A Unique Path
Looking back in history, one is able to see how many times Bitcoin has been declared dead and how many times it also defied predictions. Choosing rather to travel its own path, Bitcoin established itself as a truly unique asset, unlike anything we have ever seen. Looking to past performance is generally an accepted form of price prediction, yet it should be accompanied by other metrics sharing a similar potential outcome. The more confluence you are able to gather in order to substantiate your prediction, the more chance you generally have of being correct. Unfortunately, when it comes to markets, news events are at the top of the list when it comes to directing markets.
News Is The Most Powerful Market Mover
In other words, even if the charts are signaling a bullish breakout and a negatively interpreted news story is released, the markets will choose the direction of the news event. This was quite evident throughout 2021, as Musk often tweeted a negatively interpreted opinion just as the charts were busy creating bullish formations. The way in which this is often done is in such a way that it can never really be said to be manipulation. Oftentimes there are obviously also just naturally negative events being broadcast that will also be interpreted negatively.
Although there is often an initial knee-jerk response, Bitcoin often seems to toss negativity aside. Consider just for a moment the recent China mining ban. The majority of BTC miners were originally located in China. Consider then the detrimental effect of a complete ban. Sure, some were able to relocate but it would also trigger smaller miners having to sell to finance relocation and other expenses. An event, which if it was to happen to another industry would have the potential to stunt growth for years, and yet Bitcoin bounced back within months.
You Need To Always Factor In Relativity
Some people seem to think that a bullish bias must see the price go up. This is in fact not true. You need to factor into account the relativity of the opposing force, or market dynamic. For instance, if a very negative news story was released in relation to, or affecting a certain asset, you would consider the price to drop significantly. If the price remains stable or drops modestly, it would imply that bullish sentiment (buying support) is actually offsetting the negative news.
However, if the bullish bias was not in place, the price would have collapsed. Understanding markets beyond a technical viewpoint is imperative, in order to gain a full and comprehensive understanding. It has often been said that acquiring a degree in psychology would benefit any and all CEOs, as it is foundational in effective business management. Correctly interpreting behavior and predicting behavior is extremely beneficial to any and all businesses.
Bitcoin Remains Predictable By Being Unpredictable
Something that I have learned watching this market for 7 odd years is that exactly when you think that a particular outcome is now out of reach and no longer an option, BTC begins to plan. Similar to a fighter allowing himself to be beaten until the betting odds are well in his favor. At this point he comes out blazing and shocks the crowd, taking the majority of the money from the crowd. Betting against BTC is a dangerous activity.
I remember shorting BTC when it was hundreds of dollars. After a move that generally would suggest a pullback, I went short. I was coming out of traditional markets. Forex, stocks, CFDs, and the like were what I was accustomed to. I quickly realized that this is another animal and highly unpredictable.
Predictability Within The Unpredictability
Throughout all this unpredictable price action, there soon began to form a level of predictability when looking back over time. This is where the halving cycle narrative began to form. It was becoming clear that even though in the short and medium-term things were very unpredictable, the longer-term began to reveal a level of predictability. This has served BTC investors very well for quite some time now. This predictability seems to have created a “perfect storm” opportunity for BTC to utilize the current manipulation as a tool to reestablish its unpredictable behavior.
BTC Enjoys The Element of Surprise
Once an extended time has passed, which will most likely also destroy the majority of the current narratives, BTC will most likely find confidence in the uncertainty and continue its journey. It is also important to remember that Bitcoin is truly an anti-fragile asset, which ultimately means that even negativity is utilized as a tool to eventually move forward. It can be said that an anti-fragile asset actually requires a certain amount of negativity.
The Speculation Continues
In the meantime, the community continues to speculate on the future of BTC. Readers need to understand that in all honesty, that is all anyone can actually do. Nobody knows the future and even though some may appear to, it is merely a projection that is based on various points of data and analysis. Ultimately, you want to be taking into account the voices that have a record of being accurate the majority of the time. Even when the picture begins to appear more clearly, there will always be counter-narratives. Blocking out the noise is becoming more and more important as this market matures. More adoption taking place will ultimately lead to an increase in noise.
I don’t know about you but I find it extremely important to isolate and pay attention to informed and knowledgeable voices in the space.
I believe that Bitcoin will use all the current uncertainty, confusion, and lack of direction as a distraction for its next big move. Don’t focus on all of these elements, they are merely the trojan horse that is hiding Bitcoin from the aspect of predictability. Once again, this is nothing too unsettling for the hodlers and builders. Furthermore, on-chain data continues to reveal that the top Bitcoin addresses are still accumulating. In my opinion, patience is wasted if the time is not utilized to build and further strengthen your position.
Thanks for joining me on yet another edition. Until next time, keep stacking sats!