Greetings fellow cryptonauts!
Regular readers may recognise the title of this post, it’s the spiritual successor to “Bitcoin: 25% of the Way to Nowhere – The Tale of 2021 – and Beyond…” the post I published on the final day of 2021.
I’m writing this post for two reasons:
The first is that there is some crypto blood in the streets. To the OGs of the crypto world, this is nothing. We’ve seen it before, we’ve seen far worse before! But to the newer guys and girls, this is probably unsettling and a little frightening. I aim to show those newer people what’s happening and to try to calm their nerves a little.
The second is that I want to show everyone where we are on the charts - to update that “25% of the way” post and to let you all see for yourselves just what Bitcoin is doing in the eyes of a Bitcoin analyst. I’m not going to waste time, let’s jump straight into it.
25%
From: “Bitcoin: 25% of the Way to Nowhere – The Tale of 2021 – and Beyond…"
That’s the exact chart I published in “Bitcoin: 25% of the Way to Nowhere – The Tale of 2021 – and Beyond…”. It’s nice because it’s a simple chart to read, you don’t have to be a pro to understand what’s going on.
To recap: the chart shows the general Bitcoin trend since early 2013. And if you want to know why that trend exists, then check my recent post discussing that particular topic: “Must the price of Bitcoin continue to rise like in the past?”
Of particular significance is the “25%" part. The 25% line is where the price was sitting on 31 December: 25% of the way up the long-term channel (on a logarithmic chart). As you can see from the title of today’s post, we’re no longer there (thank you Captain Obvious). In fact, BTC is only about half as high up the channel as it was three weeks ago.
That’s a significant loss, but by no means “huge” or even “bearish” in crypto terms. This statement from “25%...” perfectly captures my current thoughts and feelings on the market:
“We’re 25% of the way up. Should we fall back down to 0%, the default absolutely-no-hype-in-the-market state, then the fall will not be so bad. Should such a “crash” occur today, then it would see Bitcoin prices return to a level equal to that of the previous market peak – about $20 000. As worst-case scenarios go, I’ll take that with glee!”
And that’s what I am now: gleeful. The price of Bitcoin is operating well within predicted ranges, and there is absolutely nothing to worry about, let alone to panic about!
12.5%
Look: I would also LOVE to be holding $300k+ BTC in a bull run right now. A year ago, I expected to be there by now. But we aren’t, and that’s okay! Nothing broke, nothing went wrong - crypto is just being crypto - this is what it does.
When markets lose faith, they dump. They suffer from fears, uncertainty and doubt, and they sell valuable assets at ridiculously low prices. It’s short-term thinking, it’s stupid thinking, but it happens. And because people are herd animals, when a few flee, others follow. And once an appreciable fraction of the herd starts to flee, then the WHOLE herd follows!
But remember this Bit Brainites: for every seller out there, for every single satoshi of BTC sold, THERE HAD TO BE A BUYER!
SOMEBODY bought all this cheap Bitcoin flooding the market, and what a bargain they got! I myself picked up some $42k Bitcoin this week, if only I had waited a day or two more!
At times like this, wealth transfers from inexperienced new hands to more experienced old hands. This is good, because the older and more experienced the hands are, the stronger they are. Old hands don’t panic-sell. Old hands don’t sell hard assets at discount prices. Old hands HODL!
Sadly (due to their terms of use) I can’t share these charts directly, but if you visit https://www.lookintobitcoin.com , you can verify this information yourself: (click and drag on the charts to zoom in).
- Hodlers are hodling - the longer they’ve hodled, the less likely they are to sell: https://www.lookintobitcoin.com/charts/hodl-waves/
- Whales aren’t selling: https://www.lookintobitcoin.com/charts/whale-watching/
- And if you scroll through the different Bitcoin wallets by size, you’ll see that even the >1 BTC wallets are holding https://www.lookintobitcoin.com/charts/wallets-greater-than-1-btc/
So here we sit at 12.5%. Consolidating. Moving BTC from the hands of the weak to the hands of the strong.
What’s next?
Where will we go from here? It’s difficult to say. We could go up again, but such a bounce is probably unlikely in a market which is so obviously fearful at the moment, which is overemphasising Russia FUD and which has been trending downwards for a good few months now.
We could go down some more, but there’s not a whole lot of down space left down there: only about 12.5% or $10k until we hit the base long-term trendline. So don’t fear a bear market, because we don’t even have enough room left for a bear market, it's not really a possibility.
A more likely scenario is that it’s time to go sideways again. It is likely that the market will now cruise along at roughly this price for several months. It could dip to $25k, and it may well do so. It could spike upwards to $50k. I believe it will remain fairly constant and with low levels of hype - bouncing along slightly above the lower limit of the trendlines.
Obviously this is just one possibility. Crypto is a capricious mistress at the best of times, anything can happen! However, this is a scenario which I consider to be both realistic and likely, given the current circumstances. If circumstances change, then who knows? Or maybe I'm just completely wrong, that happens sometimes, it may be happening right now. Perhaps this is just a bump in the road to a huge climb - I don't think it is, but it could be.
Conclusion
That’s it, that’s all I came here to say. Please guys and lady-guys, DON’T DO ANYTHING SILLY! There is no need to panic, there is nothing to fear. I’m fine, bitcoin is fine, you’re fine. Believe in the the fundamentals and hodl on.
Bitcoin WILL rise again!
Yours in crypto
Bit Brain
All charts made by Bit Brain with TradingView
"The secret to success: find out where people are going and get there first"
~ Mark Twain
"Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful"
~ Bit Brain
Bit Brain recommends:
Crypto Exchanges:
