That IS a good metric that I didn't know was a metric.
There was a big piece of the recent bull run that was discovery-fueled and unsustainable parabolic growth. While great for profit taking, it definitely had to correct.
If BTC is to make its run toward 80k and 100k like to many folks are calling for, it definitely had to recharge, shake out the bears, give the next wave of investors a good entry point and cool off from the white hot FOMO.
I LOVE sideways action and 30-40k is a nice little 20% scalping channel if you are right.
Big thanks to @frankbacon for rehiving this as I would have surely missed it! Well met.
Excellent Analysis! TY for engaging!
@dana-edwards has for years Been great at explaining nuances that go uncharted by the masses... And the pickleman is no slouch ✌❤😎🥓
Most people think sideways action is bad but you have to understand the psychology of the market. Bitcoin is here to stay and is being shoveled into retirement accounts. In fact, the smarter retail investors are dollar cost averaging with the goal to use their salaries to increase their percent of Bitcoin within their portfolio. The speculators who are trying to get rich are not buying Bitcoin as much because Bitcoin even if it goes to $100,000 from here is not going to make people rich in the way alts can. So you can get a tracking of retail interest by looking at the decline of Bitcoin dominance and when that is going down it indicates retail interest is picking up in correlation typically.
Institutional interest hasn't stopped either. If institutions have decided to allocate between 1 and 5% of their portfolio it is going to take months to do that. If prices get cheaper they can just get a better cost basis. My guess is what happened here is China/environmental concern FUD, tax season, over leverage by speculators. I have not seen any dramatic changes in the fundamentals or in the macro market with regard to inflation.
So this means money has to go somewhere. If everyone is going to cash out where would it be going? My guess is people cash out to pay taxes or pay bills. Taxes make the most sense because if you traded you had a lot of capital gains. I expect a lot of buying to take place in the 30 to 40k range. I think 25 to 30k is absolute bottom which we are unlikely to hit. I think 30 to 40k range trade is what we are likely to see for another week or two as money flows back in. I think in a month from now Bitcoin will be in the 40 to 50k range again.
This gives institutions and retail a month to buy in at decent prices. And if we are lucky we might get a whole summer of sideways movement and alt season in the 40 to 50k range.