My Thoughts on the Market - May 2024
Finally, we see some nice price action! It's been a while.
The bulls are back in town!
We’re going to keep this brief today. Just as things were starting to look really bad, the price of Bitcoin trapped the bears and reversed the trend. In all honesty, it’s too early to talk about a true reversal, but I’ll admit that things look much, much better today than they did just a few days ago.
What makes me bullish here for Bitcoin:
We had our fakeout to the downside. We hunted the stops, trapped the bears, and swam in the liquidity pool below our support. CHECK!
We then reversed strongly and successfully retested the support. It held and resulted in another pump. CHECK!
We printed another beautiful green candle on the daily time frame. CHECK!
We crossed the downranking trendline convincingly, thereby breaking the trend and changing the market structure. CHECK!
We also broke above 50 daily EMA and retested it. CHECK!
We had the perfect weekly support level retest, and the 21 weekly EMA has been kissed. It doesn’t get much better than this (see the image at the top). CHECK!
The bad news was replaced by good news in the form of significant Bitcoin holdings in various large banks, and even the ETF flows were positive for a change. CHECK!
If I were actively trading at the moment, this would have been a must-play buy for me. As it is, I’m going on vacation and will be absent for a few weeks, so leveraged trading is just not an option. As for spot, I’m fully allocated already.
With a bit of luck, this will be one of those “sit on your hands” spots where it’s best to just let it play out. It’s too soon to tell just yet, so keep it in your pants!
I am still cautious, though
The reason is that things were looking very weak on lower time frames just days ago, and this could be the real fakeout to the upside before we continue down toward 50,000 USD per Bitcoin.
At the moment, bulls are in control, but that can change instantly. I think we will get additional clarity in a week or so if the price manages to hold this level at the very least.
Having said that, if the trend has, in fact, reversed, we’re now entering the next phase of the bull market—the wild one that usually follows Bitcoin's Halving. If that's the case, this will be the time to press on the gas pedal and stick to long plays only.
My thesis for the bull market remains the same
This bull market will most likely be most comfortable and rewarding if you’re long:
Bitcoin
Meme coins
AI coins
I have not seen any worthy change in the market behavior to suggest otherwise.
Anyway, to sum up, if you’re not allocated, this is probably a good time to take on some additional risk, but be wary of the option that the reversal is a fakeout, and there is still some pain ahead.
In that case, it might be best to cut your long positions and sell your coins because I suspect that if we lose this level, we’ll be in for some tough summer months.
Until that happens, we’re long and strong!
Have a good weekend, everyone!