BITCOIN ANALYSIS

BITCOIN ANALYSIS

By MattiaLion | Crypto markets | 18 Jun 2021


Crypto markets keep being strange lately, they are not moving as they used to in the last couple of months and this is due to some bad news that came out in the past few weeks. Today, I want to look at different charts that tell us different stories, and all of these stories will help us understand what is happening. 

DEATH CROSS

First of all, I want to concentrate on the recent death cross theory where basically the 50DMA will cross the 200DMA from above. Well as you can see in the image below we had other times where this death cross happened, but it didn't always signal a crash.

 

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In fact, as you can see the death crosse happened in march 2020 just before a big rally, before that, it happened around October 2019 where a correction followed, but if we go back to March 2018 when this death cross occurred the price of bitcoin rallied 40%. This is something that we have to carefully consider, why? Because, if the death cross will happen, and the price of bitcoin will start rising, we should start asking ourselves if this is just the pump that will set a significantly lower low, triggering the bear market. 

PI CYCLE TOP

Next Chart, the Pi Cycle Top indicator. This indicator tells us when the market top sets in. Well, it has been very precise. In fact, the two moving averages touched earlier this year, signaling a possible top of the market. Should this worry us? 

 

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Well, if you look at it from a short-term perspective, yes, but if you are willing to hold your bitcoins this could very well end up being a 2013 type of event. What do I mean? 

As you can see in 2013 the pi cycle top signaled the top of the market around April, after that signal the price of bitcoin corrected sharply, but, by the end of it was 5x higher than the previous ATH set in April. 

This time we see very high correlations with the 2013 market moves, and this could very well end up playing a similar pattern. The downside of it is that it took months for Bitcoin to get back to its previous ATH. 

BITCOIN WHALE

Next chart, crypto addresses with more than 1000 Bitcoin, Aka whales. 

As you can notice in the image below whales addresses did something very interesting. In fact, whales are the only ones that had this sharp fall of bitcoin holdings on their portfolio. And the interesting thing is, on May 8th, when the market selloff happened, they had already finished selling their bitcoins. 

After the crash, you see that they started accumulating a little bit again. More bitcoin at a cheaper price. 

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This image speaks to me very clearly, the crypto market is still very small, these whale have the power to move the market and they are accumulating bitcoin overtime at cheaper prices. These are professionals that know what they are doing, and as I explained in one of my previous articles, the institutional FOMO is very different than the retail one. 

They don't rush in pushing the prices higher, they do it quietly, trying to push the prices down to get a better entry point. there are always more whales since the creation of bitcoin and this trend will keep going as more companies come into this space. 

 

CONCLUSION

 

Bitcoin corrected sharply, whales sold their positions and it seems like if they are starting to come back. To me this is one of those situations where we should start DCA, a little bit every week. 

I believe that the price of bitcoin will reach new ATH, but I cannot say when it will. Right now we have to see if the 2013 pattern will play out, and if it will, 60k x 5 = 300k which is not bad. Plus, Plan B which is the creator of the stock-to-flow model, predicted a market top around 288k which is inline with the 2013 theory. 

Only time will tell, meanwhile, enjoy the ride

 

Matt

 

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MattiaLion
MattiaLion

Hi, my name is Mattia


Crypto markets
Crypto markets

In a crazy world where there is an immense volatility is good to have different perspective on what is going on, this is going to be exactly that. I am going to give you my personal opinions on what is going on and what I am personally doing to navigate these winding waters in the crypto market

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