Bitcoin…is the bear market over and done with!?
Has Bitcoin found its bottom and its time for accumulation mode to go into overdrive!?
These questions or ones like them are on the top of every crypto investor's mind.
Well it’s time to start getting them answered because decisions near the bottoms of bear
markets can make or break a portfolio.
You gonna make it or are you gonna break it…because it’s time for Chico Crypto!!
Well there is no doubting we have been in the midst of a rally….checking out the Bitcoin
price after the capitulation dump down to 17.5k, we can see the price has stutter stepped
it’s way back to 25k, with a series of higher highs and higher lows.
So what is the deal?
Are we breaking into accumulation before the bull or is this just a standard “bear market
rally”?
Well let’s take a wholesome view and look at both sides of the coin.
So to begin….we have moved out of the bear and into the Bitcoin accumulation zone.
Well there are some charts and stats out there which are hopeful that this is the case.
Comparing the 2018-2019 downturn, calm before the storm, and the then final capitulation
and bottom with what has happened this cycle in …the two are very similar.
Now a Titan of Crypto on Twitter dives deeper into this, including previous cycles and a
certain indicator.
They said “Bitcoin BOTTOM confirmed?
Historically it took 8 weeks on average after a bottom was in for Log MACD to cross bullish.
If we consider June's low as the bottom, it's been 8 weeks since then and weekly Log MACD
is about to cross bullish again.
GOT DAYUM Tyler.
You showed me a couple charts and a technical indicator…bull market is back on!!
I know, I know this isn’t full proof evidence we are out of the bear woods…but there are
a few more indicators flashing.
Like the Puell Multiple.
This indicator explores bitcoin market cycles from a mining revenue perspective as The Multiple
is calculated by dividing the daily issuance value of bitcoins (in USD) by the 365-day
moving average of daily issuance value.
Looking at the multiple when it gets high and into the red this indicates that current
miner profitability is high compared to the yearly average.
As such, there is incentive for miners to liquidate their treasuries, and sell pressure
should be coming.
As we can see, high values and getting into or near the red has also signaled the top
for every Bitcoin cycle.
But the opposite is true for this multiple.
Low values indicate that current miner profitability is low compared to the yearly average.
Income stress may become a factor for some miners, and they may need to start reducing
hash-power by switching off rigs.
This increases the hash-share of remaining miners who can then sell fewer coins.
Checking out when the indicator has gotten into the green, oversold area…historically
it is followed by a few months of consolidation.
In previous hits of this green area, Bitcoin has never fallen back into the oversold area
within 6 months of officially breaking out of it.
So do we have 6 months of breakout coming?
Well what about the Guppy Multiple Moving Average-GMMA?
This a technical indicator that aims to anticipate a potential breakout in the price of an asset.
The term gets its name from Daryl Guppy, an Australian financial columnist and book author
who developed the concept in his book, "Trading Tactics."
The GMMA is a trend-following technique composed of 12 EMAs or exponential moving averages.
The 12 EMAs are separated into two groups:A “short-term” group of EMAs & a “long-term”
group of EMAs.
Short term EMA are usually green, while long term EMA are usually red.
The crossover of the short- and long-term MAs represent trend reversals.
If the short-term crosses above the long-term MAs, then a bullish reversal has occurred.
. Conversely, if the short-term MAs cross below the longer-term ones, then a bearish
reversal is occurring.
Well looking at this chart, we can see in this cycle the red crossed the green…indicating
that we were going into a bearish reversal…which happened, and the green hasn’t crossed back
over the red since.
Wait…isn’t that bearish that means the trend is still bear…well yes it does but
then it doesn’t?
Zooming out, and adding their tweet…a Moustache, el_crypto_prof on twitter pointed this out.
He said “Bitcoin - Bottom Indicator.
Everytime green GMMA-Guppy Multiple Moving Average crossed red GMMA and BTC held the
200 Weekly Moving Average, the bottom was in for BTC + the price went parabolic thereafter.This
happened in: 2015, 2019, 2020 and 2022…
But technical indicators aren’t the only indicators that things are starting to flip
bullish for Bitcoin.
On-chain indicators are showing similar things.
Bitcoin officially crossed 1 billion total addresses used.
And it seems people around the world are using this downturn to accumulate.
The number of people who own a full bitcoin or more, just reached over 1 million people!!
But remember, I said we will look at both sides of the coin.
We just looked at indicators for a bull, now let’s switch to the BEAR…why it’s possible
we may go back down…but before we get into that….But first it’s time for a sponsored
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Now back to the bear case for Bitcoin.
Everyone should know, Bitcoin moves in cycles…bull cycles and bear cycle drawdowns.
And if we have already hit the Bitcoin bottom back on June 18th…this would be the shortest
bear market in the history of Bitcoin…
From this chart we can see historical Bitcoin bear market drawdowns.
After the 1st halving cycle, the green line, we can see it took 411 days for the bottom
to come, and it was a drawdown of 85 percent.
After the 2nd halving cycle, the blue line, we can see it took less time, only 364 days
to hit the bottom, but a similar drawdown of 84 percent.
For this cycle, if June 18th was the bottom at about 17.5k, then this would have only
been 221 days with a drawdown of 74 percent.
Now the difference between the lengths of the first 2 cycles, 411 days first, 364 days
second was just 11.5 percent.
The difference between the lengths of the 2nd and this cycle, 364 second and 221 this
one, is 42 percent.
Now, I know bear markets are getting shorter, but a 42 percent difference this time, compared
with just 11.5 percent the 2 cycles before…is major.
And speaking about previous cycles, Bitcoin dominance…has been getting crushed lately
down to below 40 percent.
This would be the first cycle in which Bitcoin dominance wasn’t pumping towards the end
of the bear…in past cycles it has reached over 70 percent before we entered another
explosive altseason.
So what could put an end to this rally?
What could be the catalyst putting an end to this bear market rally?
People need to realize this…Bear market rallies will go higher than you think, to
the point where you will start thinking that the bear market is over….
Well we need to speak about those Mt.
Gox coins getting released at the end of the month.
Now with the Mt.Gox hack which happened all the way back in 2013 they recovered 200,000
Bitcoin back to the users. 24,000 of those coins were sold in 2017.
End of August, 137,000 will return to the users worth over 3 Billion.
The average buy in price from the users?
Just $300 per coin.
At today's prices, users are up 6500%.
They were forced to HODL…and no they have the ability to DUMP those BTC.
I think some of them, upwards of 30 to 50 percent of users will take advantage of those
gains and dump the BTC…
For a lot of them, it’s life changing money, that they haven’t had access to for almost
a decade.
Many are going to want to change their life, and that is going to cause a bunch of unwanted
sell pressure out of nowhere.
So my friends…I wish I could be the one who tells you what’s going to happen in
the short term…but I am a long term investor and these short term movements won’t matter
in the big scheme of things.
This could be just a bear market rally…but we are near the bottom and accumulation during
these times is all I’m thinking about.
Cheers I’ll see you next time!