- 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:
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:
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.
This article was written by
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.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.