Bitcoin; Patience Required!

This zoomed out chart of Bitcoin going back 10 years.  Shows us how bullish the last decade in Bitcoin has truly been.  It may be extremely volatile, but if one can hang on, it is the greatest store of value in financial history. Bitcoin could make an epic run in 2023 through 2025.  Here is the chart below:

 

 

Another aspect of Bitcoin that is key to remember in bear markets, is the purchasing power it holds.  $1 invested in Bitcoin 10 years ago, buys $10K worth of goods & services.  Holding $1 of USD over 10 years buys about $40.  Once inflation is factored in, the dollar is losing buying power while Bitcoin is gaining it.  Here is the chart:

 

 

CNBC was reporting that Government websites were comparing the cost of eggs in USD vs BTC a few days ago.  However, the above chart is easier to grasp.  

If the hash ribbons in this next chart cross, that is a clear miner capitulation signal.  Miner capitulation signals market bottoms in bear markets.  Typically miner capitulation takes 30 to 70 days.  This would take us through mid July or perhaps early August.  Here is the chart below:
 

 

The good news is, there will be great bargains to be had in later June and July.  Then into the late third quarter and fourth quarter, a Bitcoin rebound could easily commence.  So, patience!

 

This next chart is yearly candles.  It is from Steve Courtney.  For 2022, this candle is red, and is the same size as the green candle for 2021.  If Bitcoin ends the year at this price level ($30K) or lower.  It could become a bearish engulfing candle.  Which is a long term trend reversal pattern.  However, it is June 8th and we have nearly 7 months to year end.  Neutral ATM believes Bitcoin will end the year well above $30K.  This fall could be a nice bull run!  Again, patience:

 

 

Monday the blog discussed velocity of money.  This chart below proves, it has not recovered since the pandemic began in 2020.  It is now dropping since stimulus has ended this year.  Here is the chart:

 

 

While velocity of money is slowing down, which means how often a dollar is spent is slowing down.  CPI is increasing rapidly, due to the stimulus and government spending.  CPI is consumer price index.  As inflation increases, CPI tracks it.  If inflation is increasing rapidly, and velocity of money is dropping.  That means demand for debt is dropping.  Here is the CPI chart below: