No person might argue that 2022 was something however a bear market. After Bitcoin reached an ATH in November of 2021 we noticed the bear market develop in traditional style by shedding assist at key technical ranges. Whereas the bear was taking part in out in considerably predictable style, the market was caught off guard by the occasions that led to the FTX crash in November 2022. As a result of the contagion from FTX had a devastating ripple impact that was felt by the biggest establishments with crypto publicity in addition to banks, I truly anticipated costs to fall even decrease. 

On the time, concern and preventing amongst institutional gamers like Galaxy, Gemini and Grayscale (below DCG) who had been amongst SBF’s largest institutional victims added to the priority that value would grind down in direction of the decrease teenagers, but considerably remarkably and maybe not so coincidentally on January 1, 2023 Bitcoin began to rally. What was first thought-about weekend whale video games advanced long gone the weekend, and in reality, via Q1/2023 I recognized an entity on FireCharts which I nicknamed “Infamous B.I.D.” that was double stacking massive blocks of bid liquidity to push value larger. There was a sample to the conduct that made it considerably predictable and tradable. These strikes had been nicely documented in my X feed throughout that time period. As soon as value reached $25okay that entity disappeared. Even with out the assistance of that manipulation pushing value up, and even if the macroeconomic state of affairs was horrible, the geopolitical state of affairs went from unhealthy to worse and the US political state of affairs advanced from a dysfunctional sh*t present to a full blown circus, the market continued to rally. 

Now, almost 12 months and > 150% from the day the rally started, the controversy between bulls and bears over whether or not this can be a confirmed bull market or a sequence of bear market distribution rallies actually continues at this time. Whereas it’s comprehensible that somebody might take a look at 150% and instantly assume bull market, it does require a deeper understanding of what distribution and accumulation seem like. From my view, that also isn’t as clear as one would anticipate. Traditionally, the Purple Class of Whales with orders within the $100okay – $1M vary have had probably the most affect over BTC value route. The order circulation information I’ve been monitoring on Binance reveals that via a lot of the yr they (together with bigger MegaWhales) have been shopping for dips and distributing considerably greater than they purchased on these dips on the uptrends that adopted.

Solely lately have we seen an uptick that may very well be a sign that the development is shifting. Parallel to that, some on-chain information suppliers are displaying a rise within the variety of wallets holding BTC which can also be a sign that we may very well be transitioning from a distribution section to an accumulation section and I’m on the lookout for extra clear proof of that. One of many issues I search for to get a way of that’s bid liquidity. I imagine that “Liquidity = Sentiment,” and it’s no secret that order books have been skinny on each side of value via a lot of the yr, nonetheless within the final three weeks or so, we’ve began seeing extra institutional sized bid ladders coming into the order e-book and that truth helps a bullish thesis, so long as they don’t dump via the subsequent pump.
With all the above in thoughts, there are most definitely turns and twists that traders ought to look out for. Certain we’re beginning to see some enhancements on the U.S. inflation and unemployment numbers, however one thing in these studies doesn’t jive with actuality. For many center and decrease earnings People, bank card debt is climbing to new highs, rents have soared, dwelling possession is unattainable, grocery costs are excessive and a Metallica “Standing Room Solely” Area ticket is $575.  So in my thoughts, we nonetheless have a percolating macroeconomic downside and the geopolitical and U.S. political points appear to worsen by the day.

Other than that, the RSI has been over cooked for an prolonged time period and we simply had eight consecutive inexperienced weekly candles. Each of these components have traditionally led to corrections. I might provide the “Historical past doesn’t need to repeat itself…” spiel or I can present you what traditionally occurs after strikes like this and allow you to determine. 

One other potential twist to contemplate is that the present PA has a putting resemblance to the primary leg of the 2019 rally that turned out to be a Fib retracement, that finally acquired rejected from the highest of the Golden Pocket at .618 Fib. That led to a 53% correction earlier than the Covid Crash took it down greater than 70% from the .618 Fib.

At this stage, I’d be stunned to see a draw back transfer that deep with out the help of a Black Swan, however we’re at present having some interplay with the Golden Pocket that appears acquainted. Whereas it’s cheap to anticipate some resistance coming into and exiting the Golden Pocket, there may be one very bizarre twist to what we’re seeing and that may be a unusual sample I’ve observed occurring on or round December 17th. Yearly since 2017 there was a transfer on December 17th that had Macro implications. The one exception to that’s final yr when it occurred on December 20th. On every event the value motion led to a macro breakout or breakdown. It’s too quickly to inform if this transfer will validate the sample on the day of writing (Dec 19th), however on the 17th we noticed BTC get rejected from the decrease finish of the Golden Pocket and in addition lose the 21-Day shifting common. Worth has been flirting with each of these ranges ever since so we’ll have to attend to see the way it performs out over time. Other than these issues I’m watching the upcoming ETF window very intently. I feel that the market is numb to SEC delays on these choices, however there may be a lot anticipation that this time we’ll see an approval, {that a} flat out rejection has the potential to be the catalyst that triggers a correction. 

No matter the place you aspect on whether or not we’re or usually are not in a confirmed bull market, we’re seeing quite a lot of proof that if we’re not in it, we’re near it. When you’re a long run investor and also you haven’t already began constructing a place, it’s a superb time to determine some targets to begin scaling into one. This after all is determined by your time horizon and danger urge for food, however you probably have a long run outlook and 6 determine targets for BTC it’s nonetheless early sufficient to get in, however it’s additionally a good suggestion to avoid wasting dry powder for a correction as a result of in my view, it’s not a matter of if it can come, however when.

Regardless of the continued debate between bulls and bears over whether or not or not we’ve been in a bull market, I can say that regardless of the uptrend, there was no clear affirmation that we’ve been in a bull market via a lot of the yr. Nonetheless, the truth that we’ve lately began to see extra institutional sized bid ladders coming into the order e-book together with the on-chain information that signifies extra wallets holding for longer and the latest shopping for after the R/S flip at $40okay are indications that we could also be on the verge of a breakout.

There’s little question in my thoughts that quite a lot of the momentum we’ve been seeing is expounded to the subsequent ETF determination window opening January 5-10 and the April 2024 Halving. The FED’s latest determination to pause price hikes and trace at a pivot to cuts in 2024 definitely added gasoline to that momentum that pushed value above $40okay. In typical crypto type, we additionally had some assist in late October via early December once I observed some acquainted patterns within the order e-book. I can’t verify with absolute certainty if it was the Notorious B.I.D. spoofer we saw in Q1 returned, however it was the identical recreation I recognized via Q1 being executed and there’s no query that it helped push value up via the $35okay – $40okay vary earlier than it disappeared.

(…) As a lot as I’d prefer to see a correction come earlier than we get there (the Bitcoin spot ETF determination), the market doesn’t care what I would like. I might anticipate it to come back earlier than the Halving. Whether or not it comes earlier than or after the ETF determination window closes stays to be seen. Within the meantime, I’ll proceed to look at order e-book and order circulation information and commerce what’s in entrance of me.