What happens to Bitcoin after 7 green candles? Hint: It’s NOT Bullish.
Crypto Corner #294 | March 29 - April 5, 2024
Bitcoin Price (in USD): $67,940.01
Weekly Change: -4.24%
Bitcoin Price Action
Last Sunday, something happened in Bitcoin that’s never happened before, the biggest crypto completed seven (7) consecutive green months in a row. Looking over past bull markets, there has never been a time where Bitcoin closed green seven months in a row, however there have been five and six.
Let’s see what happened:
2013: 6 green months followed by a -75.71% pullback in 91 days.
2017: 5 green months followed by a -37.63% pullback over 31 days.
2019: 5 green months followed by a -53.06% pullback over 153 days (this does not when include the -81.97% drawdown from June 2019 to March 2020’s Black Swan Event).
2021: 6 green months followed by a -55.93% pullback over 92 days.
There’s no guarantee anything like this will happen this time, but history rhymes. It’s all worth noting that all four of the above scenarios didn’t occur in a crypto winter; they happened throughout the course of a Bull Market Cycle for Bitcoin!
PLEASE NOTE: These scenarios are not a reason for fear. They’re the reason to make sure you have a buying plan. As always, my approach is to prepare for all possible scenarios in Bitcoin (including it going to zero) and designing a plan – in advance – to account for any outcome.
The Bullish Case
Bulls believe the bounce Bitcoin saw on Thursday could be an indication that the selling is done. The inflows into the Bitcoin ETFs have been positively massive… even during the recent drawdown there inflows not outflows. If demand maintains, the upside potential is very much there as the sellers become exhausted.
The Bearish Case
While Bears acknowledge the near-insatiable demand for Bitcoin – both spot and through the ETFs – Bears make the legitimate argument that the buyers could become exhausted. With so many new investors in the space, Bears argue that one could -20% drawdown in Bitcoin – typically, a very common occurrence in crypto – could be enough to shake the weak hands out and create a selling cascade.
Bitcoin Trade Update
Current Allocation: 2.467% (+21.35% since Last Update)
Current Per-Coin Price: $68,619.29 (-1.83% since Last Update)
Current Profit/Loss Status: -0.99% (-2.49% since Last Update)
When Bitcoin rallied into the end of the quarter, I took that as an incredibly bearish sign and substantially reduced my exposure.
I made a total of 20 separate sale orders which left me with an average selling price of $70,591.56 (after fees). The sales lowered my per-coin cost just -0.32% from $69,899.46 to $69,676.70, but, more importantly, decreased my allocation -24.59%, down from 2.033% to a more risk-adverse 1.533%.
And, then… Bitcoin started to selloff after the start of the month.
My buys kicked nearly immediately, and over the course of the week, I made a total of nine buys with an average buy price of $66,950.09 (after fees). The buys lowered my per-coin cost -1.52%, from $69,676.70 to $68,619.29, and increased my allocation +60.93% from 1.533% to 2.467%.
I substantially increased the quantity I buy at each level, so despite the number of sales I made last weekend, I was happy to end the week net-positive, owning more Bitcoin (at lower prices) than I did for last week’s update.
Bitcoin Buying Targets
Using Moving Averages and supporting trend-lines as guides, here is my plan for my next ten (10) buying quantities and prices:
0.067% @ $66,211
0.067% @ $65,259
0.133% @ $64,580
0.167% @ $63,282
0.167% @ $62,507
0.167% @ $61,820
0.167% @ $60,854
0.333% @ $60,330
0.333% @ $59,016
0.333% @ $57,651
Disclaimer: Eric “Irk” Jacobson and all other Get Irked contributors are not investment or financial advisers. All strategies, trading ideas, and other information presented comes from non-professional, amateur investors and traders sharing techniques and ideas for general information purposes. As always, all individuals should consult their financial advisers to determine if an investing idea is right for them. All investing comes with levels of risk with some ideas and strategies carrying more risk than others. As an individual investor, you are accountable for assessing all risk to determine if the strategy or idea fits with your investment style. All information on Get Irked is presented for educational and informational purposes only.