3 July close: The most relevant chart patterns for Bitcoin at the start of Q3 is a continuation of a stong Monthly downtrend and Daily risk quickly moving into 70% risk on a relatively small rally.
Not sure whether this is on purpose, probably, but this well known and easily recognized suit belonging to one of the most brilliant financial market entertainers and a huge BTC supporter has been wearing the Bitcoin Broche upside down since a few weeks. That says it all. Some Crypto whales say technicals don't matter in Bitcoin or crypto. Well, maybe not until they do and not just with hindsight, technical tools when applied within a proper financial risk management approach do tell a major story. The title is 'BE CAREFUL' Some people will be right and most will be wrong, as always. Right now risk remains high until some of these crypto markets really signal a bottom. As avoiding risk is in our system at least, Bitcoin doesn't look attractive. We shouldn't listen to screamers telling us why Bitcoin is digital gold. Because it isn't. It's Bitcoin and yes maybe it will go to 220k or much higher. The quantum leap that crypto devs are driving though is extremely exciting and will lead to many new solutions, but 'the powers that be' will eventually determine the outcome and what is accepted. No point speculating on the ultimate solution or what is a hype and what is not. This is one financial market that, right now, still looks high risk. It did that already in January 2021 and pushed through the roof during Q1. Huge gains have been made and partly lost again. Some lost their shirt in the recent correction or are about to. Bitcoin was a bubble in Q1 and corrected 55% thusfar currently at -48%. Someone bought that top and Bitcoin traded above 60,000 for 5 consecutive days and another few weeks above $55,000. If this is the Columbus Egg, why scream it off rooftops? Why? Whales make more money that way and that is the ONLY reason. Tghe idea of owning a basket of startup tokens with great potential makes total sense though and Bitcoin surely can have a slice of that pie, but when greed rises beyond belief something will give. 'BE CAREFUL'
26 June close: In any highly speculative financial asset class there will be a day of reckoning. And Anything that can go wrong will go wrong... 'for certain investors'. It doesn't mean they can't be right, but timing and market respect mean everything when managing risk. Last week Bitcoin reached a fresh low in the current downtrend which just confirms that the risk of a medium bottom already in place (28,800) is near zero. Monthy risk weight trend is strongly down with relatively little history in the pocket. Weekly, historically, is in an unfinished downtrend and we haven't seen a short term chart pattern with an outspoken bottom.
Since December 2020, 7 months of bottom to top and vice versa price ranges between $12,000 and $29,500, 4 months up and now 3 months down where an upmonths is a higher close than opening and vice versa. We may have already witnessed what can be described as a blow off top. We would argue that the risk is that this current correction may last much longer than desired by most investors. 10 years of very precise daily data looks more like we have completed a first primary 5 wave (Elliott) in this modern day asset, which may even be the 'only' massive range of an asset class the current generation of investors will see. This applies to lesser extend to many of the peer tokens. If this 5th major correction of BTC over the past 11 years is indeed of a primary nature the chances are that the next drop will even be sub $10,000 simply because the Dec 2017 peak isn't real support. Then a rally back to 'whereever' (say $35k) followed by another major new bottom possibly into the 1,000 to 3,000 range. This is a real risk scenario today and basically means exit.
We also notice that Gold vs Bitcoin Ratio (already recovered to 0.054) has weekend (Saturday/Sunday) gaps going up to 0,10 and even 0,20. This means a Bitcoin price level of 1/2 ($16,000) resp. 1/4 ($8,000) of the current price with the same gold price. We stay out of this BTC market and would be looking for individual native startup tokens with serious long term potential. Fortunately there are plenty of those, even though the initial reactions are that all tokens will follow the leader as we are witnessing today.
We have added a linear quarterly chart to the inflation proof log scale charts below to visualise that five wave primary trend with wave I finishing in 2014, wave III in 2017 and wave V 3 months ago. This doesn't mean that we can't be wrong, but the risk level is still plenty high. No Change.
BTC/USD interim Quarterly risk chart close 03 July
BTC/USD 10 year linear chart Major Highs and Lows | close 22 June 2021
