Happy Sunday!
A few days ago, I saw a social media poll that asked whether people think bitcoin’s most recent upswing from $40k to $55k is a bull run, bull trap, or too early to tell.
63% picked either bull trap or too early to tell.
Either we have a lot of people in disbelief that bitcoin’s price can go up from here or the poll’s respondents were excessively bearish.
At this point, for reasons I’ve shared for several weeks, you’re going to really have to strain to make the bear case. I talked about this in more detail in my update from October 6, 2021.
It was already a stretch to say bitcoin went into a bear market earlier this year. That case was purely semantic—it was based on your personal definition of “bear market.” We didn’t see the types of price patterns, trading behaviors, or on-chain data we saw during any previous bear market. At the same time, that didn’t mean we had to stay in a bull market.
Since bitcoin’s price bottomed on June 22, 2021, it’s gone up for the past 110 days. It went down for only 69 days after April’s peak. If going down for 69 days triggers a bear market, does going up for 110 days trigger a bull market?
On top of that, we have a higher low, higher high market structure and on-chain metrics scream “strength.”
Does that mean supercycle, $100,000 bitcoin in October, $288,000 bitcoin by the end of this year?
We shall see. As of today, any price down to $29,000 or up to $120,000 would seem normal, though I’d certainly start to worry should the price go near either of those extremes in the coming weeks.
I still expect we will get a result similar to what we’ve seen in the past when bitcoin has shown similar on-chain behaviors and price movements. In that case, bitcoin’s price will continue to roughly follow the path I squiggled on September 4, 2021:
That means a new all-time high in November, perhaps late October or early December. It’s about a two-month swing if history repeats itself.
Premium subscribers, I’ll keep you posted on that, altseason, and whatever else I see as we move forward.
Read below for some news and notes that you may enjoy.
Another video from Alessio Rastani, one of my favorite YouTubers. In it, he talks about the importance of keeping the news out of your analysis. Watch the video below.
Often, the news is correct—but without context to apply that information to useful decision-making. The news reports facts, not perspective. Facts only tell part of the story.
For example, this summer, the news reported Chinese miners sold their bitcoin. That’s unquestionably correct and true.
The news did not say ALL Chinese miners sold ALL of their bitcoin. Many did not. In fact, miners as a whole sold far, far more bitcoin from January to April than from May to July.
The news gives you facts and stories, not analysis and perspective.
Anyone Seen Tether’s Billions?
Bottom line: nobody knows how Tether can have so much money in their possession without that money showing up somewhere in the traditional financial system.
My take: and your point is? We know from USDT disclosures that it has a lot of commercial paper, short-term notes payments, and similar cash equivalents. So does almost every business and bank on earth. Of all the things that can crush the crypto market, USDT falls near the top, but I can’t worry about USDT’s solvency any more than I worry about the solvency of the currency it emulates or the businesses that use that currency.
Why we care: we need to always keep this risk in the backs of our minds but also not psyche ourselves out. You can only imagine how devastating it would be if USDT collapses, but it’s just one of many serious risks you take when you put money into this market.
I’m a little skimpy on the content this week. If you’re new, make you sign up for DAN Teaches Crypto.
It’s free and you get all sorts of useful information about everything related to crypto—buying, sending, receiving, staking, borrowing, lending, DEXs, traditional exchanges, and pretty much everything else, packaged into easy-to-follow videos and handy links.
I get nothing for telling you about this. I mention it here because DAN Teaches Crypto answers a lot of the questions you might have and does so better than I can.
Relax and enjoy the ride!
Weekend Rundown - October 10, 2021