The ETF Aftermath
Atualizado
It has been 1 year almost to the day since my last publication and what a 12 months it has been. I previously laid out the case for a pending future recession but not before we saw massive regular bullish divergence play out on the monthly time frame for Bitcoin.
Since then we've seen a 187% move in BTC, a 25% move in the S&P 500 and every commentator, pundit and analyst confident that a recession has been avoided and a soft landing inevitable.
I'm here now telling you that I believe it to be no coincidence that the previous fundamental legacy events of which bitcoin has experienced in its past, once in Dec 2017 and the other in April 2021 has resulted in massive price corrections of 83 and 53% respectively within days of the CME and IPO announcements. Albeit the likelihood of such massive corrections are lesser given where we are in the macro cycle I do believe a sizable correction will occur days following this announcement.
What is of significant interest on the chart is the previous macro fibonacci extensions of the precious 2 cycles. That being a confluent correction at the 0.5 fib level and seeing a 40% and 72% correction there after. A 0.5 extension in this current cycle would suggest a monthly wick above $48500 followed by again a sizable correction.
To pontificate as to the extent of this correction I pose the following possibilities.
-A 30% drawdown to the 200 SMA, a support level which has served Bitcoin well historically
-A 40% drawdown to the 6 and a half year support line of macro lows.
-Or an unthinkable 70% correction somewhere around the previous bear market low, 2017 bull market high and the resistance held in July 2019 and Aug 2020.
For this to take place we need to consider some very worst case scenarios and evaluate the current macro/geopolitical landscape.
-Escalation of war in Russian Ukraine.
-Escalation of war in Israel Palestine.
-Military development of China's desire to remove Taiwan's international independence.
-The largest inversion of the 10 year 2 year yield curve in 40 years.
-The largest contraction of US M2 money supply since the great depression.
-A continuation of what is already a 50% crash in China's real estate market.
-A UK real estate crisis once affordability ceases as mortgages need rolling over after a 10,000% increase in interest rates.
-A US real estate crisis as 11 monthly falsified unemployment data is realised
-The energy and manufacturing crisis in europe compounded by the highest debt to GDP ratio in its history
-A Hollywood presidential election between a criminal and a dementia patient.
My point is the macro landscape is looking unpredictable and the TA has much confluence.
This feels very much like it did in the beginning of 2020 just before the un-inversion of the yield curve and the then pending recession. It's almost like something globally needs to be orchestrated in order to create an excuse to lower rates and roll the debt over for another 4 years!!
Who knows it might even be a cyber attack and CBDC implementation ;-)
Either way Bitcoin will still be doing its thing.
Keep yourself and those satoshi's safe.
Since then we've seen a 187% move in BTC, a 25% move in the S&P 500 and every commentator, pundit and analyst confident that a recession has been avoided and a soft landing inevitable.
I'm here now telling you that I believe it to be no coincidence that the previous fundamental legacy events of which bitcoin has experienced in its past, once in Dec 2017 and the other in April 2021 has resulted in massive price corrections of 83 and 53% respectively within days of the CME and IPO announcements. Albeit the likelihood of such massive corrections are lesser given where we are in the macro cycle I do believe a sizable correction will occur days following this announcement.
What is of significant interest on the chart is the previous macro fibonacci extensions of the precious 2 cycles. That being a confluent correction at the 0.5 fib level and seeing a 40% and 72% correction there after. A 0.5 extension in this current cycle would suggest a monthly wick above $48500 followed by again a sizable correction.
To pontificate as to the extent of this correction I pose the following possibilities.
-A 30% drawdown to the 200 SMA, a support level which has served Bitcoin well historically
-A 40% drawdown to the 6 and a half year support line of macro lows.
-Or an unthinkable 70% correction somewhere around the previous bear market low, 2017 bull market high and the resistance held in July 2019 and Aug 2020.
For this to take place we need to consider some very worst case scenarios and evaluate the current macro/geopolitical landscape.
-Escalation of war in Russian Ukraine.
-Escalation of war in Israel Palestine.
-Military development of China's desire to remove Taiwan's international independence.
-The largest inversion of the 10 year 2 year yield curve in 40 years.
-The largest contraction of US M2 money supply since the great depression.
-A continuation of what is already a 50% crash in China's real estate market.
-A UK real estate crisis once affordability ceases as mortgages need rolling over after a 10,000% increase in interest rates.
-A US real estate crisis as 11 monthly falsified unemployment data is realised
-The energy and manufacturing crisis in europe compounded by the highest debt to GDP ratio in its history
-A Hollywood presidential election between a criminal and a dementia patient.
My point is the macro landscape is looking unpredictable and the TA has much confluence.
This feels very much like it did in the beginning of 2020 just before the un-inversion of the yield curve and the then pending recession. It's almost like something globally needs to be orchestrated in order to create an excuse to lower rates and roll the debt over for another 4 years!!
Who knows it might even be a cyber attack and CBDC implementation ;-)
Either way Bitcoin will still be doing its thing.
Keep yourself and those satoshi's safe.
Nota
Well we did indeed hit 48500, exactly where the 0.5 fib was, and we have seen a sharp drop so far to 41500.I should have added to my possible %70 correction scenarios the Craig wright court case outcome around March 15th ;-)
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