Bitcoin pulled back about 9% yesterday. It was about that time that Binance decided it was a good time to do maintenance and prevent withdrawal from the platform. Users were not amused. Everything is a conspiracy theory. Trading was not disabled, and I used the opportunity wash some Hive so I can declare losses on my taxes.

2021 Bitcoin Doubling Curve

There's no denying the market is bubbled right now. The doubling curve tells us we're trading at October 2021 levels. At the same time, this rally could be far from over. 2021 is the fourth year in the mega-bubble cycle.

Traditionally Bitcoin will come back to the curve at least once every 13 months. In 2020 Bitcoin followed the curve almost exactly, with a crash exactly to the curve in Dec 2019 and a recovery from the COVID crash in under a month... while hugging the curve tightly in Summer and Fall. I repeat, Bitcoin hit the doubling curve target like a dozen times in 2020.

2020 Bitcoin Doubling Curve

Because we expect Bitcoin to perform in mega-bubble territory in Q4 2021 and it takes about a year for mega-bubbles to deflate... that doesn't leave a lot of room for the price to return to the curve, leading me to believe that one of two things will happen:

• The current rally spikes much higher, becoming wholly unstable while completing a blow-off top volcano pattern that crashes back to the doubling curve in 6 months (just like Summer 2019).
• The rally runs out of steam here and crashes to the doubling curve sooner than summer. Perhaps even as soon as February or March.

If neither of these things happens the price of Bitcoin might not go back to the doubling curve for over two years. Certainly this is possible but seems unlikely. At the same time we are living in unprecedented times and Bitcoin has never existed during a legacy bear market. Add to that fact this wave of corporate adoption, and we really have something new here.

I can't imagine Bitcoin returning to the doubling curve before summer time for another reason as well. We consolidated for so long under $20k and had so much volume and corporate adoption that $20k now stands as a massive support. Even MicroStrategy recently bought in with all those funds and the average was higher than $20k.

Multiple corporate entities have a financial incentive (reputation and stock price) to keep Bitcoin above $20k at this point, and they will likely see any kind of dip to that level as a buying opportunity rather than cave in to weak-handed capitulation.

Another possibility I hadn't considered until just now is that the market simply trades relatively flat for the next ten months and hits the doubling curve that way. Truth be told I'd be very very surprised if this happened, and many would be bored to tears, but that kind of stability would be an incredible accomplishment for the top coin by market cap.

What's up with this dip doe?

The recent dip has made me very nervous. I've been thinking about moving all my funds out of Ethereum. ETH is my gambling coin, and now is not a great time to be gambling on leverage.

I think it's much smarter to move all my ETH back into BTC. Bitcoin is basically guaranteed to perform better than ETH should the market crash... and in the case of a pump there's a strong chance it outperforms there as well. With all this institutional money flowing solely into Bitcoin... it's somewhat foolish to be riding the ETH train at the moment.

Example

Say Bitcoin goes up 30% and ETH goes up 20%. If I'm leverage trading ETH I'll make just as much money in this scenario, but I'm taking more risk for no reason. If Bitcoin crashed 20% and ETH crashed 40%... I'd get absolutely wrecked because of the leveraged margin bet. Now is a great time for Bitcoin maximalists, and hopefully soon I'll pull the trigger and my stake will reflect that.

What's up with this dip doe?

• SEC attacking ripple
• greyscale cutting off investors
• Microstrategy is done buying.
• self-hosted wallets regulation still being threatened

Nobody who actually values decentralization likes Ripple, but they are still on our team. The SEC attacking Ripple is an attack on all of us. The CEO of Ripple has the audacity to now claim that attacking Ripple supports China, because BTC and ETH are Chinese owned. He's a dipshit, but I hope he wins.

The SEC is also attacking centralized exchanges by saying they need to KYC the self-hosted wallets they transfer to. I've already explained why this is the stupidest idea ever, as it only takes on extra transfer to another self-hosted wallet to avoid it.

Perhaps the SEC doesn't want citizens to be able to claim that the money they transferred directly off of Coinbase/Bittrex went to another person. Perhaps that extra layer of "certainty" helps the analytics systems better identify who owns what. But honestly if that is the case I don't quite understand the logistics. It seems like pointless regulation that simply serves to put deadweight on American exchanges.

Greyscale has also temporarily cut off investors from buying into their service. This creates panic, but when trading reopens we traditionally get a spike to make up for it, meaning the market may be coiled for a fresh jump upward.

MicroStragy has also finished buying that $625M worth of Bitcoin or whatever it was. Surely traders must be worried that the market has run out of steam, but I'm not. There are still a lot of suckers who sold below $20k that haven't capitulated back into the market yet. Gotta give that some more time. Also, retail might make some moves in the near future.

Borrowed time

This economy is on extreme borrowed time. People are not being evicted from their homes yet, but it's only a matter of time before the process begins. The entire country seems to be furious with this new COVID relief bill that's sending money over seas and cutting the checks for the people in half. Trillions of dollars are being printed, and the allocations of those funds isn't going to help anything. The system is corrupt to the core, and we are witnessing yet another controlled demolition of the middle class.

Seriously, have you been inside a Walmart lately? Small business need to close while I stand shoulder to shoulder with the mouth breathers so I can buy coolant for my overheating car? Seriously? Dirp.

Bear market

Surely, when the bear market hits this economy like a ton of bricks, it's going to take Bitcoin down with it. However, once Bitcoin hits the doubling curve and holds support, all those institutional investors that are bleeding in the legacy economy are going to be staring at Bitcoin with those greedy-goblin eyes. The institutions who enter at or near the doubling curve are going to make serious bank, creating extreme FOMO that causes the MEGABUBBLE in Q4 2021 or Q2 2022.

Summer Bull Run 2019

Comparing this run to the last one, we can see that once the top blows off the volcano we still have three entire months to swing trade the market or just sell and wait for the dump.

We also see that timing the peak is a lot harder than simply timing the dead-cat bounce that comes two weeks after the peak. Weekly candlesticks become quite relevant during these volcano blasts, as we can see that a lot of the big moves happen in one week intervals.

The chance that the mega-bubble gets pushed back to Q2 2022 is very high if I'm right and this current run spikes up to $40k-$50k. This sets a pattern of entering a bull-market bubble every 18 months. We'll have a better idea of this possibility in a couple months, and then again in Q4 2021.

Conclusion

So much bad news out there for Bitcoin... but it only dipped 9% and has already recovered a lot of those losses. Also volume is still double the average, which is a pretty strong sign that there is more upside on the table.

Again, everything still points to Feb/March being bad months for this market, even though these were pretty good months four years ago. I'll be taking gains in late January if we don't get the mythical blow-off top that I was expecting.

With all the institutional adoption it's hard to imagine crashing below $20k at this point. A crash to that level is a strong buy IMO, as all the institutions will be buying there as well, and they won't be selling for a while. On the flip side, $40k-$50k Bitcoin is a strong sell, and starting to cost average sell at $30k+ can't be a bad idea either. It's almost guaranteed that Bitcoin comes back to Earth at $20k within 7 months.

Posted Using LeoFinance ^Beta

Return from Market Watch: Slight Pullback to edicted's Web3 Blog