Bitcoin Idles On While The Market Waits For Its Next Move
Looking back at Bitcoin’s price action reveals it has been stuck in the $39K zone for some time now. Even though there have been upside surges, BTC has been repeatedly pulled back into this lock zone. Strong resistance has been matched by equally strong support. This has ultimately created a box that Bitcoin seems unable to escape from. The $38K to $44K zone has been providing a great accumulation opportunity for long-term investors.
Bitcoin seems to be overcoming multiple challenges, as it has done in the past. A new confidence is being established at these levels, while simultaneously creating future support. The FED’s 25-basis-point interest rate increase had no negative effect on the market, largely because it had already been priced in. In fact, I believe the market was expecting more than was announced, which subsequently helped give BTC a bit of a push!
The Macro Landscape & What It Means for Bitcoin & Crypto Markets
Not much is going to change in the macro outlook. In fact, it could, and most likely will, worsen over time. There is little the FED can actually do, as they are literally caught in a catch-22, like firefighters throwing buckets of water at a burning building. The Russian drama in Ukraine is only getting started, and we have yet to see inflation and commodity prices truly soar. The global and macro picture is that of chaos, disruption, and staggering production.
Bitcoin ultimately thrives in chaos and, as an anti-fragile asset, becomes even more robust over time. Many are confused by the current price action, but I wouldn’t interpret it as a negative sign at all. Bitcoin tends to suffer a knee-jerk reaction during chaotic events. However, it has a history of stabilizing and often going on to perform well despite the broader picture and macro events. It is these very responses that have led to Bitcoin being considered an anti-fragile asset.
How Bitcoin Behaves & Why Its Price Moves In Cycles
I expected a prolonged sideways period and mentioned it a few months back. In my mind, Bitcoin is in coiling up mode. Traditional investors are more familiar with constant, yet modest growth. They are unable to process Bitcoin’s behavior. This asset can do nothing for months, even years, and then suddenly increase by 100% within a month! People need to stop making comparisons based on immediate & current price performance.
This is not how Bitcoin operates, as it moves according to its own rules and endeavors to mystify its path for speculators. My personal thoughts and expectations are that BTC will experience a significant move in May. Events obviously have the power to trigger a move in an instant, but I am realistically working and planning around this time frame. I say this just after mentioning that Bitcoin is inherently secretive, which may sound strange.
However, at the end of the day, speculating and working within timeframes is rather important if you truly wish to benefit from the next move. If the time frame is longer, then I have an extension. Unlike investors who buy and wait, I am deploying multiple strategies. My efficiency is largely due to my accomplishing certain goals and reaching certain points before a significant breakout. That being said, it could also break down, making it even more imperative that I reach these targets.
Timeframes are important when investing in BTC because the asset is largely affected by its halving event, which occurs every 4 years. The inherent dynamics help the asset to rise, often resulting in a type of blow-off top, and what some would even go as far as to call a bubble. This dynamic causes the price to drop quickly and often results in the asset losing 70% to 80% of its all-time high. Investors must buy and sell at the appropriate time of the cycle.
Why Price Action Can Be Deceiving: Market Psychology & Hidden Signals Explained
Regardless of corrections and bearish seasons, I envision very strong growth in the future. Not even strong growth, very strong! Time is of the essence and cannot be relived in hindsight. My personal conviction is to accomplish as much as possible. I have experienced and seen this dynamic many times before. People are distracted by the price and miss out on being positioned for the next wave. Price can be one of the worst indicators and often deceives the majority.
Be careful not to focus too much on price and price action. However, if one is merely an investor, there is not much else one can do. Builders, on the other hand, are too busy racing against time to pay attention to price. True builders are busy, hoping to be ready with new constructs and passive income mechanisms to capture value in a bull market, much like a dam capturing water during a season of heavy rains.
When the bulls finally shift to bearish and accept that the market is in a full-blown bear market, that is usually when the bottom is near. Many investors turn to technical analysis. However, many overlook the fact that in a bear market, bullish setups often fail. This is crucial to understand, and volume is often a strong metric to watch to help confirm pattern failure. The same is true of a bull market; bearish setups are highly likely to fail.
How Liquidity Affects Markets During Bearish Conditions
In a bull market, not only do prices soar, but liquidity does as well. Exchanges that fail usually do so during a bear market, largely due to reduced liquidity. This means exchanges lose revenue as trading activity drops, resulting in fewer withdrawals, which is another source of revenue for exchanges. Lower liquidity can be closely tied to increased volatility. Strong liquidity is an essential aspect of healthy and more stable market movements.
Increased volume is a sign that confidence and market participants are returning. A strong upward move, matched by strong volume, should be considered a signal worth noting.
The Best Place To Store Your Bitcoin & Crypto While You Wait For The Next Market Move
The best place to secure your BTC is with a hardware wallet, also known as a cold wallet, which is disconnected from the internet. One of the most popular choices, specifically for Bitcoin, is the Trezor Safe 5 for its robust security features and open-source code. If you have a large altcoin portfolio, strong options include Tangem and SafePal, as they both support an extensive list of altcoins and blockchains. SafePal is an air-gapped wallet, while Tangem is a user-friendly card system.
Ledger is also a popular solution for two primary reasons. It supports many leading cryptocurrencies and blockchains and is considered a beginner-friendly solution. The company has been operational since 2013.
Final Thoughts
The moment will return, and the majority will live in regret once again. Bitcoin is slowly hammering away at the dam wall, and it will once again give way. Do your best to be ready, because once it triggers, it moves fast! Investors tend to get stuck in a mode, thinking that the market will never shift. This happens on both the upside and the downside. However, history proves that the crypto market can shift gears both speedily and unexpectedly.
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