Let’s Check In on Bitcoin

Let’s check in on our liquidity thermometer. If there’s a dash for liquidity, Bitcoin won’t survive that, so if stocks are going to swoon, this will with them.

Now, previously, I saw a good impulse wave down, and a retracement. If that’s a 1-2 down, we should be entering a 3rd wave down next, and it should be a real doozy.

And with the CPI print, it did fall, but as I’ve been beginning to warn, we’ve not fallen enough.

If it’s a 1-2, say in orange, as below, the 1-2 in the next (lower) degree (green in this case) needs to break the prior low. Green 1 should be way down there like this:

BTC

And it’s not. That’s a big red flag.

We don’t really want to try to do this:

BTC

If we do, we’re now labelling higher lows an impulse down, which isn’t a great idea. It’s possible that it’s a nest like this, but really, the characteristic of an impulse wave is that’s it’s motive, i.e., it’s really moving in the direction of the count. It’s best for the next “1” to be lower than the first “1.”

The alternative is the idea I suggested as a possibility before (e.g., 5th chart here): we’re going to have a rally. Very unlikely to take out the all-time high, but a big rally is possible.

Could be this:

BTC

Could be a leading diagonal up, for a “1” (in orange), followed be a “2,” back, and we’re actually entering a 3rd up, like we might be in the S&P (here). It’s looking sort of strong this weekend. We break that trend line again and I have every expectation that it’ll keep going for a while.

I don’t trade this very often (I mostly just watch it), but for shits and giggles, I’ve taken a swing long on this. Will ditch it if green A in the chart above gets blown.


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