Bitcoin: Draw the Lines However You Want

by JDH on November 20, 2021

As I write this at 7:00 am on Saturday, November 20, 2021, Bitcoin is up 3% in the last 24 hours, but down 7.7% in the last week.  Volatile, eh?

Is this the start of the bear market, or a correction in a bull market?

It depends on how you draw the lines:

Bitcoin made a new all-time high on November 11, so I doubt that 9 days later we are in a bear market.  After making a new all-time high on October 21, and then again on November 11, a pause is expected.  To add some perspective: after this week’s “crash”, Bitcoin is now back to where it was on October 28.

Time Between All-Time Highs

There were 21 days between the local tops on February 21 and March 14, then 30 days between March 14 and April 14.  Then came the crash, and the next two new highs were on October 21 and November 10, 20 days apart.

So, if we have a repeat of the pattern from earlier this year, with three all-time highs occurring between 20 and 30 days apart, we could see another all-time high by December 10.

I am on record as predicting $100,000 by the end of the year.  It is still possible if we have a run in the next two weeks.

We shall see.

I’m not day trading, so the weekly fluctuations are of minimal interest to me.  I have my position; we’ll see how it goes.

As for the stock market: it appears to be on a never-ending run, so I see no need to scale back at this point.  There will be a crash, but not this week.

That’s the update.  See you next week.

 

I know some of you are tired of my constant rantings about Bitcoin, but what else is there to talk about?  The stock market is over-hyped and continues to make new highs, but is that a story?

Gold

I will admit that gold is getting interesting.  Since the peak in August, 2020 well over $2,000 an ounce, gold corrected into a classic descending triangle.

(We can debate whether or not a descending triangle formation is a “classic”, or just a bunch of technical mumbo-jumbo spouted by “analysts” living in their mother’s basements seeing patterns where they don’t exist, but I digress).

The chart does indicate an almost 20% correction that is now only a 10% correction, and there is an obvious breakout from the downtrend line at the top of the triangle, so it may be time for gold to shine.  (Do you hate the puns as much as I do?).

The reason is obvious: money printing.

The M2 money supply has increased 37% since the start of the pandemic, so it’s not a surprise we have inflation, and it’s not a surprise that investors are moving into gold.  For those who are wondering, since 1984 M2 is up 914%.  Give it another year or two and we’ll hit money debasement of 1,000% in under 40 years.  That’s quite an achievement, eh?  No wonder people want gold.

And Bitcoin.

Bitcoin

When money is debased, you want to preserve your wealth in something that can’t be easily printed, so you invest in hard assets, like real estate, gold, and Bitcoin.

Over the last 12 months, Bitcoin is up over 300%, so Bitcoin is more than just a “store of value”; it is a new investment class.  Institutional investors are buying, and with a limited supply, the price goes up.

On November 10 a new high was made just short of $70,000, and then Bitcoin did what Bitcoin does; it corrected, down 10% in two days.

No worries.  I will be watching the $60,000 support level, and assuming it holds, I continue to expect a $100,000 Bitcoin before the end of the calendar year.

From September 21, 2021 to October 20, 2021 (one month) Bitcoin was up 70%.  Granted, September 21 was the bottom of a 14-day, 25% drop, but that’s what Bitcoin does.

So is it impossible for Bitcoin to go from $63,000 to $100,000 in the 48 days remaining in the year?  Is a 59% increase in 48 days impossible?  Since two months ago Bitcoin was up 70% in one month, it is very possible to see a 60% increase in a month and a half.

I am not married to any specific price target.  Being deterministic gets you killed.

But it’s possible, so I will take profits on the way up, but otherwise hang on for the ride.

Enjoy!

 

 

 

 

Bitcoin and Inflation

November 6, 2021

As mentioned last week, I continue to believe that Bitcoin is set up for a rocket ride.  I don’t know if it will be this week, or next week, or next month, but the spring is loaded. As I write this on Saturday morning, Bitcoin has weakened (down 6% from the high on November 2, […]

Read the full article →

Bitcoin: The Perfect Set Up

October 30, 2021

Today we could discuss the crazy Ponzi scheme that is Tesla (which in hindsight I wish I had bought) but instead, we will return to our favourite crypto: Bitcoin. As a reminder, Bitcoin is up around 117% year to date, which is kinda what we want our investments to do each year, right?  It tends […]

Read the full article →

Last Chance to get on the Bitcoin Train?

October 23, 2021

There is no such thing as a “last chance” with Bitcoin.  It goes up, and down, then up again.  Here’s what we know for sure: Bitcoin made an all-time high of just under $64,000 on April 14, 2021 Bitcoin then collapsed 56% over the next 69 days, trading down to under $29,000 on June 22, […]

Read the full article →

First U.S. Bitcoin ETF: Scam and Opportunity

October 16, 2021

As I write this on Saturday morning, October 16, 2021, it appears that the first U.S. Bitcoin ETF will begin trading in the next few days.  The ProShares Trust will be the issuer.  Of course, Canada already has crypto exchange-traded funds, including QBTC and QETH from 3iQ, and the Purpose Bitcoin ETF, so it’s nice […]

Read the full article →

Happy Thanksgiving (and some thoughts on Bitcoin)

October 9, 2021

Bitcoin dropped 56% in 69 days between April 14 and June 22. So, if you bought Bitcoin at the peak on April 14, you are down 15% as of today. But Bitcoin has bounced back up 39% in the last 17 days.  What does that tell us?  Bitcoin is volatile. Since January 1 Bitcoin is […]

Read the full article →

SPY Failure, Bitcoin Winner

October 2, 2021

S&P 500 Two weeks ago I presented my Dubious Speculation on the S&P 500 Index.  I said that it appears to bottom around the 17th of the month, and then go on to new highs.  The strategy was simple: buy at the lows, sell at the highs. As you can see from the updated chart, […]

Read the full article →

Dubious Speculation: The Result

September 25, 2021

Last week I presented my dubious speculation on how the market would play out.  Specifically, I showed this chart: I said: I have marked on the chart the low points for the month, which occurred on May 19, June 18, July 19, August 19, and September 17 (presumably because September 19 is a Sunday).  If […]

Read the full article →

Dubious Speculation

September 18, 2021

Before we get to some dubious speculation, a comment about the market in general: Kinda manipulated, eh? I have marked on the chart the low points for the month, which occurred on May 19, June 18, July 19, August 19, and September 17 (presumably because September 19 is a Sunday).  If the last four months […]

Read the full article →