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Todayâs Big Stories: đĄ Long-term thinking âĄď¸ BTC breakout possibilities
Today's newsletter is 953 words, a 3.5-minute read.
Every Day is the Best Day to Buy Bitcoin
For most retail investors, bitcoinâs recent prices have caught them by surprise.
Sure, they had been watching the price slowly rise, but who could have expected the explosive 50% rise in price from $44k â $69k YTD.
Now you, dear reader, would be well aware of what is going on (assuming you have opened and read these emails).
Thatâs because weâve been pounding the table⌠explaining that everything that caused crypto to crash was behind us. The future was bright.
For example, on November 23, 2022, when headlines were screaming about the death of crypto, we wrote the following:
We now have proof that we donât need people like SBF to hold our hands. Why would you when DeFi does it better than him anyway?
And thank God it does, because cryptoâs mission is still crucially important.
Fiat money is still being mismanaged to the tune of hyperinflation. Governments are still weaponizing control of bank accounts to subdue protests. The financial system is still value-extractive and inaccessible to most of the world.
Lost in the sea of 2022s lousy news is that crypto has been addressing these issues. Itâs become âbasically a saviorâ in countries crippled by inflation, such as Turkey. Itâs enabled political activism in repressive regimes. And itâs growing ever more popular in developing countries.
The world still needs decentralized, transparent, and credibly-neutral money. We believe crypto will fill that void. And now is not the time to abandon that vision.
Thereâs no reason to worry too much about short-term price drops from bad actors. As crypto fulfills its mission, the prices will follow.
As we all know by now, bitcoin broke its all-time high (so we think). This happened yesterday, rising a few hundred dollars above $69,000. Shortly after, the celebrations came to a screeching halt as liquidations started to hit. Bitcoin fell 14% off the new all-time high, hitting prices not seen in three days.
But it's all probably fine, with Bitcoin recovering to ~$67,000 today⌠and perhaps gearing up for another breakout. đÂ
Analyzing Breakouts
Historically, surpassing all-time highs has been the ultimate prelude to significant Bitcoin rallies. Just take a look at these numbers @DylanLeclair_ pointed out:Â
December 2020: Bitcoin doubled in 18 days
March 2017: It took 84 days to double
November 2013: Just 10 days to double
March 2013: Another 18 days to double
Some napkin math: The average time it takes bitcoin to double after hitting a new all-time high is ~32 days.
That means if history repeats itself, we could see $132k BTC by next month.
Market Sentiment:
As weâve discussed in previous issues, this rally seems a bit muted with less hysteria overall. And thatâs because, unlike past cycles, the retail crowd doesnât seem to be doing much of the legwork. Rather, itâs the institutions via the ETFs.
This is evident when looking at several alternative data points:
Past 5Y search queries for âbitcoinâ on google
Google Trends data: Search queries for “bitcoin” are significantly lower than during previous all-time highs, indicating weaker retail interest.
Social media: Crypto Twitter and Youtube engagement surrounding crypto even seems subdued compared to previous bull runs as well.
Another under-discussed aspect of this bull cycle is the noticeable decrease in marketing spend within the crypto industry. Speaking from our own experience as publishers reliant on advertising revenue, we've observed a significant downturn in marketing budgets (Sponsors reach out here!).
With fewer promotional efforts by startups to attract new users, the potential influx of newcomers into the crypto space, and by extension, their impact on the market price, might partially explain the lack of hype.
Either way, this muted sentiment â despite us being at another all-time high â suggests a different kind of bull market, potentially driven by institutional investment through ETFs rather than retail FOMO.
Update on MVRV:Â
We canât talk about price breakouts without mentioning where weâre at on the MVRV scale. This metric, which we constantly circle back to, offers a window into the perceived overvaluation or undervaluation of Bitcoin at any given point.
Currently, the market value to realized value (MVRV) ratio sits just above 3. That means, in aggregate, hodlers are up 3x on unrealized profits. This MVRV region is historically the goldilocks zone from which parabolic moves begin to develop.
In other words, at a ~3 MVRV, weâre getting real close to a potential euphoric breakout. The fact that weâre at an all-time high and we havenât even hit an MVRV over 3.5 looks extremely bullish in the short-term.
So, what should you do? Tell all your cousins and uncles who have held the bag since the last run to keep hodling.
The retail FOMO crowd, if anything, is just starting to boil â not bubble. Crazy insanity price movement â not just new all-time highs â could be on the horizon.
SPONSOR
Buying Altcoins? Donât Go At It Alone.
With bitcoin hitting a new all-time high, weâre officially in another bull cycle.
First, itâs the majors like Bitcoin (BTC) and Ether (ETH) that go parabolic⌠Then, those returns cycle into the more lucrative altcoins. And weâre not making this up either. This is how altcoin maniaâs happen every. single. time.
But that doesnât mean you should just pick any altcoin. To make stable gains here, you have to diversify across a handful. You have buy whatâs going to be trending, not whatâs already trending.
Which is why you should watch this (or just sign up) for Weiss Ratings.
Itâs a portfolio service you can count on. Plus, theyâve just released their new buy list of 7 âundiscoveredâ cryptos. We highly suggest you check it out here.
P.S. You really donât have to do anything. Theyâll tell you what to buy. When to buy. And when to sell. So if youâre reaching for the moon, you may as well do it with a helping hand. Click here to learn more Âť
Tweet Of The Week
Dillon Newman @Dilnewm
Where is crypto trading happening?
Since ETF approval, far and away on Coinbase $COIN
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