An Update on Bitcoin

It’s been a while since I have covered Bitcoin but it’s been one of the most boring assets for months.

In a remarkable twist of “gotcha,” I was quite bullish on Bitcoin when it touched the 200-day SMA in the heart of the banking crisis and began to rally after the Fed and Treasury intervened:


That was also one signal I used to accept a very bullish view on equities, and in particular the Nasdaq 100 at the time. Bitcoin and the NDX often move in lockstep with each other.

That wasn’t a horrible idea as it was, in fact, a good rally that stuck. The gotcha moment came when I became pessimistic on it again once I could see how much resistance it faced at the most important long-term trend line, which it lost last year. That 2015-2020 trend line has governed much of the bull market on crypto. Failure to get back above that is quite grave, and there were persistent sellers there. Given that resistance, I assumed that the market was going to do poorly, liquidity in general, too.

If Bitcoin can’t summon a strong rally through that trend line, it’s still in a bear market, and things can turn south fast. Now instead, what happened is Bitcoin did, in fact, do basically nothing ever since, but equities went on this remarkable tear while this has basically not participated.

So, I still think it’s very grave that Bitcoin couldn’t move higher, but that weakness was never passed on to equities. Equities chose the extreme euphoria route. That said, I still don’t see any reason for optimism.

My expectations for the future are as follows:

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So, since I haven’t posted about Bitcoin in a while, I thought we could take a moment to discuss it tonight and this is what I think for the time being.

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