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Bitcoin Future Risk, Usually Its Overestimated

This chart shows how Bitcoin is eating Gold.  The Greyscale Bitcoin Trust Corp or GBTC, has been buying up more Bitcoin than the 900 Bitcoin per day mining supply for several months.  Although Bitcoin is moving sideways since early January, it is extremely unlikely the bull run is over this early.  It should last 18 months after the last halving.  That halving was May 11, 2020.  So, based on history we should be watching the fear and greed index, and % supply in profit on glass node.  

Historically, Bitcoin should near its top in the August 2021 through January 2022 time frame.  We have been hearing ranging dates.  When fear and greed index gets above 97 – 98 and when % supply in profit gets to >97% or so.  That may be a good time to deleverage some risk in Bitcoin.  Bitcoin is very far away from those levels right now.  We will ladder out in segments over time.  We will not even attempt to guess the top.  

Below is a chart on GBTC compared to Gold ETF’s:

Here is a recent Bitcoin chart showing it is in a descending triangle.  These always have a greater chance of breaking down.  If Bitcoin bounces down from here and breaks down the $23K to $24.5K range is a likely support area.  Neutral ATM has been buying up as much as we can around $30K.  If it drops in the $20’s we will buy that up too.  We know Bitcoin has a long, long way to run in this bull market.  We will not sell anytime soon.  Not a chance!  It does take intestinal fortitude to wheather choppy markets like January has been.  September went negative for the month (-8%).  However, October through early January was a (+460%) run up!  Neutral ATM advised not to sell in September and we bought dips then.  Same strategy now.  Here is the chart:


Remember, you have to zoom out.  Here is, for the hundredth time, the stock to flow model:

Look at the bottom of the stock to flow.  For early 2021, it is below the median line and still in green.  Bitcoin is not near it’s parabolic final leg of the bull run phase yet.  This model predicts that Bitcoin will hit $85K a year after the May 11, 2020 halving.  So in 4 months it will more than double in order to stay on track with the model.  Also, look how far back this model goes.  It starts in late 2010 per the bottom of the chart.  Neutral ATM continues to believe this chart predicts where Bitcoin is going with more accuracy, because it simply measures supply in number of days, since the last supply shock.  If anyone wants more detailed information here is a specific article about the stock to flow model, click here to view.

The conclusion of the article is below:

“Bitcoin return was not in line with risk, but very much in line with S2F model. Bitcoin options and futures markets do not expect rising prices at or after next halving. It is possible that markets still overestimate future risks.

My conclusion is that bitcoin markets are indeed reasonably efficient and price in S2F model, but also overestimate risk. Therefore, I prefer using S2F model over a classic risk & return model to forecast future bitcoin price.”

Whether an investor just wants to risk 1% of their portfolio and get an 8% return with almost no risk, or increase that risk factor exponentially for a greater return, Bitcoin generally follows the stock to flow model since 2010 and has been accurate.  Thus, we keep showing it to our readers frequently.  We practice everything we preach, and truly believe central banks will be utilizing first central bank digital currency, and eventually, Bitcoin, as the global reserve currency.  That may not happen, but regardless, Bitcoin’s asymmetric upside cannot be ignored. 
Neutral ATM sells and buys Bitcoin as little as $20 at a time! You do NOT have to buy an entire Bitcoin.  Neutral ATM is here to get everyone off of zero Bitcoin. 


Give Neutral ATM a try.  We have low rates, convenient locations and we are expanding. Contact Neutral ATM, we will answer all your questions about Bitcoin and using our ATM machines. Find a Neutral ATM Bitcoin machine location near you.