Bitcoin looking madly bullish
Of course coming from me that means this resistance line at $45k is going to punk us hard in the short term and send us cratering back towards a bounce at $40k, but that's irrelevant. In the medium term, Bitcoin and crypto in general are bullish for many reasons.
From what I can tell, we basically got the perfect February and March bottom out that one would expect from an all time high at the end of the year 2021. Again, we aren't out of March yet, but April is upon us, and April is often a super safe month that's always going to be sideways or slightly up, which is the exact opposite of March (sideways or down).
- April 2021 we traded sideways at the top.
- April 2020 we were trading up after the COVID crash.
- April 2019 marked the foothills of a full-blown bull market.
- April 2018 was a massive dead-cat bounce up +50%.
- April 2017 was a slow grind up into the end-of-year MEGA-bubble.
- April 2016 was boring and slightly up.
- April 2015 traded sideways.
- April 2014 traded sideways at the bottom of a huge March dip.
April is legit never a bad trading month.
Again, most of the time it's sideways or slightly up; usually pretty boring. However, in the current context I would guess that it marks the beginning of another sweet bull market like it did in 2019. This is because Bitcoin has been on an 18 month cycle of bull markets since Summer 2016.
- Summer 2016
- Winter 2017
- Summer 2019
- Winter 2020
- Summer 2022
This also seems to line up with our relationship to the doubling curve.
2022 Bitcoin Doubling Curve
| Jan | Feb | Mar | April | May | June |
|---|---|---|---|---|---|
| $27733 | $29867 | $32,000 | $34133 | $36267 | $38400 |
| July | Aug | Sept | Oct | Nov | Dec |
|---|---|---|---|---|---|
| $40533 | $42667 | $44800 | $46933 | $49067 | $51200 |
After double bottoming at $35k twice, we appear to be in a damn good position over the next 3 months. I'm expecting some kind of peak in May or June, and hopefully I'll actually be able to DCA sell during that time so I can actually buy the dip in September for once. Making the plan is easy... sticking to the plan is not so easy. the FOMO is real.
World Economy
The biggest threat to the crypto market this year will be the legacy markets that crypto is correlated to when we trade higher than the curve. These sanctions against Russia hurt the entire world, not just Russia. Putin has demanded that "non-friendly" countries buy their oil with the Ruble, which is a huge slap in the face to USD hegemony and the entire concept of the Petrodollar (forcing countries to buy crude oil with USD). Already the Ruble has regained a ton of the ground it lost from the sanctions, and Europe is basically at the mercy of these exports, as their gas prices have always been sky high to begin with.
I've said it before and I'll say it again: the "V-shaped" recovery we made in the wake of the COVID crash March 2020 was a complete farce. We've been in a slow motion train-wreck ever since, and many of the supply-chain issues have not improved. With the FED raising rates to "combat inflation" there's a very real chance this entire house of cards falls over and we get hit with a wicked two year bear market. Honestly looking at the actions of world leaders... it's like they are doing it on purpose, but I won't trail off into conspiracy theory land.
Russia and Ukraine
All of a sudden both of these countries have a reason to use crypto. Just six months ago Putin was bashing Bitcoin saying it would never be used for something as important as the purchase of oil. Now they are openly talking about Bitcoin being an option. It's pretty wild on multiple levels.
Then we have Ukraine, that is accepting crypto donations to bolster the war effort, which again, is so crazy on so many levels I wouldn't even know where to begin.
The main takeaway here is that crypto is clearly coming front and center into the arena when the going gets tough. What we need to realize is that... once the infrastructure for crypto is in place, that infrastructure will exist... forever. Say five years down the line when there is no war and Russia isn't avoiding sanctions, it doesn't matter. The infrastructure built to incorporate crypto into the system will still be around, and in my opinion it can only gain adoption over time as it clearly has exponential value. People are going to want a piece of that pie no matter what's going on in the world.
Trying to tame the beast
Enterprise blockchain has basically been strapped at this point, and the next push for crypto dominance comes in the form of CBDC. Too little, too late, government. CBDCs are quite silly, and can only add value to real cryptocurrency. This is especially true when we see that individual cities and corporations are already booting up their own currencies. I'll tell you right now, I'd trust Jeff Bezos or Elon Musk before I'd trust politicians in control of a currency. I'd even trust Miami coin more than I'd trust FEDcoin. The cat is out of the bag, and currency is no longer something that the gatekeepers of this world can horde for themselves.
Conclusion
April is never a bad month, and we've just come off the tail end of a classic FEB/MARCH bottom out as we lead into a 18-month bull cycle. The market is looking pretty up up up, and as long as the legacy market doesn't implode in the next three months I'd say we are good.
That being said, the chance that we enter a real bear market for the first time since Bitcoin's inception is high. If we happen to get that bull market this summer, those who get greedy, FOMO in at the top, and don't take gains on the way up, are going to get WRECKED on the way down. It's not going to be pretty. Don't be surprised if this house of cards topples over at the end of the year.