Many people who ask us about Bitcoin only look at the daily candle chart, or the spot price on foxbusiness. In order to understand what you are looking at, you have to understand the history of money to a degree, and you have to zoom out. So today, as Bitcoin consolidates. We will zoom out. The daily candles are showing a descending wedge that could or should break up soon. $40K has been strong resistance and now support. Bitcoin needs to hold $40K and it has since breaking through the resistance. This next chart zooms out decades on a monthly candle chart. When entire 4 year cycles are drawn as chart patterns, you can see how bullish, and for how long, Bitcoin has been bullish! Where will the price be in 2032? 2042? You really believe the Fed will raise rates considering the $3.3 trillion it could potentially cost them to service debt, whenever 10 year yields reach 11.5% which (based on Paul Volker’s Fed in 1982), is where rates should end up? Problem is, there is too much debt in the federal system to service that much debt at yields that high. Even a 25 to 50 bps move will send shock waves. Therefore, our bet at Neutral ATM, is that the rate hike talk is just that, talk. Once it becomes action, in March, we will know. For now, we are assuming the rates change none or very little and get reversed later in 2022. Based on that this zoomed out, 40 year chart, will continue looking bullish. Bitcoin will likely be over $1 million in 2032, and over $20 million by 2042. That is way too far out to predict. Point is, the USD has no value, it’s backed by nothing, and that is what makes Bitcoin increase in value long term. It takes faith in the citizens for the dollar to retain value. After $7 trillion in new money printed since March 2020. There is no faith in the dollar left to those paying attention. Bitcoin goes up as long as the USD goes down. Nothing but a deflationary currency, has been the USD theme, since inception in 1913. We have produced many charts showing that. Now that it is backed by nothing since August 5, 1971 when we came off the Gold standard. Bitcoin is the only asset with the scarcity to truly hedge central banks, and fiat currency globally. Here is the zoomed out chart, let’s see where it ends up by 2042:
Bitcoin has now spent 201 days over $30K. That support is extremely likely to never be broken again. Here is a chart, breaking down the different support levels Bitcoin has held:
Staying with the zoomed out theme, this chart below shows what Bitcoin will do when:
- Governments cannot ban it.
- The miner reward gets halved every 4 years. (reducing supply based on the protocol)
- Scarcity is revealed globally in the face of fiat currency inflation.
- Price appreciation increases in a parabolic curve(Metcalfe’s Law):
It is also important to remember the 200 day exponential moving average in Bitcoin. These are the points in which Bitcoin hit the lows of the 200 previous days price action. As this number moves up and Bitcoin remains above this, it represents the worst price action we will see from Bitcoin. Bitcoin has never stayed below this price level for long. These red points on this chart are when critics declared Bitcoin was dead. As each 200 EMA point is touched another red point on this chart is printed. Even going by the lows of Bitcoin, it is still parabolic, in it’s growth since 2009:
Is Bitcoin charting a giant W pattern, which goes back to April 15 2021?? One thing I can personally attest to. Bitcoin is rhythmic and the each bull run hits a parabolic blow off top. That has NOT happened yet, and we know, inflation has just gotten started! What is going to happen when the rubber band that is the institutional investors, snaps? They can no longer accumulate Bitcoin at the levels they have become accustomed to? It will explode in a parabolic turn up and this has NOT happened yet! Will it? Is this a giant 10 month W pattern, which we are 70% through printing? Looks like it: