONEY INVESTED.

[Aaron173]

Man, am I kicking myself for not getting into cryoto years ago. It's so much better than gold, which goes nowhere even during "rallies". In a few short months, I've almost tripled my initial investment, even with a very conservative and defensive trading strategy. Even if BTC went to zero this instant, the realized profits I locked in would still dwarf the rest of my portfolio combined.

[viperultimaevolution]

Dont forget all the Bitcoin miners having huge increase in revenue with this Bitcoin creation boom RIOT, MARA, BFARF, HVBTF, INTV and my favorite newcomer in Virginia BFCH. Go BTC..

[kjseagle1]

@viperultimaevolution do you have more info on BFCH... how many miners in operation--on order and what are they mining---BTC or ETH?
thank you

[Hoi-polloi]

@kjseagle1 I don’t think they have any yet operational...supposedly any day, for the last few weeks...beware

[viperultimaevolution]

@kjseagle1 they have 2,000 ASIC miners and are putting them in 3M immersion fluid tanks for cooling, no fans

[M495]

Appreciate the look at bitcoin.
But these analyses always leave me wanting.
I am an experienced data analyst--though in pharma and engineering--and it's clear bitcoin and other crypto data shows no reasonable connection to reality.
My question--mostly to myself--is how will we know crypto is operating in some reasonable way? Namely a way that allows for reasonably accurate medium and long term predictions.
I'm guessing it will take adoption on broad and stable enough levels to lock movements to reality.
I'm also a physicist and at the moment crypto is on the level of quantum mechanics--interesting, predictable in some ways, but mostly mysterious and functions in ways that are hidden and unpredictable. Even scary.

The way I sleep at night is to only have a minor stake in crypto at the moment, Though like a lot of people, recent events has my stake now not so minor.

[sliman21]

@M495 Read The Bitcoin Standard and Dan Held's papers.

[Aaron173]

@M495 you pose very good questions, but to answer your rhetorical question with another: how do you know that *any* asset is trading in a "reasonable" manner? My follow-up question would be: as long as you make money, does it even matter? We're currently in an everything bubble. When the bubble pops, it doesn't matter whether you're in something sane and rational like blue chips, or something volatile like crypto. You're going to get demolished either way if you don't get out the exit door early. The shape of the curve might look different between asset classes, but you're going to make a quick trip to the same endpoint.

I do like your comparison of crypto to quantum mechanics though. Crypto does have subjective eigen attributes. Even though the Shroedinger model isn't applicable here, crypto in an abstract sense can definitely be seen as a superposition of states, much more so than traditional equities and bonds.

[Mebarrett3]

@M495 metcalfe’s law

[Bitit]

Those charts vastly underestimate how fast Bitcoin moves in a bull run. Close to $80k by end of year...more like by end of April as the next step up before the next weeks long correction. $100k+ is likely to happen by July.

[SilverBullit]

Good stuff as always Florian. In all of those scenarios I expect ETH to outperform BTC.

[FlagFootballSaint]

@SilverBullit

Why do you think that? 

ETH only seems to follow whatever Big Daddy BTC does. ETH does not seem to have a (charts-)life on its own.....

[SilverBullit]

@FlagFootballSaint What happened in January when BTC corrected? While BTC finished the month pretty much right where it started, ETH went up about $1000 (~720 to ~1720). ETH does follow BTC, it lags then outperforms, lags then outperforms. The ETH-BTC chart is beautiful. I think can you can at least 3x BTC gains by being in ETH in 2021. Or if you watch the chart closely you can bounce back and forth between the two a make a killing. ETH loves a correcting BTC (as long as it is not crashing).