Today is an exciting day. After 3 long months, Bitcoin is breaking out! It’s currently $40,300 and climbing. Up 7.81% for the day! We hope it can close over $40K to $41K by midnight tonight. That would mean a daily candle above the trend line in the chart below:
Why is this happening now? We have to caution. Bitcoin will hit lots of resistance on the way back up. Right now, it is battling $40K - $41K resistance. It will have more resistance at $46K - $47K, then $55K - $56K, then $62K and probably some resistance at $69K. This could take a while to create a new ATH (all time high). As for why it is happening, here is the whale balances chart:
Thanks to Will Clemente for these last two charts above. Whales that own above 1,000 BTC have been buying the dip hard from $33K to $37K. We bought all that we could in that range as well! We sold an old car to buy more in that range! Neutral ATM is no whale, just to be clear. We did what we could do. This next chart is interesting from a global macro perspective. Had the US not printed money, and flooded global money supply with USD, especially since 1999. Had the US not used QE (quantitative easing), and stimulus to worsen the effect of this inflation. GDP would be -$6 Trillion in 2021:
Therefore, if GDP would have otherwise (no money printing, at least since 2007) stayed the course, and the Fed done no manipulation of money supply. The US would be in the next great depression right now, or worse. How can we extrapalate this to the next FOMC meeting in March? To Neutral ATM, it means we have under 6 weeks until the lid is blown off of this secret. The Fed is out of bullets. They have no power. They cannot stop printing, because if they do for any length of time, GDP shrinks, businesses fail, unemployment soars, and stock markets crash. For example, the Nasdaq is down almost 14% since November and similar for the other indices. Yet, at least today anyway, Bitcoin is up almost 9%. If it can hold these gains and keep going next week and beyond. Bitcoin will decouple from this coorelation to the SPX it has suffered from for months! Quite an achievement.
Below are more reasons why we think Bitcoin can decouple from stocks and soar over the next 3 to 6 months. Time frames are largely unknown, until we get closer to the next halving (2024). One reason Bitcoin is doing well in general, is adoption. See this article from Bitcoin Magazine about Russian Banks selling Bitcoin, click to view on Twitter.
What about credit unions in Idaho? Click to view on Twitter.
Before today’s pump, Bitcoin was preferring spot buys (green) over derivative shorts, since December:
What that means is, investors were buying spot Bitcoin moreso than buying derivatives of Bitcoin (paper Bitcoin) and betting on a short. A short pays off when Bitcoin falls, if it reverses and goes up, the short is liquidated. So, derivative trading is risky. However, it does give us intel into the buying trends. Watching that and what whales are doing in Bitcoin are clues to what will happen next. Spot buyers have outnumbered derivative traders lately, and whales have been accumulating under $37K for the last week plus. Here is a chart below, regarding the sheer number of buyers over number of sellers. As Bitcoin moves up in price, the vertical line (at $37K now) gets higher:
Another chart worth noting is HODL waves on a 7 day moving average. Look at the purple wave at the top. That is HODLers who have held Bitcoin over 10 years. Largely, these are whales in many cases. Following what the best, most experienced investors are doing is smart in any market. No different here. The two red circles are March & April 2020 when Bitcoin was down to $3,800. The next red circle to the right is November 2021 to January 2022. This is the highest ever peak among past HODL waves. Max accumulation amongst the most experienced Bitcoin investors. What do they know?: