This first chart is UGLY! It’s from Wolf of All Streets, Scott Melker. He knows what he is talking about, but like me, he groans at this chart and hopes it is not true. We will put the worst out there first. This is what it would look like if Bitcoin ranges in the $40’s and $50’s until February:
Thus, patience and conviction will be paramount for the tenacity to wait this out. Bulls are putting massive amounts of Bitcoin on the exchanges and dumping the price, keeping it cheap for HODLers. Every dip is being bought up. This buy/sell heat map shows where buying is happening at every dip:
Bitcoin is getting out to the bitter end of a confluence of the support of the 21 week EMA, and the resistance. Bitcoin will eventually break out of this:
Trends like this chart above further prove our thesis that we are not yet in a super cycle whereby there is no bear market. We still believe there will be one in 2022. However, as this consolidation pushes out, the bear market does too. Again, this bull market is NOT over!
Bitcoin balance on exchanges, shows us how little Bitcoin is left in liquidity, to put on exchanges, and use to dump the price down. This helps retail buyers, buy it up at cheap prices. This is actually done by institutional investors using the future’s ETF’s. What they do is, get an order for 10,000 Bitcoin let’s say at $45K. They sell their Bitcoin and dump the price to $43K, then take the $2K float as profit. These institutional investors own so much Bitcoin they can that, for now. That is why Bitcoin cannot break out of this range right now. However, as this chart shows, liquidity is drying up. In a few weeks or so, there will be no liquidity left and institutional investors will not have anything left to put on exchanges and sell. There is only 900 Bitcoin per day in production. 6.25 Bitcoin per block reward, per every 10 minutes! Thus the block reward halving and the difficulty adjustment are important to the timing in the Bitcoin market. This gives Bitcoin it’s rhthym, and Neutral ATM our thesis, that this rhthym is not ending this cycle. Below is the Bitcoin balance on exchanges chart:
Another thing to watch at the global macro level is rate hikes in 2022. We expect some movement in a few months. Maybe February or March, 2022. See this chart below:
If by February 2023 10 year bond rates are hiked up to 1.00% that will definently have a severe impact on stock and real estate markets. We expect no relent to inflation in that time frame. So if rate hikes are forced to control inflation. Expect a deflationary crash to reset the monetary system. Short term rates are already up while long term rates are ranging and consolidating. This next chart looks at the yield curve on 10 year treasuries. It is being flattened, rates will have to come up eventually:
The fact that rates have not moved up yet, may very well be why stocks have not crashed during the fall of 2021 which we somewhat expected. Funny, how a lot of expectations for 2021, are pushing into 2022. The stock market crash, and the “true” second leg of this Bitcoin bull run. This consolidation appears that it will continue into the first quarter. Both the consolidation of stocks and Bitcoin. We still see an end to the bond market’s control over stocks and real estate. We see stock buy backs, the government debt, inflation all culminating into a bond market crash. This, we see, will be what brings down stocks and real estate. Kicked off by rising rates in 2022. We still don’t know when this happens, just that it will happen. CPI inflation came in at 6.8%, real rates are likely 15% up to even 20% in some geographies. Yet wage growth stands at just 4.8%. Unsustainable, see this chart below:
Neutral ATM offers our clients a solution in Bitcoin. We have seen massive increases in our net worth due to Bitcoin being our primary holding. This bond bubble will likely cause a rush in to Bitcoin at some point, perhaps shortly before the next halving in 2024. This will take a lot of time to play out. We believe the 2021-2022 bull market cycle as well as the 2025-2026 bull market cycle in Bitcoin will be historic because of this bond market risk and the ensueing inflation ongoing for such a long time. Hold Bitcoin, stay decentralized and be patient. We don’t ever know timing details, just that this will play out in the future, and the best part has not happened yet.
Dan Moorehead’s reaction to the Bond Bubble may be fire, but he is not wrong:
Neutral ATM buys and sells 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.