Four Bitcoin ETFs could be just around the corner as the SEC signals that approval could come as early as November this year. Meanwhile, here are two technical data points to watch out for as Bitcoin heads towards 6-figures.
Let’s dig in.
After years of waiting for a US-based Bitcoin Exchange Traded Fund (ETF), the crypto community might finally get its hands on four mainstream financial products by the end of the month.
Check out the full article here!
Bitcoin has set a precedent to continue the bull market towards all-time highs, potentially completing the 5th and final explosive leg up by the end of Q4.
Since the last newsletter, BTC/USD has chopped in between $53,000 and $57,000 — having reached the upper limit of the resistance zone this morning.
Still, bitcoin continues to demonstrate strength as buyers step in, with over 80% of the circulating BTC supply being Hodled. This changes the dynamic for forward-looking investors who must now be aware of two things:
- Funding rates
- Common bull market projection models
From this point on, investors should take my analysis with a grain of salt. After all, nobody can see the future; all we can do is have the courage to act on our convictions using the tools at hand.
With that out of the way, let’s consider the charts.
Taking recent history into account, Bitmex Funding rate spikes in either direction have marked both the all time high ($64,900) and the bottom ($28,800), with 0.27% connoting prices nearly 10% away from ATHs, and -0.025% denoting the bottom within a 4.4% margin of error. That’s quite accurate. While history is no guarantee, taking profits as funding rates spiral out of control has historical precedent behind it.
Nevertheless, it’s worth considering other popular projection models for the BTC bull market. If Bitcoin is within the 5th wave of a five-wave macrostructure (per Elliott wave theory), then the wave will also contain 5 structures within it (per the model). In that case, it’s likely that BTC/USD is within the third impulsive move higher at the time of writing. Technically, the third wave tends to have the largest expansion in percentage terms and is followed by a corrective ABC corrective pattern before the final blow-off top.
Considering these two data points, taking profit on levered trades before a potential ABC correction (to reload lower) while keeping spot bitcoin to offload above the 6-figure mark seems like the smartest play.
Needless to say, maintaining a portion of funds in a ‘hodl’ portfolio is an important play. However, you’d be forgiven if the prospect of another 80%-90% drawdown isn’t all too enticing, even though I do not believe this will happen again (because macro volatility will reduce after the supercycle). Still, picking up BTC at a 55%-65% discount from all-time highs wouldn’t be a bad deal in preparation for when Bitcoin inevitably reaches $1 million later this decade.
If the Bitcoin super-cycle is in play, the main cryptocurrency will steal the show. The whole market will be laser-focused on Bitcoin as this asset becomes officially recognized. Litecoin will be a major beneficiary of the super-cycle, potentially more so than Ethereum, simply because of its relatively small market cap and its strong relationship with Bitcoin both fundamentally and narrative-wise.
What does mainstream BTC recognition look like?
- A public understanding of basic money concepts that inherently recognize scarcity as an eminently desirable trait for good money.
- US Bitcoin ETF approvals cement regulatory clarity and acceptance and evoke greater awareness of traditional Ponzi schemes that pass for modern economics (under the guise of modern monetary theory).
- At a 6-figure valuation, all anti-bitcoin narratives will be quite literally put to the sword, marking a point of no return in the way bitcoin is perceived and therefore traded.
- Macro volatility to either side would be relatively reduced after the supercycle plays out (if it plays out).
- Today, mainstream consensus dictates exposure to the US stock market. In the Bitcoin standard, mainstream consensus will require exposure to bitcoin.
That said, altcoins like Ethereum would still perform well in fiat terms, but in all likelihood, capital flows would be dictated by bitcoin. After Bitcoin sets a new all-time high, then capital tends to rotate into altcoins, with ETH/USD and LTC/USD being among the first major beneficiaries.
The 0.051 and 0.037 Satoshi levels above provide interesting swing trade opportunities (respectively) for ETH/BTC that would be confluent with both a bitcoin supercycle and standard capital flows in the cryptoverse.
These are my targets for the crypto bull market.
When the curtains close and the game of musical chairs is over, however, investors will want to be positioned in stablecoins and bitcoin. After all, every end marks a new beginning, and the bear market that eventually follows would be a time to accumulate and build the bitcoin economy.
Catch you later.
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