Bitcoin Turns Around!
Bitcoin Data Newsletter
Hello everyone!
Previously, the way I have structured the Bitcoin Data Newsletter is a monthly issue, with recently the addition of Data Bites. The Bitcoin Data Newsletter has focused more on investor phycology like the dangers of trading and developing a profitable mindset.
To streamline the process, I have decided to combine the Bitcoin Data Newsletter and Data Bites by giving you everything that is in Data Bites, and an additional investor psychology portion to train your mind to succeed.
This way you get something every week! So, welcome to the new Bitcoin Data Newsletter!
In the last Data Bites, we talked about the oversold bullish divergence that was forming on the RSI. I said that because of this, Bitcoin could be creating a turnaround point. You can read that here.
That divergence briefly played out, followed by a swift rejection. Fortunately though, Bitcoin did not make any new lows and has since started to see quite an uptick!
We’ll be sure to see if this is a move that can be sustained, or if more rejection is on the cards.
Here are some questions we will answer in this newsletter:
Is this another fluke rise? (short-term analysis)
Are bears finally done? (market comments)
What comes next for Bitcoin? (Long-Term Piece)
And then for our new section addition to the newsletter, investor psychology. Be sure to stick around and read to the end! Even with all of the right information you can never be profitable without the right mindset.
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Let’s jump in into today’s Bitcoin Data Newsletter!
This Newsletter Will Cover…
Short-Term Analysis - Is this a fluke?
Market Comments - Bears reach a tipping point
Long-Term Analysis - A retest, and a decision
Investor Psychology - The P word
Short Term Analysis
Is this a fluke?
As I said earlier, last newsletter we were focusing on the 4hr oversold bullish divergence that was forming. These can be great short-term signals although not 100% effective.
I suspect many have caught onto these as they have gained popularity in the crypto space. With all eyes on the same signal they can sometimes not be as reliable. Regardless, when looking for a turnaround point in price I believe they are very helpful along with some other clues.
Let’s take a look at our current situation to see if it’s likely that price can continue this nice uptick its started:
4HR
I know there’s a lot going on here, so just bear with me and I will make sure you understand it!
This newsletter I wanted to focus more on market structure and patterns rather than indicators.
Last Data Bites, I underlined a trend. This was the preferred trend shown here in black. I have chosen to label it this way because it saw many more retests than the absolute trend. I have highlighted each retest of the line in green.
The absolute trend is in red, made up of the two lowest points marked by red arrows. This is absolute last line of bullish defense; a break of this trend would call for a much larger breakdown.
Price is reacting very nicely to the retest of the preferred trend! This is where things get dense and it starts to look like a laser light show, but I just had to put all of my thoughts here!
Price is currently inside not 1, but 2 continuation patterns. The first is a descending wedge, the second a bull flag. The top of the wedge is marked (1), and the flag (2).
You can also see where this pattern played out nicely for price after the touch of the absolute trend at just below 25k in June. Price retested the wedge and made the huge surge (purple) to new yearly highs.
So, to answer the question, is it more likely price continues? Eventually, yes! What you would like to see for this to happen soon is a retest of the top of either one of the patterns shown, or just a blow straight through. Preferably though the former (retest), because this will give price an even better chance to continue on a longer stretch.
Then we get to the resistance… 31k. Like a wall that just doesn’t quit. This resistance is key to overcome for the next large leap (many 1000’s of dollars) up in price.
Sideways price action is most likely at this point in the cycle, so it would not be surprising if that takes some time still to achieve.
Things are looking better than not for continuation! If price breaks to the upside of these patterns, I think more of it is to come. For now, price wrestles with the top of the bull flag specifically.
Market Comments
Bears reach a tipping point
Bearish people have been quite vocal about their… bearishness. The recession calling specifically has been relentless, something why I’m not sure has decided to resurface.
I also recall a popular X account stating, “Where would the money come from?”
Trust me, money will appear from thin air when people get excited about something. If there is money to be made and greed is surfaced, people will have no problem scraping up some dollars to get in on the latest Bitcoin pump. I think to ask where the money will come from is a very poor argument to why price should go lower.
Strangely, 12k comments on posts I observed seemed to have had a ramp up as well even some saying to 0, which is really baffling! Sure, you can make the connection when Bitcoin is at 15.5k, but at almost 30k?
Anyways… all of this to say I think bears have reached a tipping point. There’s only so bearish the community can get before the market proves them wrong.
And as far as sentiment goes, I think that’s completely bottomed out, and if I'm observing correctly, it means it only gets better from here.
Long-Term Analysis
A Retest and a Decision
Short-Term Holder MVRV
MVRV is Market Value to Realized Value. This is the relationship of marketcap (the amount of money in Bitcoin) and realized price (average purchase cost of Bitcoin.
Comparing the two can show us when holders are in more profit or loss compared to when they bought.
This particular MVRV is short-term. This would be measuring the average purchase cost of holders that don’t hold their coins for very long.
Currently, the metric is retesting what I have labeled as the Early Bull Market Retest Line. You can see why I have labeled this way when you look at the retest examples boxed in green.
A recent retest of this line occurred in June of this year during the 25k lows when the SEC was suing Coinbase and Binance. We are now making a second retest of the line. This is commonplace for early bull markets, to retest multiple times. However, from the examples I’ve noticed it is most common to see two retests only. This means there is a high likelihood of continuing from this point!
There was one signal that did not come in the early bull market which was right before the 2021 top.
The other part of this observation are the downtrends created by the topmost data points. When price made the highs at 31k in April of this year, it touched the top of the very important trend, but I believe it is only a matter of time before it is broken to the upside.
I made sure to outline another trend, a little further back. These downtrends are not invincible and bound to be broken at some point down the line. The break of the first trend is circled in purple, where price did find some resistance but then went on to form the cycle top in 2017.
The next move will probably break our current downtrend to the upside. Things are looking good for Bitcoin on both the short and long-term!
Investor Psychology
The P word
Now listen… I’m not a licensed psychologist, but I have dedicated my existence to working on my own mind. I think you’ll find the things I share encourage you to be a better person, and subsequently a better investor.
Patience.
We all say we should have more of it, but how often do our actions reflect that we actually desire that? Probably not often if you were to take an honest look at your life.
Patience at work, patience with your family, patience with others, patience to get what you want. These things are hard, especially when things don’t go your way.
At work you may feel that others are not working fast enough, or that you could do things better, but how often do you take the time to teach and show them why the work they are doing is important and give them the skills to do it?
Your family is demanding, significant others, parents and children have needs to be met and you are at the center of it all. Do you find yourself getting angry when you shouldn’t?
Other people are always in your way. Don’t they know you have somewhere important to be?! Or maybe, is it just that you should have better time management, or just know when it’s time to wait.
We all have goals in life. The path to get them will not always go as planned. The bigger the goal the more time it will take to achieve it. One of the best tactics I have learned to accomplishing a big goal is to take it in small steps. Separate yourself from the overall goal and focus on things that are achievable in the shorter-term. Do these enough times and you’ll find you’ve taken enough bites to eat the elephant.
All this to say, you will not achieve overnight riches in crypto. There is no special secret you do not know. The key to making money that you can keep is making a few very informed decisions, and being plain old, boring, patient.
Once I learned this, it felt like the veil was lifted. You can have anything you want as long as you make the correct actions and are patient for the outcome.
Try practicing this in your life! Everyone around you will be grateful for it, and you’ll win in the process.
Thanks for reading this edition of the Bitcoin Data Newsletter!
If you enjoyed be sure to like the post and I will see you right here next week!
Best Wishes,
CryptoCon
Loved the motivational part! Great work.
good take, thank you!