So, this is a market update. I have three key pieces of information when it comes to trading Bitcoin and crypto right now in terms of where we are in the cycle and how we can go ahead and trade, so I’m just going to get right into those three pieces right here. However, people should rest while robots earn money, and the Jet-Bot crypto currency trading platform is the best tool for this aim. All the deals of the best traders will be copied automatically. You may get notifications about earnings of 200% up to 2,000% APY on Telegram. Get your crypto passive income right now.
Bitcoin BTC analysis
First let’s look at the Bitcoin chart. I’m going to talk about Bitcoin versus Ethereum as well, because it’s really interesting to see how that is playing out. What you can see for the last 18 months or so is essentially a huge consolidation in the price of Bitcoin after the big move that we had when money printing started, we’re kind of at the end of 20 going into 2021. What we’ve really seen now is just this price level between 30 and 70, and then obviously the tops here at 70. Now that’s a big amount in terms of percentage terms, but you can very clearly see the lines that I’ve drawn here are essentially showing us a huge consolidation for this period.
We’re at the bottom end of it now, even considering what has been the absolute worst performance in a generation in terms of the stock market, but what we can see during this time is one of the worst stock market performances in living memory. We see here that Bitcoin is actually still just at the bottom of this consolidation range. It’s an interesting piece of data here. You know, we’re at $30,000, which is pretty good. This bottom line is just huge, huge support, so you would expect it to really trade around this level for a while before potentially trying to move further forward unless we get some really awful economic results that will push it further. If it does break this 30K support, which we’re at the moment, we’re looking at this level down here around $25,000. It is not out of the question because I want to show you the chart as well, which is essentially Bitcoin since inception.
This is a weekly chart, so each candlestick is a week, what you see is just one of the most incredible charts ever. This, for me, is essentially just a pure uptrend. This is a log scale. What you’re seeing is obviously very low prices for Bitcoin at the left, and obviously towards the top, the price movements are getting compressed. It’s a log scale.
What I want to highlight here is essentially the three or four occasions where we’ve been at this tip, this kind of price point before, and what you can see is down here in the 20, you know, 15 or 16 area, where we come down to this black line, which is the 200 period moving average. It’s a 200-week moving average because we’re looking at the weekly chart and that was an incredible buying opportunity. You got the blow off the top, and then you got the kind of sell-off back down to the 200-week moving average. Then you get this consolidation and this just incredible move up. You get the blow off the top again and then it moves down to the 200 period moving average. Then we get the COVID crash. Obviously, everything crashed then, but look where it whipped. You can see that it did wick down, but it kind of consolidated right here in terms of the candles around the 200 period. We’re getting this sell-off, which is the kind of fed dump the market sell-off. We’re not quite at this level yet. So you can’t catch bottoms, but if you’re a long-term trader putting limit orders in around this level is something that I’m looking to do, especially around that kind of $25,000 area.
Now we did wick recently, during the LUNA kind of crash, but it’s still not max payne. We could go through this kind of max payne scenario, trade down and down and down like this, but this has been typically throughout Bitcoin’s entire history, the area of support. This is 13 years of history or let’s take it back to 2015 because it’s kind of where we’re looking at but this history right here is showing us that this level should be according to this chart. This very long term trend, which obviously is extremely a lot of data here, that would be kind of where you’re looking at max payne can it go lower. Yes, of course, you really can’t predict whether some hedge fund is going to blow up because of monetary tightening or what’s happening. However, this is the area where if you’re a long-term investor, what else are you looking for? This is the area where you start to scale in and just start to kind of dollar cost average over a period.
But one thing that I want to look at now is inflation because this is really what is controlling the whole market right now because the Fed is going off the inflation figures. If we just take a look at this data, you can see the kind of one thing that is the real kind of elephant in the room here, which is food and energy, and obviously a lot of the cost of food is actually energy as well, because it’s transportation. You’ve seen Walmart and Target come out this week or kind of last week. The reports were not that great, essentially saying that energy and transportation are just crazy expensive right now.
However, what we’re seeing is the rate of growth of inflation just starting to come down. It’s not coming down, but the rate of growth is starting to slow. This is really important because the Fed has to remain ultra hawkish until those figures show that it’s coming down.
Once it’s coming down, things change massively because the Fed can then start to become a little bit more dovish and ease off a little bit if this inflation keeps on not good for equity and crypto markets. This is what the market thinks inflation is going to do.
Inflation expectations, which this chart shows, are coming. As you can see, they’re coming way down right. We topped out at around this level, you know, 3.6% in April, just starting to come down. People and the market are expecting things to start coming down.
The reason why I think that will happen as well is because if you look at the results of some consumer brands like Walmart and Target in the states, who are saying we’ve got tons of inter-stock that we haven’t sold, that means they’re going to start to discount that to get rid of it. That brings inflation down. The price of goods coming down is the key. It must come down because once it starts coming down, then the Fed will start easing off and monetary conditions will ease a little bit, and you’ll see things like Bitcoin and crypto rocket again.
The third piece of information is an incredible stat by Tom Billow. This is showing us that we have indeed in this past period, this sell-off that we’ve seen is now the third worst sell-off in living memory in the stock market and therefore crypto as well.
So what we can see right here is in 2022 we’ve had a seven-week decline in the S&P 500 and a 14-week decline. This is actually worse than the 1980 crash, with a seven-week streak of price declines that only declined by 13.
There are only two periods in history where we’ve had a worse time. One was the 2001 .com bubble, which was an eight-week streak with a 15-decline, and then the 1970s crash, which was by far the worst. We could even beat this now because every single crash is different. You can’t say that we’re going to have the same outcomes of these. If you just look on the right hand side, what you can see is that essentially, if you invest during one of the worst periods in the stock market that it’s possible to have, if you buy and wait for three years, you have around a 95% chance of making money on those investments.
If you invested in this terrible streak for three years, you would have received a 31.8% average return. S&P 500, which is essentially the 500 best companies in the best economy in the world, Bitcoin is not that. I think Bitcoin is essentially a worldwide financial index. That’s why I believe it has uncorrelated upside potential because it’s the first time that you can see emerging markets genuinely have a financial infrastructure that could create a lot of wealth for those areas. So that’s why I think Bitcoin has potentially quite a large upside in comparison to the S&P 500 because these stocks are now in an economy that isn’t growing like it did before. This was in the 70s, 80s, and 2000. America was a very different place. The western world is now slowing its growth. For me, Bitcoin is potentially something that can have more exposure to those high growth areas plus have a lot of exposure to those funds in the western world as well.
But what this shows is that this can definitely keep crashing in the short term. Three months, six months, you can see the returns aren’t great, but if you invest during this awful, awful period and wait three years, if you’re an investor, that’s not a lot of time. This means you have an over 90% chance of actually making really decent returns if you’re investing in good assets. This is the letter S&P top-quality assets and not a bunch of speculative alt coins, for sure, but just to give you this data then. We are entering buying territory right here over a shorter time frame.
Of course, no one can predict what will happen. I would not be surprised if something occurs in the markets and shocks us down to, you know, kind of that $25k level or $20k level, because that’s just max pay and that’s what always happens, but over the long term, we are in a buying opportunity area in my opinion.
[This article is a transcription of a video made by MoneyZG]
Original video: https://youtu.be/a2J8lpPoBvU ]