Did the BTC uptrend fail in 2022?

27 févr.

Let me first say I don't want to argue with BTC bulls. All I want to do is to discuss the properties of trends. We happen to be relating them to BTC and happen to be looking at a bear trend.

In the last new high and drop in BTC something new happened. BTC made a bog drop and when a new high was made there was no follow through extension.

This was the first time that's happened.

BTC bulls were very confident in 100K at the high because every time a high has broken there's been the extension leg.



During 2022 we heard the phrase "Bitcoin has never ..." a lot. Then during 2022 a lot of these phrases were invalidated.

So, something new has happened in BTC.

Was it an important shift of trend? That's yet to be determined but if it is, we should be high into the end of a the bull trap section of it now.

There's that feeling of the "Return to Normal".

We have positive news helping to drive sentiment.

Bears are being squeezed out.

During a bull trend, all of these would be things that can come in a breakout setting up. However, in a bear trend all of these are dire warnings of things turning sour.

In this 55K - 60K zone I think bulls should be very careful. If a bull breakout is made there's probably a simple enough long entry around the same price later.

If the failure to extend in a new trend leg and break of the last low in 2022 was a reversal of the macro BTC uptrend then we'd currently be in what would become the worst rug pull setup in the history of BTC.

28 févr.

Note

Stops hit. Last attempt at limit orders filled on the 86. Breaks out of 86 more often denote an uptrend and I'd likely enter long on a retest of the failed short entry, as described in OP.

28 févr.

Note

If you post a BTC thesis with a stop loss close to your entry, if your stop hits people on here act like you must have went broke over night.

It has to be said, this is an unfortunate thing to have happen on a trading website. Where we're meant to be aware of position sizing and risk management. Odds structures and sustainable bet sizing.

It's also ever so ironic. People lose 50% of their net worth over night in 2021. Then 70% through 2022. And then when I risk 0.25 - 0,5% of my account in a trade, I'm the one risking going broke.

Sad times in the trading world.

And it makes me really worry how bad things would get for these people if the market actually reverses.

28 févr.

Note

And guys, please, if you're buying an asset touted as an inflation hedge when interest rates are 5.5%, please don't talk to me about fundies.

Talk about something else. The fundies would be particularly bad.

I'm a TA trader, but even I know, "Look at the fundies, bro" is a bad case.

All there is, is the ETF. And many assets topped on an ETF launch.

28 févr.

Note

I don't have any thoughts on the correlations here but I just thought it's worth noting for review later.

During the recent BTC spike COIN was flat and then down.

A fairly notable price divergence.

28 févr.

Note

I'd just like to note that despite all the people who've come here to call me stupid no one has explained why the trend should not be considered potentially broken after the failure of higher highs/higher lows.

No one has explained why they are so confident betting on trend continuation after a possible trend failure pattern.

To be honest, they seem to just want to name call.

28 févr.

Note

People just keep saying I have to learn the fundies. Now - when we were at 0% rates and you said it was an inflation hedge ... that made a lot of sense.

When you call it the same at 5.5%, you're ignoring those fundies.

The ETF, can be debated both ways. Here's a list of reasons an ETF can also be bearish (And look at ETF launches, you'll see a lot of them were tops).

Over-supply of the Asset:

When a new ETF is introduced, it often needs to acquire a significant amount of the underlying asset to replicate its index or benchmark. This increased demand can lead to a surge in the asset's price initially.
However, if the asset supply is limited or doesn't increase to meet the demand, it can result in a scarcity of the asset, pushing prices higher temporarily. This might be unsustainable, leading to a potential correction when the initial buying pressure subsides.
Liquidity Concerns:

The creation and redemption mechanism of ETFs can lead to increased liquidity demands on the underlying asset. If the market for the asset is not deep enough or if there are liquidity constraints, it may result in increased price volatility and potential downward pressure.
Short-Term Trading Dynamics:

