Riding The Wave Weekly Outlook #7
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Table of Contents
Where are we Short-term?
Where are we Long-term? (Unchanged from last week)
Supporting Evidence
Where are we Short-term?
We have continued to move sideways this week (we are within $200 of the price we were at in last week’s article) without a sharp breakout upwards or downwards.
We have gradually trended upwards over the past 2 weeks from a low of $33k to a high of $39,338 but we haven’t broken through support or resistance. If we do break through the area we found support (approx $33k) we will likely continue the downtrend to $29k but I would be surprised if we didn’t hold there and reverse.
I do think it’s more likely that we pull back down to $33k to retest that support level in order for the market to build confidence. A drop to and then bounce off of $33k would help support that $33k could be the bottom helping to increase demand.
Of course, we are also seeing much higher buying from Bitcoin Whales (see supporting evidence) so I think it’s just a matter of time until market momentum catches up.
Where are we Long term? (Unchanged from last week)
I still view this drop as being similar to the 2013 Bull run. As can be seen below we saw a drop of 75% (82% if you consider the candle where it reached its all-time high instead of this later drop) before the markets recovered and began its second run.
The main difference between this market and 2013’s market is its size. As many more people are using Bitcoin now it takes a lot more time and money for Bitcoin to move up or down the same percent. This causes the cycle to lengthen (assuming this is still a bull run) which could lead to us ending somewhere in the summer if the cycle increased in length the same amount as it did between the 2013 and 2017 cycles.
Overall a longer run isn’t a bad thing as it means we will likely reach higher prices. Using our Logarithmic growth model which is based on Bitcoins growth over time we can see this (All numbers are projected based on past runs. The more likely option is scaled down from the top of the band based on how much the top decreased from the previous two bull runs):
If we peaked at the start of November of 2021 the highest we could have reached would have been $219k with a more likely chance of us reaching $150k
If we peak at the start of July of 2022 the highest we could reach would be $304k with a more likely chance of us reaching $213k
If we peak at the start of December of 2022 the highest we could reach would be $375k with a more likely chance of us reaching $264k
Supporting Evidence
The last time reserve risk was this low we were a couple of weeks into the start of this bull run.
NUPL is lower now than it was at the start of this bull run
Whales are piling in, momentum just hasn’t swung around yet
Thank you for reading the article, if you have any feedback feel free to leave and comment, and if you think anyone would benefit from the info in here please feel free to share it.