Bitcoin Market Overview and the Upside Down World
I hate the cryptocurrency market today, and I'm not afraid to admit it. Everything is going up, while Bitcoin and Cryptocurrencies stagnate and threaten more downside.
Everyone’s making money except in crypto
Here are some bullish indicators that simply mean nothing in this environment. This is the part that makes no sense whatsoever.
The stock market is up only. Record highs into record highs.
Real estate is at record heights.
People still have a surplus of money, and it appears to be a risk-on environment.
High inflation should be a driver for Bitcoin.
Politicians are now talking about and are more inclined toward Bitcoin.
We’ve had the halving and the post-halving dump, albeit a shallow one, and should be rallying off the bottom.
The high time frames on Bitcoin looked fabulous (until recently).
We even sped up and crossed the previous cycle’s ATH before the halving, indicating crazy bullishness.
We got the ETFs, and they were raking in good money. As expected, it was a short sell-the-news event, but it began to moon after that. The big players were entering the market.
And yet, we’ve now been stuck for months in the exact same tight range worth roughly 30% in the extremes, currently revisiting the bottom. Every time it looks like Bitcoin is going to shit the bed and drag the whole market with it, it bounces, and hope is restored. Every time we attack the resistance at the top of the range, we lose the fight, and back down, we go.
We’re trapped in some sort of limbo, and it’s taken its toll on our hearts and minds. When looking at social media, it’s practically war, and it looks as if we’ve been through a 2018 type of bear market. It’s getting dark out here.
Here are a few charts for comparison
S&P 500
NAS 100
Bitcoin
Ethereum (as representative daddy of altcoin chains)
Dogecoing (as a representative leader for the meme coin market)
Solana (as the leader of this cycle)
These days, correlation only works to the downside, it would appear. The cryptocurrency and Bitcoin markets seem to be the mangy dogs of the pack. No one wants to even look at them, much less invest in them.
Looking around, I can confirm that retail (en masse, because I’m retail, too) just isn’t interested. Perhaps it is due to the uninspiring previous bull market. Maybe there’s just too much money to be made elsewhere, with less risk. I don’t know.
It could also be that the meme spawning has gone crazy of late, which means that there are just too many different, ever-new things to gamble on. With a somewhat limited inflow of new cash, we’re just running around chasing our own tales.
The wrong side of the market
“You should have been a bear! It’s obviously a bear trend on the lower time frames, dude!” I mean, the bears were right-ish. Still, for the last couple of months, they also haven’t gotten any follow-through, same as the bulls.
Technically, they’re right. We’ve been trapped under the 50-day moving average for a while now, which would indicate that any pump was nothing but a bearish retest. But something similar could be said for the other side. It’s a no man’s land if you ask me.
With the way things are set up, we could be in for a rough couple of months
The Mt. Gox selling pressure, which is supposed to start right about now, is quite a threat. The defunct crypto exchange is supposed to return over 140,000 bitcoins to victims of the 2014 hack, and most expect a selling euphoria.
And then, there is always the looming threat of a legacy market blow-off top that is now a few years late. There, the bears have been consistently wrong. Logic dictates that a cool-off is inevitable. Timing it, however, is another matter altogether, especially since we’re in an election year in the US, where money printers might go “brrr” all over again.
For what it’s worth, my advice is to go touch grass and leave the charts alone for a few weeks unless something drastically changes. I don’t it’s worth the time and effort right now.
Let’s hope that this similarity in timing and price action is just a coincidence. Looking back, we’ll hopefully laugh at it. But if it isn’t, and we’re in for a bearish few months, maybe we can look forward to the ultimate bull market conclusion, which should end with a bang.
It’s a good thing that fractals are a joke in this space. Things move way too fast and change all the time. The bad news is that every cycle is unique, and the future is impossible to predict with any degree of certainty.
That’s enough of charts and words
I have no wisdom to share except to maybe trade less and with tighter risk in such markets. They really are a battlefield full of traps, regardless of the Crpyto Twitter celebs telling you otherwise, flashing their photoshopped PNL. I think this might be “just survive” territory now. Focus on that, and step on the gas when conditions improve.
Stay safe and sane through this storm, friends. Now, if you’ll excuse me, I have a resume to send to McDonald's to see if my so-called trading skills are worth anything when flipping burgers.