I know as I write this that it sounds counter-intuitive, but I would actually be happier if Bitcoin dropped still further in price this coming month. And I believe it will. Bitcoin dominance peaked and is retracing, as price does. Patterns from previous history suggests that price needs to return to meet the 21 weekly moving average – one more last retrace back down to about $7000, worst case scenario, and then off to the races. I would be happy with that.
He stoops to conquer
It would actually be healthy to have this pull back, so that we can gather up steam to push on upward. It also means we can buy back in at lower prices during that accumulation phase. Intuitively the consolidation of price around $7-8 000 should last a month or so, for example, giving us plenty of time to just buy. Then, come August or September, price can start climbing up toward $15 000, and taste the rarified atmosphere of those dizzy heights not seen much before in history, except maybe for a few days back at the past bull rally on the way up to $20 000.
Halving 3.0 incoming
Last year there was a definite tendency for price to alternate between bearish months and bullish months, one after the other, so after a bullish several months since April, we may even see more than one bearish month ahead. That being said, history alone is not enough to base our predictions on. There is also the fact that the “Halving” is coming up in late May 2020, so price has time to slump, climb up higher, and then slump again before then. Usually traders are selling the news, selling their Bitcoin a month or more before the actual halving itself. And they are selling to new retailers who are just coming in now. So price will climb until a month or two before the halving and then start retracing already as smart money sells some time before the halving arrives.
What’s up with Litecoin LTC?
Talking of halving, with Litecoin about to have his own halving in a month or so, is smart money already taking profit and keeping the price range-bound while Bitcoin makes the most volatile moves? Nobody knows for sure. Price has been known to start dipping some time before halving date, and this is how it looks for Litecoin, particularly as Bitcoin steals the show – up until now. Come on Litecoin bulls, you can do it. One more pump, gimme just one more pump, up to $170, would be great. As Phil Collins sang:
“I can feel it coming in the air tonight, hodl on”.
He was the drummer for the band Genesis, and Bitcoin has come a long way since the Genesis block of 2009. There is no going back now.
Halving means doubling
Ironically it is the halving of the Bitcoin production that will double the price next year. And we are approaching that point now, day by day, as you can see in the current uptrend. Traditionally each of the past two halvings have spurred on a major bull run. As less are produced, and the exact amount is known and becomes scarcer, demand will outstrip supply and push price to the new ATH. That has been the pattern and Bitcoin is cyclic and seems to like moving in patterns, much like nature, with its seasons.
Altcoin season
Now, as Bitcoin consolidates back at $10 000, we are all expecting altcoin season to have its day in the sun, but Bitcoin refuses to lie down and is back up at $10 800 as of writing this. What a beast. You can’ keep a good coin down. And the 21 weekly moving average is looking further and further away all the time, way down at $6 500 or thereabouts. Price has already hit the 21 daily MA and then pushed back up over the past 24 hours, going below the $10 000 psychological barrier earlier today, only momentarily, before climbing back upward. The alts are taking the brunt of the moves though, all way down in Satoshi value, compared to BTC.
Crypto maximalist
I know some people are Bitcoin maximalists and suggest 80% of your portfolio should be in Bitcoin and only 20% in altcoins, and they may be right, but there comes a time, a season, as the Bible says, for everything. There is a season to be cheerful, and a season to be rekt, a season to sow and a season to reap profit. And sometimes it pays to invest in alts with the specific purpose of accumulating more Bitcoin when you sell. You just need to time it well, and not get “married to your alts” as one expert trader and TA specialist once said.
When Half the Bitcoin mining is better than double
Well, I’m no expert, still learning by the day, but if Bitcoin goes through its halving in less than a year from now, we should expect to see this current bull run keep climbing until then, so this is just the start. At the halving, Bitcoin’s inflation reduces to a mere 1,8%. Gold in contrast averages around 3% inflation, so in theory Bitcoin will officially become more scarce than gold by this time next year. Don’t say we didn’t warn you. The signs were there, it’s in the air tonight. There is no currency quite like Bitcoin, no other store of value. It is a new entity unto itself, with a law of deflation unto itself, thanks to Satoshi Nakamoto and his written code. They should erect a statue to the man – and they would - if we only knew what he looked like, that is.
