Cryptocurrency Christmas Special with Important Indicators: Past, Present and Future

No one is arguing that 2022 will be nothing but a bear market. After Bitcoin reached its ATH in November 2021, we saw a bear market develop in classic fashion by losing support at key technical levels. While the weakness played out in a somewhat predictable manner, the market was caught off guard by the events that led to the FTX crash in November 2022. That’s because the FTX contagion had a devastating ripple effect that was felt by the largest institutions with exposure to cryptocurrencies. Not only the banks actually expected prices to go lower.

Fears and fighting among institutional players such as Galaxy, Gemini and Grayscale (under DCG), which were among the biggest institutional victims of SBF at the time, added to fears that the price would fall below 10%. On January 1, 2023, Bitcoin began its rally. What was first considered a weekend whale game evolved long after the weekend, and in fact it wasn’t until the first quarter of 2023 that I identified what I nicknamed the “Notorious BID” on FireCharts. This entity doubled down on large blocks of bidding liquidity to drive the price up. There was a pattern to the behavior that made it somewhat predictable and tradable. These movements are well documented on my X feed during that period. Once the price reached $25,000, the object was gone. Even without the help of manipulation to raise prices, and despite the fact that the macroeconomic situation was dire, the geopolitical situation deteriorated further and the American political situation developed from a dysfunctional show into a full-fledged circus. The market continued to rally.

Now, almost 12 months and more than 150% later from the day the rally began, the debate between the bulls and bears over whether this is a confirmed bull market or a series of bear market distribution rallies literally continues to this day. It’s understandable that someone might see 150% and immediately assume a bull market, but a deeper understanding of what distribution and accumulation looks like is needed. In my opinion, it’s still not as clear as expected. Historically, the purple whale class, with orders in the $100K to $1M range, has had the greatest impact on BTC price direction. The order flow data I’ve monitored on Binance shows that throughout the year, they (along with larger MegaWhales) have been buying dips and then distributing much more than they bought on dips following the uptrend.

Only recently have we seen an uptrend that could be a sign that the trend is changing. In parallel, some on-chain data providers are reporting that the number of wallets holding BTC is increasing, indicating that we may be moving from a distribution phase to an accumulation phase, and we are looking for clearer evidence of this. . One of the things I look for to understand this is bid liquidity. I believe “Liquidity = Emotion”. It’s no secret that orders are low on both sides of the price throughout the year. However, in the last three weeks or so we have started to see more institutional scale bid ladders coming. It’s written into the order book and that fact supports the bullish argument unless they dump at the next pump.
Keeping all of the above in mind, there are most definitely changes and twists and turns that investors should be aware of. Of course, inflation and unemployment in the United States have begun to improve to some extent, but the contents of the report do not correspond to reality. For most middle- and low-income Americans, credit card debt is at record highs, rents have skyrocketed, homeownership is out of reach, grocery prices are high, and a Metallica “standing room only” field ticket costs $575. So I think we still have macroeconomic problems and the geopolitical problems and political problems in the United States seem to be getting worse by the day.

Aside from that, RSI has been overcooked for a long period of time and has been marked by eight consecutive green weekly candles. Both of these factors have historically led to corrections. I tell you, “History does not have to repeat itself…”

Another potential reversal to consider is that the current PA is strikingly similar to the first leg of the 2019 rally, which turned out to be a Fib retracement. This was ultimately rejected above the Golden Pocket at .618 Fib. This led to a 53% correction before the corona crash caused a drop of over 70% at the .618 Fib.

I would be surprised if we see such a deep decline without the help of Black Swan at this stage. But now we’re having some interaction with a Golden Pocket that looks familiar. While it is reasonable to expect some resistance going in and out of the pocket of gold, there is one very strange twist to what we are seeing and that is a strange pattern that I noticed on or around December 17th. Since 2017, there has been a movement with macro impacts every year on December 17th. The only exception is the incident that occurred on December 20 last year. Each time, the price action led to a macro breakout or collapse. It is too early to say whether this move will validate the pattern at the day of writing (December 19), but on the 17th we saw BTC being rejected at the bottom of the golden pocket and also losing its 21-day moving average. Price has been interesting at both levels since then, so we’ll have to wait and see how it plays out over time. Aside from that, I am watching the upcoming ETF window very closely. I think the market is numb to this delay in the SEC’s decision, but there are so many expectations that it will be approved this time that an outright rejection is likely to be the catalyst that triggers a revision.

Whether we are in a solid bull market or not, we are seeing a lot of evidence that if we are not in a bull market, we are close to one. If you’re a long-term investor and haven’t started building your positions yet, it’s a good time to identify some goals to increase your size. Of course, this will depend on your time horizon and risk appetite, but if you have a long-term outlook and six-figure goals for BTC, it’s still early enough to get in, but it’s also a good idea to save some dry powder for a correction. In my opinion, it is not a question of if it will come, but when.

Despite the ongoing debate between bulls and bears over whether we have been in a bull market or not, it is safe to say that despite the upward trend, there has been no clear confirmation that we have been in a bull market all year. However, the fact that we are starting to see more institutional-sized bid ladders coming into the order book recently, with on-chain data showing more wallets holding for longer and $40,000 buying after the R/S flip, suggests that the next Same as: It suggests that you may face a crisis.

There is no doubt that much of the momentum we have been seeing is related to the next ETF decision period on January 5-10 and the April 2024 halving. The FED’s recent decision to pause rate hikes and hint at a transition to cuts in 2024 has certainly added fuel to the momentum pushing prices above $40,000. In general cryptocurrency form, we got some help when we noticed some familiar patterns in the order books from late October to early December. I can’t confirm for sure if that’s true. The infamous BID spoofer seen in Q1 has returned.But it was the same game we saw through its Q1 run, and there’s no doubt that it helped push the price through the $35,000 – $40,000 range before it disappeared.

(…) As much as I would like to see a correction happen before we get there (Bitcoin spot ETF decision), the market is not interested in what I want. I expect it to come before the halving. It is not yet known whether this will happen before or after the ETF decision window closes. In the meantime, I will continue to watch the order book and order flow data and trade what is in front of me.