Re <<Prediction June 30, gold 1850, silver 27.50, Bitcoin 72000.>>
macro looks supportive and sentiment remains positive, therefore all seems good-enough
according to Willy Woo youtube.com down under where MQ used to live
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#forecast 016 : Intermission
Dear subscribers,
Welcome to The Bitcoin Forecast #016.
My last letter came at a time when the market was in a bearish stance while capital flows into the network were accelerating. The giveaway title of “buying the dip” called for a bottom reversal and a retest of all-time-highs within 2-3 weeks. Now 2.5 weeks later, Bitcoin has completed its retest of the $61k ceiling and is currently hovering slightly below.
Top level summary for 11th April 2021 (current price $58.9k):
· Short term: Long term buyers continue to accumulate, buying each dip, while price consolidates. The most probable outcome is continued sideways price action, followed by a strong bullish break of the $61k ceiling. This could be at anytime within the next 2 weeks.
Short term speculators continue to FOMO into long positions at every price high presenting lucrative opportunities for the market to counter trade them, it’s likely that we need a window where long positions are not in demand before price can break the all-time-high ceiling.
· Long term: Miners have surpassed their prior 2017 highs in revenue. This marks a kind of halfway point in the Bitcoin bull run. It’s “intermission” time. Bull market top continues to point to a target above $300k.
All the best, till next time.
-Willy Woo
Analysis Breakdown
Price consolidates while accumulation from long term investors continueThe last 3 weeks has seen consistent bullish flows of coins being bought and moved off spot exchanges.
Note: This chart corrects for a false-positive large withdrawal from Bitstamp on 6th April, this was determined to be an internal transfer.
These coins are moving to long term holders with little history of selling as marked by red bars in the chart below.
Ultimately we’re in a very large sideways band of consolidation while coins continue to be accumulated with every dip being snapped up by long term investors. If this pattern continues, it’s only a matter of time before the resistance band breaks and price explores new highs.
Funding rates continue to punish early speculator FOMO
While price action is in its current sideways consolidation, I’ll mention that each approach we’ve had towards all-time-highs has brought with it retail speculators FOMO-ing into long positions. Each time this has caused a price rejection, as it’s very lucrative to counter trade the long positions. We can see this in the chart below which tracks the cost of funding a long position.
Glassnode: live chart
It’s likely in my opinion that rates will normalise down to lower levels before we ultimately see a break of the $61k all-time-high. That’s assuming Elon Musk doesn’t tweet something bullish on Bitcoin, or any other similar event.
Price floor update
Here’s an update on the estimated price floor. We’re presently at $48.7k for the floor price. The floor has been consistently climbing as new capital enters the network, while price is trapped under the all-time-high ceiling. This has resulted in a cooling off of the overheat-o-meter. While there’s some downside risk, overall, we’re near local lows of speculative overheat.
“Floor Price” is an estimation of the minimum price that Bitcoin can drop to under current capital flows into the Bitcoin network, while the Overheat-o-meter is simply how high the traded price is above the floor.
Macro: A miners roadmap to where we areWhile we’re waiting for consolidation to complete, it’s timely to revisit the longer term macro cycle and get a read on where we sit inside of it.
Miners are now surpassing peak revenues last seen in at the top of the 2017 bull market. Historically, when miners pass prior all-time-highs in revenue, price goes through a very strong consolidation band marking a kind of “halfway point” in the bull run. |
