Bitcoin [BTC]: This Happens EVERYTIME In Crypto.

Michael Pizzino

Market Overview

The macro thesis for higher Bitcoin prices remains on track, but the market's path to getting there is uncertain. Bitcoin is less than $5,000 away from making new all-time highs, which could lead to a surge in narratives claiming that the price will never go down.

Total Market Cap Analysis

  • The total market cap is currently in a "washing machine market," churning around without clear direction.
  • A short-term trend line and 50% level at around $3.5 trillion need to be surpassed for confidence in higher prices.
  • Sustained price action above this level could indicate a retest of new cycle highs.

Bitcoin Analysis

  • Weekly Timeframe: Bitcoin looks extremely strong, having broken above previous resistance levels and remaining on top.
  • Daily Timeframe: After a short-term rejection, Bitcoin saw a low-volume rally that was rejected at the 50% level. Breaking above $104,000 with sustainable price action could indicate a move towards old highs.
  • A short-term sign of weakness would be closes and lower highs beneath around $102.

Market Narratives and Cycle

  • The crypto market, like other financial assets, is subject to cycles of boom and bust.
  • Narratives at market tops often claim that the price will never go down, leading to over-leveraging and eventual correction.
  • Historical narratives include Bitcoin being the next internet, digital gold, a safe haven, and inevitable, often accompanied by institutional interest and adoption stories.
  • The current cycle's narratives include the US Strategic Reserve and institutional allocation, which could lead to a surge in prices but also beware of the potential for a crash.

Conclusion

  • The market structure suggests higher prices, but beware of narratives that claim this time is different.
  • End-of-cycle moves can be parabolic, and with Bitcoin close to breaking into new all-time highs, the market could see an explosive move.
  • Gauging where people are in the cycle is crucial for trading and investing mindset.