A Crypto Christmas Special With Material Indicators: Past, Present, And Future

Nobody could reason that 2022 was thing but a carnivore market. After Bitcoin reached an ATH successful November of 2021 we saw the carnivore marketplace make successful classical manner by losing enactment astatine cardinal method levels. While the carnivore was playing retired successful somewhat predictable fashion, the marketplace was caught disconnected defender by the events that led to the FTX clang successful November 2022. Because the contagion from FTX had a devastating ripple effect that was felt by the largest institutions with crypto vulnerability arsenic good arsenic banks, I really expected prices to autumn adjacent lower. 

At the time, fearfulness and warring among organization players similar Galaxy, Gemini and Grayscale (under DCG) who were among SBF’s largest organization victims added to the interest that terms would grind down towards the little teens, yet somewhat remarkably and possibly not truthful coincidentally connected January 1, 2023 Bitcoin started to rally. What was archetypal considered play whale games evolved agelong past the weekend, and successful fact, done Q1/2023 I identified an entity connected FireCharts which I nicknamed “Notorious B.I.D.” that was treble stacking ample blocks of bid liquidity to propulsion terms higher. There was a signifier to the behaviour that made it somewhat predictable and tradable. Those moves were good documented successful my X provender during that play of time. Once terms reached $25k that entity disappeared. Even without the assistance of that manipulation pushing terms up, and contempt the information that the macroeconomic concern was horrible, the geopolitical concern went from atrocious to worse and the US governmental concern evolved from a dysfunctional sh*t amusement to a afloat blown circus, the marketplace continued to rally. 

Now, astir 12 months and > 150% from the time the rally began, the statement betwixt bulls and bears implicit whether this is simply a confirmed bull marketplace oregon a series of carnivore marketplace organisation rallies virtually continues today. While it’s understandable that idiosyncratic could look astatine 150% and instantly presume bull market, it does necessitate a deeper knowing of what organisation and accumulation look like. From my view, that inactive isn’t arsenic wide arsenic 1 would expect. Historically, the Purple Class of Whales with orders successful the $100k – $1M scope person had the astir power implicit BTC terms direction. The bid travel information I’ve been monitoring connected Binance shows that done astir of the twelvemonth they (along with larger MegaWhales) person been buying dips and distributing importantly much than they bought connected those dips connected the uptrends that followed.

Only precocious person we seen an uptick that could beryllium an denotation that the inclination is shifting. Parallel to that, immoderate on-chain information providers are showing an summation successful the fig of wallets holding BTC which is besides an denotation that we could beryllium transitioning from a organisation signifier to an accumulation signifier and I’m looking for much wide grounds of that. One of the things I look for to get a consciousness of that is bid liquidity. I judge that “Liquidity = Sentiment,” and it’s nary concealed that bid books person been bladed connected some sides of terms done astir of the year, nevertheless successful the past 3 weeks oregon so, we’ve started seeing much organization sized bid ladders coming into the bid publication and that information supports a bullish thesis, arsenic agelong arsenic they don’t dump done the adjacent pump.
With each of the supra successful mind, determination are astir surely turns and twists that investors should look retired for. Sure we are starting to spot immoderate improvements connected the U.S. ostentation and unemployment numbers, but thing successful those reports doesn’t jive with reality. For astir mediate and little income Americans, recognition paper indebtedness is climbing to caller highs, rents person soared, location ownership is unattainable, market prices are precocious and a Metallica “Standing Room Only” Field summons is $575.  So successful my mind, we inactive person a percolating macroeconomic occupation and the geopolitical and U.S. governmental issues look to get worse by the day.

Price for a lasting summons for Metallica. Source: Keith Alan – Material Indicators

Aside from that, the RSI has been implicit cooked for an extended play of clip and we conscionable had 8 consecutive greenish play candles. Both of those factors person historically led to corrections. I could springiness you the “History doesn’t person to repetition itself…” spiel oregon I tin amusement you what historically happens aft moves similar this and fto you decide. 

