March 2023 Bitcoin Chart Overview
So are we bullish, bearish or just ranging? What's the right play for the next few months?
The first three months of 2023 have gone by and it’s time to check up on how things are going for Bitcoin. It would appear Bitcoin has some new year’s resolutions of its own. Bears seem to have packed up for hibernation and bulls are out in full force.
But is it time to go “full bull” or are we jumping the gun a little bit here?
The 3 months candle tells a lovely story about where we are or at least appear to be in the cycle. It’s kind of hard to argue with this picture. Every bear market once ended with a giant green candle. Is this the candle that ends the current one? Only time will tell, but for the moment one should probably assume it is.
If we zoom in we can see that things are starting to look interesting again. Previous ATH of roughly 20,000 USD has been tested, the price went under with all the shenanigans during the bear market in 2022 and has now reemerged above with a bang.
The same can be said for the moving averages. On the monthly, all the EMA’s and SMA’s have crossed into positive, bullish territory again.
Monthly looks great, we broke out of the bottom consolidation and closed above. Indeed it does feel like Bitcoin wants to go up, not down and is quite persistent in its stride.
Weekly is displaying an almost textbook dip under support, break back above and push higher, consolidation, dip, push up, consolidation pattern. What can I say? It looks bullish and is slowly ready to attack the 30,000 USD price and more.
On the daily time frame we seem to be consolidating within a relatively tight range and Bitcoin doesn’t seem to want to give any pullback to let the bystanders back in. A quick glance would confirm that the price keeps trying to break the resistance. While it also keeps failing, chances are that one of these days, the battle will be won.
The thing with Bitcoin and its bullish breakouts is that when the time is right, when the bulls are at their strongest, we don’t get any “healthy” pullbacks.
They happen, but they’re rare. Especially in the beginning phases of a new bull cycle. I have been left empty handed many times, when I refused to buy at the highs and was waiting for the pullback. By the time it actually happened, the bullish momentum had lost some of its steam as it was now a less optimal time to enter. I fear the situation might be similar today.
In 2019 for instance, there were no dips and I should know, because I kept readjusting my buy orders, moving them up and up and still none of them got hit on the way up from the bottom. A frustrating affair, leaving me empty handed and grumpy for the majority of the move. By the time we got our first 20% dip the price of Bitcoin had already moved up by 165%.
If we were to repeat this path and I’m not saying that we will, we would first overshoot 41,000 USD and then correct back to 32.000 USD. All of which is fairly higher than we are today. There is no reason it “should” happen this way, but something similar “could” happen. Ask yourself, “would I be happy with my treading if that were to happen and I was just an observer the whole time?”
It would seem most of us are waiting for some sort of shakeout, a pullback to at least the 24-25,000 USD area in order to load up on some swing longs.
While it’s not impossible, the majority is seldom right and in case it does take an ugly dip, we might find ourselves unwilling to buy as the chart would look a lot different. Not to mention that the odds are good that a dump of 20% for example would probably be accompanied by some very scary narrative, as per usual. Still, should we get it, it’s worth a shot on the long side.
Amid the FUD we could be tempted to surmise that this was just a false breakout and we’ve just returned back to the range for the foreseeable future. Nothing wrong with that, but the bull thesis would simply be less likely in that event. Or rather, our bullishness would be tested, were it to happen in an ugly way. That is all.
In strong bullish Bitcoin breakouts you don’t want to see deeper pullbacks or beware.
“All this talk and screenshots only to confirm that we’re looking bullish? We have eyes, we know!” Well, yes. There really isn’t much more to say.
Except that the macro picture still isn't brilliant and the money printers are still dormant, banks are still on the verge of destruction and there is frailty starting to show up in the world economies. Real estates are slowly coming to a stand still and for the moment, mortgage interest rates are still on an upward trajectory making it all absolutely ridiculous these days.
Does it mean it all has to bust and we have to get another recession, crisis or god forbid, a depression? No, but it is far from impossible. In fact, the way things are looking at the moment, I would venture to say it’s almost probable. Sooner rather than later.
It’s hard being bullish Bitcoin when one is bearish the economy.
While they are fueled by different narratives, perhaps even opposing ones, Bitcoin simply hasn’t existed in anything resembling restrictive central bank policies, tightening economy or a recession. For the past 15 years the general markets have been “up-only”, with the ever powerful wind of central banks printing money and quantitative easing behind their sails. Even the Covid pandemic halting economies around the world to a stand still, was nothing but a blip in the charts, remedied by relentless showering of the markets (and people) with free money.
