To Lower High, Or Not To?

Bitcoin Data Newsletter

Oct 03, 2023

Hello everyone!

October is just getting started, a historically very bullish month for Bitcoin. Will this time be different as it was for September?

So far we’ve seen a small, but very powerful push right as October began, but also a cool down afterwards.

Maybe, we’ve gotten too accustomed to the big green candles that launch us right to the next local high?

In today’s newsletter we’ll be taking a look at the charts to try and determine if this is all just a fake move, or one that can hold up.

We’ll be taking a look at the shorter-term, my thoughts on the market, and piece of long-term data to get the whole picture.

Also to finish up, we’ll be talking about a critical aspect of investor psychology, decisiveness. Without it, you are just a feather in the wind.

It’s time to answer the question, “Lower High or Not?”

Let’s dive in!

This Newsletter Will Cover…

Short-Term Thoughts - An Uncommon 2020 Comparison
Market Comments - Conflicting Thoughts
Long-Term Analysis - The Grand Scheme
Investor Psychology - Do Something, and Stick to It!

Short-Term Thoughts

An Uncommon 2020 Comparison

I have seen seen many comparisons of now to 2019, but very few to 2020.

This is probably because of course we were at a different part of the cycle, but the market structure here has been, and continues to be too similar to ignore.

I see the main moves up, marked by 2, 4 and 6. The corrections from those highs: 3, 5 and 7.

Both high points (4, and 6) had a distributive pattern, this is where price goes sideways near the highs outlined in the green boxes.

Just take a look at the moves to the highs labeled 6! Many similarities. a sharp incline directly to distribution, followed by a near immediate drop to 7.

If correct, we are now at 8, a point where Bitcoin broke the downtrend, took a pause, and then explored new highs.

This isn’t to say we start the major bull run from here like we did in 2020, but does look to point to price continuing.

Could this time be different? Sure, it’s just a fractal. We do not know where the failure point will be. But accuracy so far has been phenomenal.

Later we’ll take a look at a long-term piece to get an even better understanding.

Market Comments

Conflicting Thoughts

There is a complete mix of opinions of what happens next for Bitcoin, I would say most people seem to just be spectating and sticking to their original ideas whatever side that may be on.

Personally, I have noticed that many are starting to adopt a more bullish tone. This isn’t a bad thing per se. Remember we’re talking about analysts on X, not the masses.

Comments on posts have been much more positive, another sign things are shifting optimistic. I haven’t heard the usual recession fears spouted as much, or calls for 21 - 23k in the comments. These were very popular when Bitcoin was hovering around the lows.

2019 is fresh on the mind, just like the thumbnail shows:

Same time frame, October in our relative position last cycle. No wonder it’s such a popular thought.

But take a look at just how steep the run up was to the cycle mid-top at 14k in 2019, completely parabolic!

Our current move while has had some large swings to the upside, has been much more methodical, with much larger and drawn out pull backs.

This is yet another reason why I believe it is not necessary to visit prices like 21 - 23k.

The biggest thing that I don’t like, is the double retest of the same support. Frankly, we haven’t seen something like this before. This makes it hard to determine whether the market structure is bearish or not.

If lower prices come, it is a buying opportunity for long-term thinkers, and that’s that.

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Let’s take a look at our long-term piece!

Long-Term Analysis

The Grande Scheme

This moving average is a measure of the average purchase cost of short-term Bitcoin holders, likely 180 days or less but not specified on Chain Exposed.

This moving average has offered critical support to bullish price action, similar to the 20 Week Exponential Moving Average which you may have seen me mention.

Here I have circled all of the instances where price broke below outside of the bear market downtrend.

I wanted to show you this, because it is probably the best bearish argument there is currently. Price is retesting this moving average as resistance so far.

I think it is critically important that we get above and maintain the line. 2019 had a similar movement, where it then rejected and formed more lows for the year.

The good news is that the examples I have shown here almost always are able to reclaim the line after one move below. (mind you there is only 4 other data points though).

The main reason I think we may not see a move lower is because we retested the MA as support twice in 2023, unlike 2019, but the fact remains… we need to get above this line, and fast.

Investor Psychology

Do Something, and Stick to It!

This newsletter we’re going to talk about decisiveness.

It’s one of the most important skills in life. Nothing is worse than not being able to decide. If you cannot make a choice, I promise you that you will go nowhere.

How long does it take you to pick out a snack at the store? Do you talk about what you’re going to do, or do you actually do it?

Are you wishy washy, or do you follow through? People will remember this.

Why does this matter?

How can you ever expect to profit if you cannot stick to a decision? When it is time to decide, how can you profit if you don’t act? (Buy/Sell).

The grass will always look greener on the other side, you must stay with your choices and resist the urge to jump on whatever is new and exciting.

I sometimes get asked the question, “How did you not worry about price running up after you sold at 54k in April 2021?”

Believe it or not, I actually had to think about this the first time I was asked. It just makes sense to me. Obviously because I sold, why would I change my mind?

But the answer is decisiveness. I follow through. I made my choice, I knew it was good and informed, and even though I didn’t know that would be the top then for sure, it didn’t matter.

I committed to my decision and didn’t look back.

Here’s how you can practice decisiveness in your life, I have done the same for myself:

Start out small, it’s the little things. What to wear, what to eat, what to do. Tiny decisions like I mentioned earlier, picking out a snack at the grocery store. Give yourself a small time limit, and by the end of it, have something in hand.

Eventually, you’ll come across larger decisions. It’s ok to take more time with these especially if they are very important. But do just that, decide. Don’t put it off.

In all of these choices, stick to them, no matter what. It’s ok if you choose wrongly. Next time, you will remember! Then you can do better.

Be a person of your word. If you say you will do something, try your absolute best to make sure it gets done. I’ve found this to be a very rare quality in the world to the point where I expect people to never follow through. Sad I think.

I am sure your personal and financial life will improve if you implement these tactics.

Thanks for reading this edition of the Bitcoin Data Newsletter. Be sure to leave a like if you enjoyed!

I hope you all have an amazing week, and I will see you next time.

Best wishes,

CryptoCon