When Bitcoin was riding high at $60k+, no one believed that it would even return to the doubling curve ($25k at the time) let alone back to 2017's all time high. I guess all them CME futures gaps ended up being filled after all. Oops.
The fact of the matter is that most people are running scared right now, but Bitcoin is comically oversold on almost every metric. Everyone brings up the 'fact' that Bitcoin crashes 85% after a bull market. Really? What about the bull market of summer 2019?
That was only a 52% crash. When we look at our most recent bull run in relation to the doubling curve trendline, we spiked above the curve pretty much exactly the same in 2020 and 2021 as we did in summer 2019. I was personally expecting at worst maybe a 55% dip from the top, which puts Bitcoin around $31000. That is a reasonable level that we should have been able to hold, but instead here we are clawing at the peak of 2017.
This actually really surprised me. I honestly thought all these businesses being built and all these billionaire CEOs jumping in were not falling victim to FOMO (except Michael Saylor of course). I thought they had balanced positions and were ready to buy the dip. I thought their business models were sound and could easily survive an 85% loss on BTC.
Look how many longs got squeezed. Look at how many exchanges and other custodial services have somehow gone insolvent. That shouldn't even be possible, but it was because they were all greedy as hell and leveraged up to their ears. That's fine when your investing your own money, but when you build an entire platform on top of that risky gamble? What the actual fuck is going on here?
I've been looking at the trading history of Bitcoin, and I've noticed that BTC has actually NEVER traded in this range for any significant period of time. Let's go check the charts, shall we?
Here we see that Bitcoin traded for about a month within this $17k-$20k range before popping off to $40k. However, that's a bit different, isn't it? During this time in Q4 2020, Bitcoin was essentially trading at all time highs, now the exact same range is a massive local low that's wiped out 18 months worth of gains and even more when counting leverage.
So again, this market has never been in a position like it's in right now, ever. Ever never ever. It's insane how oversold we are, flushing out all the garbage that isn't robust enough to handle the volatility. That's why I'm so grateful to be involved with Hive. Hive is so grizzled and should have died a thousand times over by now, but yet here we are. We know exactly how to survive in a crypto winter. As terrible as it is to say: Hive can crash another 75% and we'll still be totally fine. We've been in the gutter before and we've come out of it a more efficient and evolved machine.
Um, really?
The interest of the BIS in Bitcoin is particularly fascinating as it follows a strange pattern among global banks, which is to vocally criticize cryptocurrencies in the media while quietly investing millions or billions of dollars into crypto technology and infrastructure.
The sharks smell blood in the water, and here they are moving in and allowing huge amounts of money that was legally not allowed to be invested into Bitcoin... and look at that... now it is, right after the worst monthly candle Bitcoin has EVER posted in its 13 year trading history.
And people still think Bitcoin is going to crash to what? $10k? Ug, that's literally what they ALWAYS say. Every single time crypto crashes everyone says it's going to crash 50% more. Then if it crashes 50% more they say it will crash 50% more. I mean eventually you're guaranteed to be wrong using that strategy. Better to stick to the plan.
The plan was always to consider this range ($20k) a critical support and consolidation area of last resort. Now that we are here everyone is running scared, and that is par for the course. Legit happens every single time. This aint my first rodeo.
The real wildcard variable here is a looming recession that could hit everything like a ton of bricks. In my opinion, that is pretty much the only way Bitcoin crashes below this critical range that we've literally never consolidated in. But then looking as the worldwide adoption and infrastructure that we are seeing, it's still hard to imagine a recession hurting Bitcoin when it is already this chronically oversold.
At worst I'm somewhat expecting that we get a dead-bounce recovery and then a recession kicks in and stomps everything into the ground all over again. Crypto moves ten times faster than the legacy system. It crashes ten times harder and it recovers ten times better. The correlation between the two is rendered completely useless when looking at the timelines.
The one day correlation is stronger than the one week correlation, which is stronger than the one month correlation, which is stronger than the one year correlation. After ten years stocks have gone x2 and Bitcoin has gone x1000 and it becomes painfully obvious that the 'correlation' people are seeing doesn't mean anything whatsoever. There's no way to extract a profit from that data. It's a worthless trailing indicator of the past. I can't make money off of the knowledge that Bitcoin went x20 in 2017.
Everyone is expecting another fire but... there's very little left to be lit on fire. All the fuel is gone. Everything left already knows how to survive the winter.
Of course this is not useful day-trading advice (but then again, is anything?) The only way to increase our chances of winning this game are by playing the long-game. Certainly, if we had been selling the spikes this whole time, this might be a great time to go almost all in. Unfortunately, 99% of everyone didn't do that, so not really helpful in hindsight. Also everyone's situation is different, so there isn't really a one-size-fits-all strategy.
For example, I'm paying my bills with crypto at this point. That's a pretty huge variable to consider. If the market bleeds and I'm all in and have to pay bills, I basically get forced to sell the bottom. Not a very ideal situation, and also not everyone is in this situation. Good thing I have the tiniest footprint.
Big moves in the market take a while to adjust to. It wasn't that long ago that people were asking if it was a bad idea to sell Hive at $1.40, and even more recently Bitcoin at $30k. Now those questions seem like a distant memory. We've had a little bit of time to adjust to this new environment, which is still insanely volatile and unpredictable, but that's the name of the game.
The $15k to $20k range is one that Bitcoin has never even come close to consolidating in. We've only been at this level during all time highs and FOMO. Now resistance is flipping to support, and FOMO flipping to FUD. I guess that's all part of the journey.
It's unclear as to how long we'll be trading in this range, but the garbage is getting flushed down the toilet. The forest has been set aflame. We will see what survives and what regrows from the ashes.
Oh yeah also in my last post about Uganda finding more gold than exists in circulation...
Unsurprisingly that was totally fake if you didn't catch the memo. But the overarching themes are still completely relevant.
Gold will only ever be gold.
Crypto is alive and constantly evolving.