Another imaginable twist to see is that the existent PA has a striking resemblance to the archetypal limb of the 2019 rally that turned retired to beryllium a Fib retracement, that yet got rejected from the apical of the Golden Pocket astatine .618 Fib. That led to a 53% correction earlier the Covid Crash took it down much than 70% from the .618 Fib.

Source: Keith Alan – Material Indicators

At this stage, I’d beryllium amazed to spot a downside determination that heavy without the assistance of a Black Swan, but we are presently having immoderate enactment with the Golden Pocket that seems familiar. While it is tenable to expect immoderate absorption entering and exiting the Golden Pocket, determination is 1 precise weird twist to what we are seeing and that is simply a unusual signifier I’ve noticed occurring connected oregon astir December 17th. Every twelvemonth since 2017 determination has been a determination connected December 17th that had Macro implications. The lone objection to that is past twelvemonth erstwhile it happened connected December 20th. On each juncture the terms enactment led to a macro breakout oregon breakdown. It’s excessively soon to archer if this determination volition validate the signifier connected the time of penning (Dec 19th), but connected the 17th we saw BTC get rejected from the little extremity of the Golden Pocket and besides suffer the 21-Day moving average. Price has been flirting with some of those levels ever since truthful we’ll person to hold to spot however it plays retired implicit time. Aside from those things I’m watching the upcoming ETF model precise closely. I deliberation that the marketplace is numb to SEC delays connected these decisions, but determination is truthful overmuch anticipation that this clip we’ll spot an approval, that a level retired rejection has the imaginable to beryllium the catalyst that triggers a correction. 

Regardless of wherever you broadside connected whether we are oregon are not successful a confirmed bull market, we’re seeing a batch of grounds that if we are not successful it, we’re adjacent to it. If you’re a agelong word capitalist and you haven’t already started gathering a position, it’s a bully clip to place immoderate targets to commencement scaling into one. This of people depends connected your clip skyline and hazard appetite, but if you person a agelong word outlook and 6 fig targets for BTC it’s inactive aboriginal capable to get in, but it’s besides a bully thought to prevention immoderate adust pulverization for a correction due to the fact that successful my opinion, it’s not a substance of if it volition come, but when.

Despite the ongoing statement betwixt bulls and bears implicit whether oregon not we’ve been successful a bull market, I tin accidental that contempt the uptrend, determination has been nary wide confirmation that we’ve been successful a bull marketplace done astir of the year. However, the information that we’ve precocious started to spot much organization sized bid ladders coming into the bid publication on with the on-chain information that indicates much wallets holding for longer and the caller buying aft the R/S flip astatine $40k are indications that we whitethorn beryllium connected the verge of a breakout.

There’s nary uncertainty successful my caput that a batch of the momentum we’ve been seeing is related to the adjacent ETF determination model opening January 5-10 and the April 2024 Halving. The FED’s caller determination to intermission complaint hikes and hint astatine a pivot to cuts successful 2024 surely added substance to that momentum that pushed terms supra $40k. In emblematic crypto form, we besides had immoderate assistance successful precocious October done aboriginal December erstwhile I noticed immoderate acquainted patterns successful the bid book. I can’t corroborate with implicit certainty if it was the Notorious B.I.D. spoofer we saw successful Q1 returned, but it was the aforesaid crippled I identified done Q1 being executed and determination is nary question that it helped propulsion terms up done the $35k – $40k scope earlier it disappeared.

(…) As overmuch arsenic I’d similar to spot a correction travel earlier we get determination (the Bitcoin spot ETF decision), the marketplace doesn’t attraction what I want. I would expect it to travel earlier the Halving. Whether it comes earlier oregon aft the ETF determination model closes remains to beryllium seen. In the meantime, I’ll proceed to ticker bid publication and bid travel information and commercialized what’s successful beforehand of me.