Bitcoin Update & Analysis

Disappointment & Resistance

It’s no secret that investor confidence in the Crypto sector has taken a heavy knock over the past few months. It seems as if every shoe to drop has been of greater consequence than the one before. I think many new investors managed to adjust their outlook after the first few casualties. However, for many, it’s now a wait-and-see game. Once bitten twice shy, noobs are now extremely cautious. Studying on-chain data over the past few months reveals how whales have been consistently selling into the multiple retail-inspired pumps we have seen.

Inexperienced traders tend to be only concerned with price action. They ignore volume and other indicators. This includes who’s buying and who’s selling. Personally, I am not concerned with the behavior of shrimps. These are average people just trying to accumulate as much Bitcoin as possible. Generally, they are ignorant of market dynamics. What they do is inconsequential in terms of “established” moves. Whales bring volume to the table and volume creates moves that hold.

Every bear market rally appears to be getting weaker as time passes. Let’s take a look. In the chart below, I have highlighted the multiple bull traps we have seen during the course of this bear market.

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The current move from the local bottom cannot even be considered a pump, it’s basically floating sideways. The point I am making is that the shrimps are losing stamina. The whales are just wearing them out slowly but surely. Eventually, they will surrender.

Exhaustion will simultaneously be accompanied by a meaty move to the downside. In October, I drew readers’ attention to the commencement of low volatility, similar to that seen during the final capitulation of the 2018 bear market.

When looking at the charts, you will also be able to note that the range has become compressed. Bitcoin has been trading in a tight range for a few months now, and I believe is moments away from a significant move.

Why do market cycles often appear so similar in nature? Because people don’t change, they repeat the same behavior over and over again. How many of you promised yourself that you would sell the top of this past bull market, so as to not repeat the mistakes of the past? How did that turn out?

Even when you want to behave differently, you find yourself stuck in habitual behavior. So, what do you think becomes of the majority of the market, who were not here before and are not even trying to adjust past behavior? This is why the validation of others means very little to the knowledgeable… their portfolio value is the only validation that counts. This is also why I try to encourage the study of technicals, data, and charts. The only way you adjust behavior is to establish a clearly defined strategy that is always executed without compromise.

This is the key difference, and what separates traders from “traders”. Strong disciplines and rules dominate a successful trader’s actions. Either continue flip-flopping on your emotions or dive into the data and begin learning and studying. Continue ignoring technical analysis and keep repeating the same mistakes, simple. This requires work, which is actually the real reason many choose to overlook it. Every development and point of growth begins with honest reflection.

Waiting Game

I am simply looking for trading opportunities while I wait for a final capitulation event. Many argue that there is no catalyst to warrant another heavy drop. Really, BTC collapsed 50% in 2018 without any catalyst. Once retailers are worn out, they have no choice. Ever been to the gym and pushed really hard? Muscle failure happens despite your mental focus and determination.

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