Thu. Feb 29th, 2024
Bitcoin grows at the rate of global awareness and with the frequency of 4 year breaths (2 year exhale, 2 year inhale), and trading this is a game of patience. My doge and cardano ideas were playing out well, so I thought I’d share my vision for bitcoin for the remainder of this cycle. I’ve been reluctant to post this bc my BTC chart gets convoluted, but I’ve cleaned it up for this publish.

The Red/Yellow/Green Lines.

These lines create a channel that represents the general price range during the accumulation and eventual mania phase. Any extension toward the red or green bounds would represent sell/buy opportunities. I was confident with 15.5k being the bottom given in 2014 we saw an 87% peak-to-low retracement, in 2018 an 84% retracement, and in 2022 a 77% retracement providing high confidence for a bottom given diminishing returns as the market cap continues to grow. The lowest grey line serves as a worst case scenario bottom.

The Blue Line.

The blue line I deemed to be a magnet. In the prior cycle the price consolidated at this line 5 times, which was the best regression line I could fit. Extending into today, we’ve touched this line 3 times. With how ugly the macro situation looks with bonds having been nuked, and the S&P beginning it’s freefall, I do still contend it is likely we’ll see 25k prices again.

The Halving.

In retrospect, it made sense to be 100% all into crypto about 2 months before the halving and I have no reason to change this thesis. This is why I chose my DCA ‘x’ to allow me to DCA weekly until the end of Feb 2024. If deep value prices cause me to be all in before then, due to a recession for instance, so be it.

Orange Prior Cycle Pattern Overlay.

I overlaid the ghost pattern of the prior accumulation phase to better understand just how long we may spend in price range 20k-35k. Even after the halving in 2020, the price was no higher than it was a year before, which means by 6/2024, we could potentially still be at a 35k price level or even lower. This helps with taking profits at current levels.

The White Channel.

The upward sloping white channel shows the current trend, presenting buying opps near the lower bound. However, I expect this channel to break at some point to revisit our blue, magnet line.

When 69k again?

In the prior cycle it took about 154 weeks to reclaim $19.5k again. If this were to repeat, we could expect to see 69k again by November of 2024. I’ve connected this point on the chart with a faint grey line to that of the 15.5k bottom. The further below this line we get, the better risk/reward proposition btc price poses.

When next cycle top?

Since 2021 led to a double top, we have two timeframes to consider. The 2017 peak to April AND November of 2021. Using the most conservative and liberal ranges, we can create a window where we can expect the high to be, which could be as early as September 2024 to as late as September 2025. Personally, I believe the next top will occur sometime in 2025, which is more consistent with prior cycles and the 4 year theory, with an expected top between 90k-120k due to further diminishing returns (about a 6-8x from the 15k bottom).

Buy/Sell?

I sold 2/3 of my bag at 34k, and plan to DCA back in under 32k using the strategy in the chart. For selling, I’m really only willing to take profits at this accumulation stage if 1) we break into a new local high price range and 2) if the daily 200 day RSI is above 70 with the 200 weekly RSI above 60. All of these signals have occurred this week 🙂

Altcoins?

I’ve begun to DCA only doge under .065 and cardano under .25. I chose these 2 because besides ethereum, only these 2 coins have came back stronger in their 2nd cycle (If I’m missing any PLEASE let me know). I’m waiting on ethereum because the ETHBTC valuation still remains elevated compared to dogebtc and adabtc, which are down >85%. My eventual allocation plan is to be 30% BTC, 40% ETH, and 30% select alts when closer to the halving.

General comments:

This recent surge in BTC appears to be due to liquidity flowing from the altcoin market to bitcoin. This is evidenced by the bitcoin dominance growing higher all year, and demonstrated by TOTAL (crypto total market cap) having been range bound and NOT putting in meaningful new highs this year.

With the treasury yield curve uninverting, bonds crushed, S&P breaking, and government spending never ending, elevated inflation, higher for longer interest rates… it appears very likely we’ll slip into a recession in the coming months and the Fed will pivot earlier than expected.

Remember, never buy into FOMO. Only buy dips before the halving. I will update this idea as new developments arise. Happy trading.

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