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Bitcoin, the Good the Bad and the Ugly!

There are so many factors effecting Bitcoin right now, it is hard to predict where it will go next.  So far, the announced rate hikes, lack of a spot ETF, and strengthening USD on the DXY are keeping Bitcoin down.  This cannot last forever, but it could persist for a while.  Here is a chart below on the stock to flow model with a more elongated prediction as to where Bitcoin may go over the next 18 months:

Neutral ATM - Bitcoin, the Good the Bad and the Ugly!

It does seem reasonable with all of the factors at play right now, that this bull run may last much longer than any of us thought it would.  Yesterday, we explored what central banks may be doing.  This next chart from Will Clemente, looks at dormancy flow.  If coins are not moving for a long time, that leads to a buy signal.  Over the past years, Bitcoin moves up big after a long dormancy flow where few coins are not moving.  It is a major buy signal:

This next chart also from Will Clemente shows a consolidation period after Bitcoin dumped significantly (-42%) over 2 months.  Back in October 2021 Bitcoin consolidating after a bad September only to find a bottom around $40K and rise up to $69K in mid November.  Now Bitcoin appears to be back at early October 2021 levels again, testing $40K bottom support.  As long as this support holds, a reversal could be expected:
Neutral ATM - Bitcoin, the Good the Bad and the Ugly!

The next chart is the bad or the ugly of Bitcoin.  The weekly close is below the 50 week moving average for the first time since March 2020 and the NVT in the chart below switched from red to white.  This means over the next few days we need to watch the $40K level and look for a stochastic RSI cross.  Here is the chart:
Neutral ATM - Bitcoin, the Good the Bad and the Ugly!

Stochastic RSI could see a death cross whereby the red line crosses above the blue line. This could later reverse to a bullish cross at some point.  So again, watch the stochastic RSI and that $40K level for Bitcoin.  Price action has been extremely volatile since mid November, that will lead to a bottom.  However, this bottom may be BELOW $40K, and right now we do not know where it is.  Thus, Bitcoin could still drop into the $30K’s.  So it is best to wait and watch for the next move.  Right now it is good, bad, and ugly.  The reversal pattern is not yet clear.