A lot of bearishness out there, people frustrated, angry, depressed (as they should). I hope I will share some hopium I come across and am personally monitoring closely. Sometimes what you see is what they make you see, but if we look at data, they are painting a very different picture. Not financial advise, but I can tell you I regret panic selling some of my coins in July low last year, when it went below 30K again and I just couldn't take it. And in hindsight, the market was giving you a great great chance to buy. Emotion is a big enemy in investing, in sports, in any competitions. So let's look at some data, data has no emotion. Not financial advise, just some hopium and hope that it could give us a different perspective on things.
PlanC - no one cares about planB now so maybe you would like to look at planC, just make sure you understand that the floor bands react to on chain data (i dont know what they are) so the floor could move down (or up), but only 0.01% of bitcoin life's time is spent below the band, 4 days in more than 10 years.(credit to u/TheRealPlanC)
Logarithmic growth floor model, basically a line (curve) of best fit everyone can draw, if we are to go lower, the longer the time it takes to get there, the higher the floor price will be because bitcoin is an asset that grow exponentially. We don't necessarily have to touch the floor, so something like the blue line scenario could happen. notice that in March 2020 we fell below the curve and bounce right back, so, however unlikely it is, if we fell below the curve again, you know what to do, but when everyone knows what to do, it probably won't happen. (like 100K moon December and religion in 4 year cycle theory)
Logarithmic growth floor model
Entity-Adjusted Dormancy Flow. Didn't really spend much time on understanding the concept behind, but I think the chart is rather self explanatory. When the indicator reach the "green zone", it corresponse to a bottom in price. And if you buy in the green zone, you pretty much make money right away when the indicator is out of the green zone and you will be making more money the months after. Pay extra attention how the indicator screamed BUY for 6 days during the March 20 COVID crash, but only screamed buy for ONE DAY at the very bottom of the 2021 May-July China mining FUD crash, one day, the day before the big reversal to 69K ATH. And we are currently in the green zone now for over 16 days, this chart is already 2 days old. Also notice that, thanks to u/wrightology calculations, average time spent in the green zone is 24 days, median is 19 days, and longest is 55 days. credit to glassnode and wrightology on twitter
Where we are now? we are more oversold than China miner FUD in 2021 and nearly as oversold as March 2020 COVID crash, and referring to the above log growth curve chart you know that March 2020 was a significant deviation from long term trend and the only time we fell below it, investors took advantage of it very very quickly to restore equilibrium price. At such oversold level, a rebound is highly likely, but it does not have to happen. But this is just some context on how bearish and oversold the market is right now. credit to u/damiencrypto99 btw for the chart
But nasdaq keep crashing? Yes they are panicing, but according to this index, we are as bearish as Mach 2020, and this index has not factored in the 2.7% decline on Friday so panic pretty much exceeded March20. People are going net short in Nasdaq and when the rebound comes, short sellers will have to cover their positions by buying back shares from the market or risk a massive short squeeze. Can nasdaq continue to drop? Yes. Can Bitcoin decouple from Nasdaq? Also Yes.
Also more hopium: Divergence in price and supply. You can see in the red box, price decline of bitcoin is consistent to amount of illiquid supply, that means long term hodlers are selling. During the consolidation phase from then till July, Illiquid supply goes up, which means people locking up their bitcoins and dont intent to move it. Look at the second green box, price is declining like May 2021, but illiquid supply continuous to go up, a "divergence" situation, suggesting some people, or many people, are accumulating and locking up their coins. They have actually been accumulating since May low of 2021 according to the data. credit to CryptoRus channel and glassnode.
What am I personally doing? I bought the dip at 43k range, and bought the dip again at 35k range. Will continue to buy at 28-34k range and have cash just in case of rare event that we wick down even lower. Should technical indicates show that we bottomed and start reversal, I will be averaging up till 48k. Have not sold a thing and most of my bitcoins are in my celsius wallet, which is generating as much as 6.2% on my bitcoin holdings, so every week, I am passively accumulating more bitcoins and those bitcoins will compound themselves and generate more bitcoin rewards for me. No matter how small the amount is, remember the bitcoin you earn today could double or triple and many X in price in the future, don't let your coin sit there doing nothing. There is certainly a risk involved, like leaving your coins on exchange or saving them in a cold wallet. You would have to decide how to allocate your coins. Feel free to DM for more discussion. Disclaimer, I am not connected to any of the influencers, twitter analyst, database or celsius. Good luck everyone, and also a reminder:
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