Bitcoin was born out of the ashes of the previous financial crisis as a beacon of hope for humanity, but has yet to be tested properly under really gnarly conditions.
Banks going down should theoretically, but more just ideologically, be good for Bitcoin. The fact remains that when the money backs out of risky investments, when there is no free money, when people are losing money, jobs, investments, perhaps even their homes, it stands to reason there should be some sort of effect on the price of Bitcoin as well. And not a good one. As it is true that tide generally lifts all boats, the reverse is also true.
Sure, it’s possible that we have now entered the “new era”, a new paradigm where Bitcoin is universally seen as a safe haven for all, but I’m not convinced we’re there yet.
I don’t see people running away from the banks into Bitcoin, but it is talked about and accepted in the widest circles ever. All the vicious attacks from the governments, namely the USA government at the moment, aren’t helping this cause either. Whilst it was inevitable that the establishment, government and banks would fight tooth and nail for their dominance and conservation of power - let’s be honest, they were never going to take this lying down - it’s hard to imagine this being good for the short to mid term price movements.
Still, the all prevalent meme: “short the banks, long Bitcoin” has indeed been the bet of this century!
“But Sir, what about altcoins?”
They too seem to be waking up, with a few popping up left and right. I’ve even noticed some “dino coins” waking up, which tends not to be too good a thing for the prospect of a Bitcoin bull run, as it indicates a transfer of money from the first mover to the last. Nevertheless, Bitcoin is still taking all the spotlight and this is where the money is waiting for a possible big move upward.
It’s not a bad time to start making lists of potential candidates and trying to surmise who the winners of this next altcoin cycle will be though. If you’re into that sort of thing.
A general rule of thumb is that the winners of the previous cycle will not be the winners of the new cycle.
So shake off your loyalties, forget the dinos and focus on what the kids are hyping up today. After all, hype and marketing is all the alts have for them anyway. At least as far as I can tell.
So now what? Bitcoin isn’t giving us pullbacks and we’re bullish. We want to take a ride with it, but aren’t getting the entry we desire. What to do, what to do? Well, we have a few options available to us.
We can wait and hope that we do get our desired entry and that all eluding pullback.
We set our alerts or just buy orders and we wait. Maybe we’ll get it, maybe we won’t and we’ll have to watch the price pump without us. This was me for most of the bull markets in the past, hehe.
We can wait for the next price breakout and bet aggressively.
In a breakout we’re betting on the price breaking through the 30,000 USD resistance and hopefully higher. The risk here is that we’re going to go long, buy at the top and if the breakout turns out to be a fake-out, we’ll have to take a loss. Won’t be the first, won’t be the last. Fun fact - did you know that breakout trading is notorious for its very low win rate, but when done right still reigns supreme with extremely large profit potential? Do with this information what you will.
We can go dancing with the bears and try to short this “obvious fake out”.
Thus believing that the momentum of the bulls has been lost and we’re going to the lower part of the range. Some dare even dream of new lows. It’s hard to argue with the risk to reward ratio at this point, but the odds do still favor the bulls. Trend being your friends and what not.
We can take the long view and deduce that we have now probably broken out of the bear market and in a year or three, the price of Bitcoin will be higher than it is now.
This too is a perfectly fine theory and if played right, could be a very calm, easy, but slow way to a nice profit in say 2025. This would then give us ample time to build our position however we see fit. Perhaps we DCA (dollar cost average), maybe we simply buy a little now, more if it goes up or down and keep repeating until we run out of cash (in adherence to our predetermined size of course).
Or we could simply ignore the big picture and focus on trading the lower time frames.
We don’t have to try timing the big moves, and do all this mental “Hocus Pocus”. We can simply give up on being a macro analyst and focus on executing our trading strategies to the best of our abilities. This is the path I usually choose, since my crystal ball has been broken since day one. No predicting, no thinking, just executing like a bloody robot, making money on the way up, down or sideways like actual traders.
Remember:
No one can see the future .
It’s not about being right, it’s about making money.
Keep it simple and focus on controlling what you actually can.
Don’t marry any trade, always manage risk!
Good luck out there and may the Gods of fortune give us another beautiful quarter to play with, sparing us the pain and misery of a prolonged bear market and giving wisdom to our leaders in handling the coming challenges.
Disclaimer: nothing here is financial advice, just a fellow trader meditating on his trading journey, sharing the lessons he learned and debating some personal opinions that are only that, opinions and nothing more.
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