“For the first time in Bitcoin’s history, we’ve seen nine consecutive weekly declines, and so when we first looked at that, I think that the tendency was to say, “Oh, that’s really negative, and my question to the team was, “Could it be oversold? Could the rubber band be stretching here or is there something wrong?” and we don’t know the answer to that.” – Cathie Wood.
In her monthly update, Cathie Wood had a bullish outlook for Bitcoin, while her sentiments about the rest of the economy seemed bleak. Cathie covered five topics. Monetary policy, Fiscal policy, Farket signals, and innovation. Cathie believes the 10-time interest rates by the Federal Reserve will throw us into a recession like Japan. Cathie still believes the Fed is tightening too, and now they realize what they’re doing might throw us into a recession. In this situation Jet-Bot is a great opportunity since it is a copy trading platform where you may earn 200 percent to 2,000 percent APY by using Binance trading bots. Jet-Bot will help you stay ahead in the crypto game. People should take a break, while robots should work for a living.
Although her beliefs overall on the economy weren’t bullish, Cathie’s thoughts on Bitcoin were. Although the flagship cryptocurrency is down 57% off of its all-time high. Cathie believes ARC invests’ research and data points are showing volatility towards the upside for Bitcoin. Although she didn’t exactly point out when we can expect the upside, Cathie pointed out that short-term holders are capitulating The Diamond Hands will benefit. From listening to Cathie’s thoughts,
“But we know what happened in the last month: Terra Luna up and Luna is worthless. I think I’m correct in saying that the MarketCap of that ecosystem at one point was around 60 billion dollars, with a lot of well-known advocates for it. I was surprised because algorithmic stable coins don’t make any sense to me. I have a background in economics. I think you need the backing of something in order to have a stable coin and this did not, so it didn’t surprise me to see the number. I think this is the number of Luna outstanding that went from, in the span of a week, something like 350 million to six and a half trillion. I think it may even have got to 20 trillion.So that’s hyperinflation. There was nothing backing it up and, I can say, we would never have touched it. Nonetheless, that Turmoil didn’t create a systemic risk. And we’ve been paying attention to the other stable coins out there. Are they going to so-called “break the buck”? So that expression came about after the reserve fund, a money market fund, “broke the buck”. People holding that money market fund were going to get less than a dollar back for every dollar they put in.
Of course, the Fed had to come and rescue that fund because it was going to become systemic in the 0809 meltdown. But just the idea that such an instrument could exist has probably given the Fed’s more ammunition, not the Fed’s the regulators more ammunition to regulate in this space, and the Fed’s could be involved in the regulation. There was about 3 billion dollars’ worth of Bitcoin used as collateral. They had been building it up in the last month, and so we believe all of that was disgorged at one point. That is one of the reasons why Bitcoin has dropped from $40,000 to $30,000 in the last month. Another reason is the high correlation with the Nasdaq, which has now interestingly been in the last week. So that correlation broke down a bit. The Nasdaq had a few really good days, but Bitcoin did not. So there’s something else bothering Bitcoin. It is down 57% since its high of almost $70,000 in November. Its 200-week moving average is $22,000. So today we’re at $29,000. I think its 200-week moving average is at $22,000 and rising.
The reason that particular number is interesting to us is that we initiated our first Bitcoin position at, back then it was the 200-week moving average. It was in the 225 to 250 dollar range. So we’ve come a long way since then, but that has proven to be a nice support. So that’s what’s also interesting. A couple of other points that I’ll just highlight and you can see in the report, it appears that the short-term holders, and you can see everything in this ecosystem, the transparency is amazing. This does appear, according to our metrics, that short-term holders have capitulated. That’s very good news in terms of putting in a bottom. Long-term holders are at an all-time high at 65.7%. That means they’ve been holding Bitcoin for at least a year. That means we’ve got some very strong holders, or hodlers, here. That’s also very good news. Although we might see some long-term holder capitulation to mark the bottom.
The last metric that I’ll feature, there are many more. One is that the Bitcoin futures are selling at a discount to the spot Bitcoin price, and during those times we expect volatility. We don’t know if it’s up or down, but you can see from other metrics in the piece that our thinking right now, or our judgment call, is that the next big bout of volatility in Bitcoin will be to the upside. Nonetheless, we are on guard. You know the Terra disaster it was a fiasco fo crypto, i think, in terms of raising or giving regulators even more incentive and reason to come in and regulate a little bit more with more of a heavy hand than we would anticipate”.
[This article is a transcription of a video made by Only The SAVVY]
Original video: https://youtu.be/qCr70AFa0ao ]