Traders and investors might anticipate the buying pressure associated with the creation of new ETF units, causing a short-term spike in the asset's price.
Once the initial buying activity subsides, there may be a lack of sustained demand, leading to a correction in the asset's price.
Market Sentiment:

The introduction of an ETF can also be interpreted by market participants as an indication that the asset is overvalued or has peaked in its growth potential. This sentiment shift can lead to selling pressure and a bearish trend.
Divergence from Fundamentals:

If the ETF attracts speculative trading or momentum investors who are not focused on the asset's fundamentals, it can create a situation where the asset's price becomes disconnected from its intrinsic value. This could result in a correction as the market adjusts to reflect the actual value of the asset.

28 févr.

Note

Update on the COIN thing, they've released this statement:

"We are aware that some users may see a zero balance across their Coinbase accounts and may experience errors in buying or selling. Our team is investigating this issue and will provide an update shortly. Your assets are safe
"

28 févr.

Note

There's an attitude that you can have all in style bets on BTC and it's not gambling as long as you never plan to do anything to protect your downside and hope it works out over time.

We've seen many instances of BTC dropping over 50% in under a week. If you have extreme exposure to something that easily has this risk inside of its volatility range, this isn't investing. It's gambling. Investors look to put money into low vol assets for long term gains.

An asset like BTC is something you're typically meant to think of as a gamble. It can pay off big if it works but it's really risky so you size small.

Those who think otherwise, I consider to be a victim of the times. Living in an age of inflated expectations of assets and increasing calls for risk tolerance. The tantalizing fallacy that because risky actions have resulted in optional gains over the last decade this means risky actions are safe.

That is a fallacy!

People love volatility when it's to the upside but markets don't tend to trade in a sustained state. It travels from one extreme to the other. BTC has travelled from absolute obscurity to being something even people who don't trade it check the movements of because possible hints at risk on'/off.

This has been achieved by massive upside volatility. But BTC has always observed the rule of "After big upside vol, big downside vol".

But the potential for a big vol switch on BTC to really make it suffer long term is there. Especially if we entertain the idea that maybe rising interest rates will actually do what they're meant to do and bring down prices (In assets and in general) and create downside moves in equities.

In times of downside vol in equities BTC has always been more volatile. Always under performed equities. 2020 and 2022 it slammed more and took longer to recover. If there was an overall bear event in the markets it's only logical to assume BTC gets hit disproportionally badly.

There's nothing to say for sure this risk will come to pass - but when we're at big decision levels like this is the best time to think about it. At this point you can make decisions which risk you little but massively cover you if you have a lot of bull exposure.

It is entirely reasonable that after the biggest bull expansion in its history BTC makes a correction at least on par with its biggest correction.

Since this would be a correction to an uptrend matured over a decade, it would be entirely irrational to think the corrective period would be anything less than multiple years.

These are real risk in BTC. If you have full exposure to these risks, then you're betting a lot of money on something you do not have any control over and is influenced by chance. Which is the definition of gambling. When you're winning it's good but if you lose then it becomes problem gambling.

28 févr.

Note

The idea of "4 year cycles" also is easily debunkable.

There have been three instances of 4 years passing in BTC's history.

This is not a sufficient sample size to make any meaningful observation on.

Again, as with above, if we're talking about little bets for big wins - can be worth a try. If we're talking life changing stuff - this is not enough to support anything.

It's entirely viable BTC has been in a decade long bull cycle. The first bullish cycle.

If that's the case - then all the observations to now will become entirely invalid because we're entering into a bearish cycle.

Note - this is making an extremely bullish forecast on BTC. That after it's made a full correction of cycle one it runs into a far more impressive long term uptrend - one spanning over decades.

Inside of that bullish scenario, this could come down 80 - 90% and stick there for a few years.

It's totally viable.

The fact people insist people should have full exposure to this risk I find very sad.

And I really hope the macro reversal to bear trend does not happen. A lot of people would be hurt really badly.

