It’s always “now or never” for Bitcoin, but it really does feel that way right now… Covered: Bitcoin’s parabolic rise since 2020 Retail buying, Whales risk-off selling Support at 40k is when Whales may come back in Other factors indicate bullishness Parabolic Since March 2020 Let’s have some perspective here…when looking at the charts, Bitcoin […] The post Bitcoin At Critical Inflection Point, Will Bulls Prevail? appeared first on CryptosRus.

Bitcoin At Critical Inflection Point, Will Bulls Prevail?

It’s always “now or never” for Bitcoin, but it really does feel that way right now…

Covered:

  • Bitcoin’s parabolic rise since 2020
  • Retail buying, Whales risk-off selling
  • Support at 40k is when Whales may come back in
  • Other factors indicate bullishness

Parabolic Since March 2020

Let’s have some perspective here…when looking at the charts, Bitcoin has been in a bull run since March 29th, 2020.

In other words, Bitcoin has been going parabolic for 21 months straight. It may not that feel that way if you became a “George” around the time Elon was pumping Doge on SNL, but it is indeed the case.

It is arguable we are absolutely still in a bull market and still on the uptrend, making higher lows. Nearing the end of this 4 year cycle has simply driven investor sentiment towards believing December to be an inflection point, the historical data backs that up.

And on the other hand, it does appear to be true that as equities become much weaker, BTC suffers in the short term. So we are reaching a critical mass where the economy looks to be on ice, while BTC is at this very tense moment. That mixture is volatile.

Retail Buying, Whales Selling

Those whales who were invested since that time, up until now, have begun to become “risk-off” investors. They have realized this nearly two-year bull-run has been magnificent, and with the bleak macro outlook of overvalued equities and Fed tapering around the corner, selling has commenced in a big way.

As the below data indicates, Whales (1k to 10k BTC) have been selling since around the end of October, while retail has been buying up BTC.

Bitcoin on-chain data featuring fish and whale BTC wallet clusters. Source: Econometrics

In the case of Bitcoin, the period we are seeing of whales selling and retail buying is followed by retail capitulating at the breach of “key levels” and then immediately after that, whales begin buying and eventually retail stops selling.

Recommended: Key Data Signals Potential Start of Bitcoin’s Final Parabolic Leg

Whales Eat When Retail Drowns

Based on the above chart, it looks like retail capitulation could come soon, if Bitcoin, and this is a big if, dips below 42,000, which as seen below, has been strong support since July. It is usually at a moment like that, where the sentiment of “Bitcoin could now easily go to 20k” becomes prevalent online, whales begin to buy, and retail folds.

We have already flushed out leverage since Dec 4th, which is bullish. As it stands right now, it feels like the quiet before a storm.

At the weekend, Willy Woo interestingly pointed out that (see below) retail investors haven’t bought the dip this strongly since the beginning of the bull run following the March “COVID crash.” However, whales are still sitting on the sidelines, likely because of the broader macro factors at play. The market feels skittish on all sides.

All that said, Bitcoin is at a critical inflection point. Many think ranging into 2022 is unlikely, arguing we will either see a plunge down or a move up before a true consolidation period. 

Other Factors Indicate Bullishness

One thing to keep in mind is that Bitcoin has also had factors playing out in the background that sneakily imply bullishness in the short term. For example, due to Huobi’s trouble in China, there has been absolute bloody selling happening in Asia. That macro event of broad selling is likely over, though.

The good news is, Bitcoin has held strong in the face of this selling. Nevertheless, even if we break below $40k, it’s highly plausible that whales would rather buy up those dips when retail capitulates, rather than holding onto USD. That is only logical. 

Volatility is your friend. But if you hold, then you just need to zoom out and then none of that even matters. At the end of the day, it is a very simple strategy, buy the fear, sell the greed. It is only when Bitcoin gets its quarterly eulogy that retail begins to capitulate and whales buy.

Another thing to keep in mind; even though many investors are risk-off, and looking at BTC in a 2 year bull run may make you queasy about holding, understand that bitcoin’s rise is inversely proportional to our ever-overheating fiat printer. The worse our monetary policy becomes, the better off you are holding Bitcoin. Period. 

I personally think the bulls will prevail, sooner than later. But it may take a spike down to trigger that. Bitcoin is in the hearts and minds of more people than ever before. That is certainly not a top signal, because people think of Bitcoin as the ultimate safety net. Whales buy your Bitcoin when fear hits the internet. Every. Single. Time.

We may need an external catalyst of some sort, though. If not that, it would be a supply squeeze, or retail would have continue to buy the hell out of any dip and hold strong.

Recommended: Did Lemonade Actually Buy Bitcoin?

The post Bitcoin At Critical Inflection Point, Will Bulls Prevail? appeared first on CryptosRus.