If you guys can't tell by the frequency, content, and mania of my posts I'm obviously on major tilt right now. I don't want to talk about this crazy market, but I just can't help myself. Also with all the other crazy things going on in the world I find myself in quite awkward positioning. What to do what to do.
Bitcoin Prediction
As far as the Bitcoin market is concerned, if indeed we are repeating what happened in Summer 2019 we should expect a 50% bounce after the 30% correction. Both happen within six 6h candles. Both of those things have happened. We've bounced back up exactly half way to the $36k level.
(42k + 30k)/2 = $36k
Now that we've hit $36k if we are indeed repeating the past, we should crash to around the $28k level in three days. I feel like $28500 is a good place to buy to slightly overbid the unit-bias.
Not to worry,
If this is indeed happening... that makes the market pretty predictable. We would crash down to the $28k level over the next three days or so, but from there we would rocket back up to near-all-time-highs.
This is the dead-cat-bounce that I've talked about many times. Looks like it could make it all the way to $40k resistance, and if not at least $39k or $38k. We are still 3 days from the potential crash to $28k though... and a full week away from the dead cat bounce after that (10 days total).
If this scenario actually plays out like clockwork (unlikely) that would put the peak of the dead-cat-bounce days after Biden takes office and everyone would likely be super hyped and be expecting a fresh run up to $50k or whatnot.
I remain skeptical.
Volume is back down to 50k from 100k and it seems like if the sharks really wanted to buy that much Bitcoin at these levels we would have rocketed up already... although they are using bots that are good at trading the markets and buying slow so who knows.
At these levels and volumes, it seems like anyone who wants to buy Bitcoin is being given the chance, and the sharks that bought low like Michael Saylor very well may be trading the market even though all indications were that sharks were buying and holding for the long term. Who knows, Bitcoin makes people crazy.
Perhaps it's a bit premature to declare this run over when we've only experienced a 30% retracement (something that happens to Bitcoin all the time during even mega-bull runs). It's very awkward positioning because we are in a mega-bubble year, but we started it off with a bull run, which has never happened before.
In 2017 everything was pretty much quiet until the summertime. We got good runs in both Q2 and Q3, both followed by 30% retracements. Then in Q4 everything went crazy and we got the blow-off top. Could this 30% retracement simply be a stepping-stone along the way to higher highs? Certainly, this could be the case, being in a mega bull run year.
However, I remain skeptical, as the 30% retracements we are used to happen over a long period of time (weeks/months). We got this one in 36 hours, which signals to me the market got a little too big for its britches and we trying to price in a mega-bull run a full 12-18 months in advance. The market does this all the time, and every time it tries, it fails. You can't price in future events and not expect a crash later when floating on air, even in the mega bubble year.
R.I.P Q1
Quarter one has always been bad for Bitcoin. The doubling curve is at $13k... that's how much Bitcoin is worth right now: $13k. I'm serious. Of course the mega-bubble can easily take us to x10+ but I just feel like we aren't there yet and this one needs to deflate as it normally would in any other year. In 2019, this took a full 3 months (1 quarter) to accomplish.
However, even if I'm right all we really have to do is wait and see what happens in Feb and March. If volatility and volume grind to a halt we can just selloff some at that time to avoid the incoming 30% retracement at the tail end of the dragon. Easy.
Very nervous
The Biden administration has the House and the Senate, and is in bed with the police-state and the Patriot Act during a time that we are trying to erect a facial recognition grid across the country (even being implemented by Amazon and other tech companies for a profit and paid for by citizens to avoid "packages getting stolen"). The people are paying for their own prison, and it seems like they are loving it. God bless Big Tech.
The left and the right have never been so divided (by design) and the right are being actively suppressed while experiencing major "delusions" of persecutions and grandeur. Trump seems to be the Messiah for some, and it's the weirdest damn thing I've ever seen... that guy? HIM? REALLY?
It is what it is.
Trump is now a prophet, and there are literally religious zealots on his side fighting for their lives against the Great Satan who oppresses them. It doesn't take a rocket scientist to see that the pot being stirred here is the classic recipe for terrorist activity in America.
What's worse: the Democrats WANT terrorism. They crave it, and they are trying to make it happen: on purpose. If terrorist acts scare the entire population into submission they can pass any law they want under the guise of security. 2021 gonna be batshit nuts guaranteed. The COVID scare isn't enough. They need even more reason, and they are going to get it one way or another.
And when I say "democrats want terrorism" I don't actually mean democrats. This is not a left vs right issue at all. This is imperialists vs obedient subjects. The Left vs Right paradigm only exists so that the children in their playpens continue to fight one another over stupid shit while the entire world gets abused horribly 1000 times over.
The Children's Table of Politics
They've got everyone worried about pronouns and abortion and gun control and racism and taxes and climate change and immigration... No one in charge actually gives a shit about these issues. They want more money and more power, plain and simple. That's it.
So now we are in a situation where the left has a lot of power, and I lean left so that benefits me... but for how long? I'm not looking forward to being forced into a vaccination, I can tell you that much.
Everyone thought 2020 was such a bad year. I laughed. It wasn't bad for me at all. Almost nothing changed for me. As an extreme introvert, I don't really have the same problems of these other people. The same will be true for 2021: I'll be just fine, sitting here watching everyone else freak out like, "What's the big deal? Is this too much for you?" If crypto does the thing I'll be even more prepared.
Potential banking crisis
Evictions are currently illegal (banks aren't getting their money). Velocity of money is dropping off a cliff. People are hoarding their money out of fear and this is causing deflation, which is very bad for a healthy economy. Even worse are those who are out of work and not earning any income or require the state's help for assistance. That's obviously a slippery slope that automation isn't doing any favors.
Legalized Theft: Who's Ready for Bank BAIL-INS?
Now I've been talking about bail-ins and the collapse of the banking sector for quite some time, but now that banks have permission to hold 0% reserves and negative interest rates, on top of being able to print stable-coins that aren't being backed by liquid reserves? Wow, we are closer to a disaster bank run than ever before.
Negative Reserve Banking & Stable Coin Mania
Unlike Airlines and other big businesses that are "too big to fail", people got mad the last time banks got bailed out by the FED, so they made it illegal. The next time a banking crisis occurs, they will haircut the money of citizen's bank accounts and force them to invest in the failed business. Isn't that cool?
I think the rules for this kind of thing might only affect people with a lot of money in their bank account, but who knows what laws will get passed by the Biden administration when they can greenlight anything and rush it through during the onslaught of emergencies that will pop up over the next four years. Who's ready for this New Normal to take shape? Gonna be LIT!
Conclusion
This Q1 transition period is an extremely risky time on all fronts. It might be best to avoid it entirely as far as crypto is concerned. A black-swan level event could happen at any time just like it did in March with COVID and everything immediately crashed 50%.
No analysts are predicting that Q1 or even Q2 would be the time period that Bitcoin Mega-bubbles. Might be safest to just exit the markets for a while, as we sit x2.7 higher than the doubling curve.
However, I do think there is a good chance that the dead-cat-bounce (or perhaps even full on bull market continuance) could proceed just days after Biden gets into office. After all, as I've said before, this is an unprecedented time in history and the markets will reflect that with completely unpredictably emotional trading.
Tread Carefully.
The only certainty is there will be volatility ahead,
in one direction or another.