Zoom out, and relax! These prices could get into the upper $30K’s. They could drop lower into the $30K’s. It depends on which support level holds. However, from a zoomed out decade view level. Bitcoin is a max opportunity buy! This price weighted by reserve risk is color coded, and green is max opportunity, red is max risk. See this decade view chart below:
The most important thing to remember is zoom out and look at long term charts. Here is a little more detail below. These next three charts detail the gausian channel. Whenever Bitcoin enters this channel it takes a year, on average, to get out of it. The first chart shows the 2014 bear market, the next chart shows the 2018 bear market, and the black swan event of 2020 (the pandemic). The final chart shows where Bitcoin is right now! It has been rejected (last week), by the mid line of the gausian channel. In the third chart below, notice the yellow box. That is the zone where Bitcoin price is at it’s lowest, and is the best time to buy! The opportunity zone. Also, note (on the third chart) Bitcoin dropped into the gausian channel in May 2021. It came out for October and Novmeber to hit $69K, but dropped back into it again! Thus, mid next month, will be one year since Bitcoin became stuck in this channel. Here are the three charts from Steve Courtney:
The opportunity zone in the above chart starts in the mid $30K’s. Bitcoin has already been there several times since November 2021. In our opinion, Bitcoin does not need to drop far into this box. We hope it does not. Nor does it matter if you buy Bitcoin at $40K, or $32K, or $24K! Longterm, Bitcoin will hit a peak north of $200K and further out, $1Million. Buy and hold has been, and will remain our only investing policy for Bitcoin and Ethereum. Although we continue to lessen our Ethereum exposure, and it may become 100% Bitcoin soon. Ethereum is not decentralized, it has one owner, and scarcity is exponentially in Bitcoin’s favor, not Ethereum’s!
Now, let’s look at global macro, which pushes investment into Bitcoin, LONGTERM! De-dollarization has been going on a long time, but has really sped up into hyper speed over the last year. Click here to read article.
Previous blogs have spoken ad nauseam about de-dollarization. The US dollar will not be the global reserve currency forever. Most likely, CBDC, central bank digital currency, will be rolled out as a replacement. Canada and China are already doing that. Remember, CBDC can be printed just as fiat currency is now. Plus the central banks can tie bahavioral economics into them. Like, booster shots, social credit scores, and green energy key indicators. If your behavior is not what they want, access to the CBDC can be denied! We KNOW this will be rejected by the people.
Inflation is 7.9% according to CPI, while the 10 year rate is 0.8%. The Fed is talking about a 50 bps rate hike in May, and perhaps 50 bps rate hike in June. Expect 10 year rates to get to 2% to 2.5% and stop there. Will that stop inflation in it’s tracks? No. See this chart below, thanks to Nic Bhatia for this chart and the next one:
This is 10 year treasury yields. The trend line shows resistance at 2.47%. Now let’s look at the 30 year treasury yields: