Whales Go Cold, and That's Good!
Bitcoin Data Newsletter
Hello friends!
Bitcoin continues its sideways price action, and our space in crypto X couldn’t look anymore empty.
Posts, comments, and engagement of any kind any fizzled to crazy lows as people drop their crypto toy in boredom until it inevitably lights back up again.
Last week’s newsletter showcased the great break out that Bitcoin had experienced, price looked ripe for continuation, and I said it was most likely to see a retest of the top of the patterns that were broken to the upside. You can read the last Bitcoin Data Newsletter here.
Bitcoin did retest the top of the patterns, and then it continued to do so… and now it continues to continue. You get the point! Price action has squeezed to a minimum.
All eyes across crypto X are on a particular trend I have been sharing, and now price is retesting it.
We’re going to be looking at 2016 to find solace for the current short-term, as well as a metric showing whales… not buying, and why I think that’s a good thing.
Let’s go ahead and dive in!
This Newsletter Will Cover…
Short-Term Analysis - Trend Under Fire
Market Comments - Bears and Bulls Disappear
Long-Term Analysis - Whales Go Cold
Investor Psychology - Short and Long-Term Are Not Friends
Short Term Analysis
Trend Under Fire
Trend Comparison 2023 vs 2015 - 2016
I have been consistently comparing our current move with that of 2015 - 2016. Why? Well, they’re just so similar! Using long-term data I have found that the entire year of 2023 has lined up well with the first move out of the lows in 2015, which you can see displayed here.
There are different ways to view trends. In my opinion and experience, the more times a trend has been tested as support or resistance by candles or wicks, the more important it is.
I also think the longer it has existed increases its importance. You can view trends logarithmically or on a normal scale, but I have found log ones to be more important because most people viewing price will be in log. (This makes it easier to view price over long periods of time.) I am using logarithmic here.
Currently, the trend I see of most importance is being tested (recent retest on left). Each retest is labeled with an arrow. Price has created a new descending wedge (bullish) against the trend, and now we wait to see its reaction.
The loss of this trend may seem like the end of the world, but a quick look back at history quashes that. Almost all trends will end someday, or else they would continue to infinity up and to the right.
I think there is a better chance than not of the trend holding, given how important it is and the bullish pattern price is inside. But the point here is as you can see on the right, if it does break… it’s not the end of the world. Price broke three diagonal trends during the period of 2015 - 2016.
Sideways price action is common during early bull markets, and I continue to think that is what is most likely. At worst, I believe Bitcoin will continue to hold up the blue 140-day EMA (20WEMA) as support. That is currently at about $28,050.
Let’s be patient here and still hope for a trend hold. I still believe the next major move of thousands of dollars will be to the upside, in due time!
Market Comments
Bears and Bulls Disappear
Crypto X has gone almost completely silent! I have noticed this of both bears and bulls. Most people don’t seem to be very passionate about much of anything in terms of Bitcoin price.
I have been in periods like this before. One I remember vividly was the time period of April - October 2020… which now that I think about it has a very similar time frame to our current move…. an observation for another day!
I will display it here so you can see what I’m talking about:
Bitcoin April - October 2020
The halving took place in May then, which was a highly anticipated event. Nothing much came of it of course. A small pop and dissipation in price.
Then price squeezed to a bare minimum in volatility, wow was it boring! Very similar to now. Then price exploded to the upside with a nice big move and went flat… followed by another drop and more sideways price action.
If you think about it, the price action compares very closely to now. And I believe we are faced with the “1 Month” period before continuation.
The times that are least exciting in crypto almost always come before the most.
Long-Term Analysis
Whales Go Cold
Whale Accumulation Heat Map
The heat map for whale accumulation has started cool, and that I believe is a good thing!
The first thought may be that whales would be buying the dip, but time and time again we see the same pattern… whales buy the hype. You can see this clearly by the dark color shifts on huge upswings.
The areas of cool in bull markets, while not 100% precise have lined up in many cases with local lows. Unfortunately, we don’t have very extensive price data on this tool (it only stretches back early 2020), but from my observations it doesn’t seem that Bitcoin stays in low whale accumulation very long in bull markets.
I have reviewed other pieces of long-term data that seem to point to a similar conclusion, a local low may be forming. How long it will take to leave those lows is another question. September may be a good recovery month where price starts to turn around… and October is historically very bullish.
Whales aren’t buying, and I’m happy about that!
Investor Psychology
Short and Long-Term Are Not Friends
I have talked before about the secret to success. Long-term thinking and patience. I don’t just make this stuff up I promise! If there were another, better secret I would have found it.
I spent a ridiculous amount of time looking for the secret that I did not know in Bitcoin. Through many pitfalls I found it… and it is what I have given to you. Weather you choose to accept this or not will spark your own journey to find the truth… and it is a bloody path.
Sometimes I have to dig deep to find my secrets to success, because at this point it is mostly things of second nature. But there is one key that I believe will help you manage the fierce battle of fear and greed inside yourself. Stay away from short-term thinking! Trading, or anything that would require a reversal of a decision soon after you have made it.
How did I sell at 54k in April of 2021 and not fear missing out on further gains? Because I didn’t try to time the top precisely! Long-term data pointed that Bitcoin had topped, and then I sold. What happened afterwards did not matter because I made a good, informed decision. This automatically made it the right choice.
Now imagine if had tried to shift my profits to alts to try and time a secondary top, and then back to Bitcoin and so on… I would have been a trader, and likely entirely unsuccessful. I sold, and that was that. If I was to ever make another decision again it would be much later!
How did I buy at 16.5k when everyone said a recession was coming? Long-term data said to. I made the decision and I continue to stick to it! I will not touch a button again until it is time.
And I don’t trade on the side, ever! You will find a way to justify bringing your long-term holdings into the short-term. Especially if you start to win.
I think long-term, and nothing else. I don’t care if I miss a little gains, and I don’t care what happens after I make the choice! This is only as long as I made the best, most informed decision possible. Then you can look back as I do, and know you did the right thing.
That’s all for today’s Bitcoin Data Newsletter! I hope you enjoyed, if you did leave a like and any comments or questions you have for me.
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Have a wonderful week and I will see you next time!
Best wishes,
CryptoCon