As many of you already know, I don’t often trade crypto, but I watch Bitcoin like a hawk because it has turned out to be a terrific reflection of systemic liquidity. It can sometimes warn us of impending disaster because if dollars become needed above all else (in a liquidity crisis), Bitcoin is often the first to go.
Now, I have played with various bearish alternatives on this instrument for some time, expecting it to move lower, but ever since January 24th, it’s only moved up and to the right. And while that may give us a “bear flag,” if equities were on the verge of a 10% collapse, I would expect this “flag” to already have broken down. And it’s just not. Now, if it does, I will be listening loud and clear, but, it may actually simply be undergoing re-accumulation.
A few weeks ago, someone noted that long-term Bitcoin holders (long-dated, large, “whale” wallet addresses) were sitting tight, not selling. And that it was the short-term, smaller wallets, in which all the transactions were taking place, and they were selling. I can’t find the website he used to track that information, but if I can remember it, I will share it in a later post.
But, it looks like whales are in no mood to get rid of it here, and even want more of it. And that should be something we wouldn’t expect to see before a massive dump to $SPX 3700.
Maybe all the laser-eyed kids are simply just all gone?
I mean, I sort of actually feel that on Twitter, too. I mean, all the traders, especially the young kids with all the bravado; it’s felt to me sort of like they’ve all left. I can detect that to a degree because of my having a large account, and the kind and number of responses I get. It’s quiet, and has been for months now. I sort of think retail might all have already been destroyed here.
Think of the stocks they liked: all the meme-ish things. Hell, most of those are down 70%+.
At any rate, looking at the chart, people are mostly counting Bitcoin as needing to head lower from here, but I’m no longer convinced that’s going to happen. One thing I’ve noticed over the years with counting wave structure is my one complaint about most of the Elliotticians out there: they’re too eager to label waves in “textbook” fashion, and the market rarely gives us such textbook structures.
And you guys have all seen me use variations that I think few are looking for. Hell, I sometimes think that 50-60% of the time, we’re in triangles, and I almost never see anyone count triangles out.
But, at any rate, much like the indices, Bitcoin is an excellent candidate for a very strange “flat” here, which could be done at any moment. It’s recently just reached a fib relationship between what I’ve labelled here as primary (pink) A & C, and any fib relationship in a flat will do.
So, my point is, the vast majority (all that I know of in fact) of Elliotticians are now looking for this to move sharply lower, taking out the 1/24 low. And that would point to a liquidity rush to the exits. So, they’re also carrying similar counts for the indices. They expect everything to do that here. But I must insist: my greatest trades have been precisely when I’m looking where too few are looking. I can tell when one side of the boat is crowded, and this is the most extreme example I’ve yet seen.
But I am very skeptical of that consensus right here. And so, much like I believe the US indices are in a flat, hopefully done now after today, Bitcoin may be, too. And if it is, there’s not enough evidence pointing to a big crash, but rather quite to the contrary: if this count is correct, it will go on to make new all-time highs.
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