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Once we expanded bartering through paper “IOUs” goods (initiated by the Medici), we entered a system of trust. While a previous direct exchange without an intermediary was easy from the point of view of trust, a paper system with underlying goods held by the state became increasingly complex. In 1971, Nixon abolished the gold standard and with it, trust was challenged to the next level. Now, the dollar depends entirely on trust in the government. Trust is easy when everything is fine, but when problems arise, people start asking questions.
Overall, from 1913 to its present value, one US dollar was devalued by up to four cents only thanks to governments constantly inflating the money supply. A loss of ninety-six percent. This is only tolerated by its users as this loss is stretched over time and consequently less noticeable. With personal, corporate and government debts currently non-repayable, as inflation is far from the less noticeable two percent annually, the day of reckoning is imminent.
BTC-USDT, monthly chart, price analysis, what’s different this time?
BTC-USDT monthly chart as of November 23, 2020
Bitcoin (BTC-USD) along with Bitcoin Grayscale Bitcoin Trust (GBTC) and Winklevoss Bitcoin Trust ETF (COIN) are currently trading at the price levels last seen at the end of 2017. Back then, a whopping two-year plus duration followed the correction. Should we fear that this will happen again? No.
Looking at the monthly chart above, it can be seen that at the moment (A) the move started at $ 2,817 and ended at $ 19,798 while this time (B) the move moved from $ 3,782 to $ 18,965. This makes move A a 602% advance while move B only 401%. Movement A also developed over four months, while Movement B took nine months with two intermediate breaths (pause).
Now, as we approach these Bitcoin historical highs for the second time, this resistance is weakening and Bitcoin has also built a solid support zone below the $ 14,000 level. Concluding that the feared or for many who want to enter or re-enter Bitcoin were hoping, the retracement may never come (1). Bitcoin can certainly pull back for a healthy retracement (2, 3, 4), but most likely not very deep if at all.
BTC-USDT, weekly chart, volume analysis, healthy support:
BTC-USDT weekly chart as of November 23, 2020
It is a mistake to look at isolated volume numbers only in the numbers themselves. The weekly chart above illustrates our view rather from a time frame perspective in relation to volume in the higher trading zones.
In step 1, we measured the volume from the highs of 2017 to the lows of 2018 with the result that the majority of transactions on average took place at the level of USD 6,216, providing this support. The second measurement (2) was taken from the 2017 highs including the 2020 lows resulting in a support zone at the USD 8,304 price level. The final sample analysis includes all data between 2017 highs and the most recent data. We now find a solid supply zone in the $ 8,992 zone.
What supports the health of the recent upward directional move is the fact that price support levels have increased over time.
BTC-USDT, daily chart, but where to enter?
BTC-USDT daily chart as of November 23, 2020
It doesn’t matter if you want to add to your position or if you need to start a position, it’s never appropriate to think that a single point will do the trick. This would assume that you know exactly where the market is turning. But nobody does.
Using a fixed interval volume analysis tool is useful for finding low-risk items. It provides the lateral and directional markets with excellent support resistance zones. Along with our quadruple exit strategy, you can set aside the runner’s resting positions. In a trending environment, this creates a long-term, low-risk prime position over time.
Trust, Debt, Bitcoin:
Bitcoin is in some ways a step back to the original roots of money. It is limited in supply; you are the bank as there are no intermediaries. With the Internet came a change of trust. You no longer needed to trust anyone for information. Myths were easily dispelled. While we see a lack of inspirational leadership instilling trust and trust in governments and banks eroding, trust in the internet still seems to find a solid foundation. Bitcoin’s existence is based on principles. Principles are ultimate truths. Bombarded with lies from many sides, it makes this medium of exchange attractive in itself.
Your money must give you a feeling of security. It is questionable how long fiat currencies will still be able to do that job.
Disclosure: They are / we are BTC-USD long. I wrote this article myself and express my views. I don’t get paid for it. I have no business relationship with any company whose stock is mentioned in this article.
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