There's too much toxic positivity around BTC.

It's a high risk volatile asset.

28 févr.

Note

PS:

The 4 year cycle theory broke in 2021. It broke. That's what this very post is about. The fact there was not a new bull move after the big correction.

As per the 4 year cycle, 2021 started a new bull run to 2025.

It failed.

It's not valid.

Market might go up or down, but the 4 year thing failed.

29 févr.

Note

Bearish interest was at 9000 during November 2022 low. At this time I posted my thesis on why it would make sense for there to be a short squeeze. Bear euphoria had taken over.

Today, BTC shorts hit a new all time low.

Was that maybe a highly successful squeeze?

29 févr.

Note

I did a post dedicated to the common objections.

29 févr.

Note

Update - Still waiting patiently to see how things are resolved around the big fib levels

If a rug pull style move is going to come it'd have to come very soon.

Please note, if this is a bull trap (And I said if) then there has to be a huge rug pull. It's just how it is. If this is a bull trap, the velocity of it will setup a rug pull event.

If we break out, then bear plans have failed and we can start to look at various bullish scenarios. There are some fun bull scenarios to consider but I prefer to be bullish when people are sceptical and fading moves people have undying belief in.

When the shoeshine boy is lecturing you on ETFs the market has gotten too popular for it's own good - to paraphrase a famous saying.

But stubborn isn't smart. If the bear setup fails, it's wait a while and then buy the first major dip/retest of the break.

Until then, I wait.

Crazy things can happen off the fibs.

29 févr.

Note

More specific breakdown of what we'd usually see in a rug pull and'/or a failed bear move.

2 mars

Note

The first line I wrote was I didn't want to argue with BTC bulls and that didn't pan out as I'd hoped.

But at this point I feel I've debated all of the recurring talking points for the BTC bull.

In all the instances I have, after I provide the counter argument and shut down the original point, bulls have just moved onto their next talking point. Not bothering to acknowledge the rebuttal weakens their case.

Having considered all arguments with an open mind I see not of them that support the idea of all in risk (Or even substantial) risk in BTC.

When you get right down into it, the bull case is; "I have a lot of faith it will go higher".

2 mars

Note

How would it affect your life if BTC crashed substantially and didn't recover any time in the next 5- 010 years?

Read full:

4 mars

Note

Do me a favour if it turns out this does happen, do not troll bulls in the comments after the fact.

Make your case before the market moves if you want to help. Do not kick people when they're down if you're correct as a bear.

There are real things at stake and those real things are more important than you being able to say you told them so.

4 mars

Note

This is a macro theory post intended to discuss different interpretations of the change in large charts high lower/higher high structure.

If a bear break is made tactical trading will be discussed on this thread.

5 mars

Note

It's a curious thing that you can make a simple observation about trend structure and people say it's wrong.

While you may disagree with the premise of what it implies, the breaking of the trend is non-subjective.

To mirror all other bull breakouts in BTC history, this bear break should not have happened.

5 mars

Note

New post discussing the different possibilities after the recent strong rally.

6 mars

Note

Here's the recurring problem when it comes to trying to discuss market risk with BTC bulls.

They've wrapped up their identify and pride in their market opinion. So much so that they assume everyone else also has.

Or they have visceral feelings about BTC and assume everyone else has.

Look at all the examples of;

"You've never admit to ..."
"Just move the goalposts"
"Make excuses for ..."

People seem to find it incredibly hard to understand that people think it's best to be cautions of bear risk when at resistance and that one thing does not tell you everything about their personality.

The more I discuss it with people the more I think they're projecting their way of being onto me.

Bulls think bears have a gut-wrenching need to be right often because they have too much exposure themselves to be comfortable accepting they might just be wrong.

6 mars

Note

A high seems impossible now. It always does at a high.

But I promise you, if a big high is made and 10 yrs time BTC has still not recovered people reading through the comments of threads like this will have no problem at all understanding why it happened. Seeing the levels of greed and complacency waving massive red flags.

People thinking they have the promise of 4 year cycles and are shroud enough in the market to understand how it should all go together.

In most cases, they've not been in the market for 4 years.

If it happens people won't look back and say, "What went wrong".

They'll say, "What were they thinking".

And to be blunt - a lot of you are not thinking!

You're repeating catchphrases.

And I really hope you're right because this would be a real massacre if you've just been baited by the market to be peak smug at the worst moment.

6 mars

Note

There are bulls who has a desperate need for bears to fail. You can see it in how quickly they want to jeer anything.

They think it means people like me have a need for them to fail. We don't. I don't even want you to fail.

But people are blinded by their prejudices.

Look at how many times in this thread people have said everything in this post is stupid and I've asked them to quote one inaccurate bit ... and nada.

No replies.

When I debunk the popular talking points. No replies.

Move onto the next talking point. Knock it down. Repeat.

Then they either shut up or call you a bunch of names.

This is not the attitude people should have. Especially not when a lot of you are outright telling people it can't fail.

If it can't possibly fail - then why can't you hold up a decent debate on the subject?

6 mars

Note

The more I've interacted with bulls here the more I've thought this thesis has a lot of weight.

You can't tell them anything. Even if you show them you objectively outperforming them on the big swings.

They only ever want to tell you how stupid you are.

You have to be toxically positive about BTC or you're not only an idiot, you're a bad person.

Yeah ...

That all sounds super sustainable.

Doesn't sound at all like something that might have gotten too popular for its own good ...

It's not hard to believe. Hard to expect ... but not hard to believe.

The conditions for a wipe out move are obvious.

10 mars

Note

Replies in this thread and another BTC related post I had prompted me to look into studies on crypto trading and problem gambling.

Here's what science has to say.

12 mars

Note

Thank you for all the messages and support in these tying times.

I'm okay but appreciate your concern.

Bear break/failure plans will be tracked in this thread.

16 mars

Note

This would seem to be the major decision point for this. In the historic breakouts BTC has always held a retest of the last high.

If that happens and we make a sustained breakout of the highs, the uptrend has re-established itself.

If this turns out to just be a head fake, we see it as only wicks in the bigger charts and it's followed by a rug pull.

For the trend reversal/false breakout thesis to be valid there needs to be some sort of rug pull event. Bull traps are evidenced by rug pulls.

19 mars

Note

It's been really interesting reading all the different polarised opinions on BTC.
Here's a post collating the popular opinions for bulls/bears.

19 mars

Note

The bear break thesis came very close to failing in the last swing and is still close to failing - but if this is a wick and a head and shoulders, these are known traits of false breakouts.

I don't want to go over old ground too many times, but suffice to say a false breakout would have a really nasty shock for bulls coming soon.

Also on major supports here. Def a spot for bears to be careful. Any shorts from higher prices can have stops adjusted now to free roll the break.

Break can be huge is it comes.

19 mars

Note

We're close to a point where we'll see the true nature of people in the market, because we're close to some people being wrong big.

Be it bull or bear, someone is probably soon going to be wrong big.

It's when people are wrong you get to learn the most about them.

Do they make adjustments or do they make excuses?

Are the people who demand accountability from others for their incorrect forecasts as quick to accept their failings?

It really is when you get to sort the wheat from the chaff. We all get things right. That can be lucky. We all get things wrong, that's part of the game.

Only when people get things wrong big do you get to learn the truth about them. There's no where to hide when the market moves big against you.

We're on the inflection point now.

Whatever way it goes, the reaction of those who are wrong will be telling.

20 mars

Note

Condition of a wick holds for now. Thesis still valid.

Big decision level for this now.

Macro update:

25 août

Note

Lot of time passed since I wrote this post but the thesis of trend failure is still possible.

Here's the trade plan for if there's been a false breakout and we're in a downtrend.