pull down to refresh

The Tail Whip in Bitcoin (Part 1)
643 sats \ 5 comments \ @rothbardllc 15 Nov 2022 bitcoin
Intro: I wrote a daily newsletter about stocks and gold markets from 1997 to 2019. In 2015 I tried to pivot to Bitcoin, but my mostly institutional client base was not interested. By 2019 I grew tired of following stock and gold markets on their slow and inexorable fade to irrelevance. I am re-launching my reports now focused entirely on Bitcoin, exclusively on Stacker News,
There are so many phenomena in markets that can hurt you.
But the one that stings the most is the tail whip, because it scares you away from a market at exactly, precisely the wrong time.
The tail whip is that last piece of energy transmitted down a medium, accelerated to brutal speed for the final stinging strike.
Picture it in your head: the tip of Indiana Jones’s whip flying towards the target, slack but coiled for final release as the cord stretches to its maximum length.
https://cdn.sanity.io/images/cxgd3urn/production/4c92b7233aae18ad0695f8ec674924e195b62b17-1024x759.jpg?w=1920&h=1423&fit=crop&auto=format
Courtesy of a few brilliant strategic tweets from CZ, we’ve just seen a hard cracking tail whip in bitcoin markets, with FTX’s clients and shareholders receiving the brunt of the force, but self-sovereign bitcoiners also grazed by collateral impacts.
https://www.tradingview.com/x/qxHyBiVS/
It’s important to remember that the tail whip, by definition, comes at the very end. It is the final move of an impulse traveling down a medium. So yes, this is a strong indication that we are right now in the final throes of this tumultuous period for bitcoin.
I’ll go ahead and put any nascent credibility on the line right here and say we’ve just experienced the final low for bitcoin. Purging Alameda and FTX was the final spasm of the market retch that started with Three Arrows Capital in May and June. We start to feel better from here.
And likely much, much better, in a fairly short amount of time. According to my models – which I’ll explain in detail in subsequent posts – bitcoin should now go up, with only moderate pullbacks, for 24 months, out to late 2024.
https://www.tradingview.com/x/12tvQ1Ck/
It certainly doesn’t feel like it, but I would also say that we are already 4 months into a 28-month move to the upside.
Your reaction: how can we be in a bull market when prices are lower? What are you, stupid?
This is an early bull market in the same way that the “massively bullish breakout” exactly one year ago at this time was in reality part of an emerging bear market. That was the last tail whip of a bull market that was already over (it was muted, because highs don’t carry the same energy as lows; fear is a stronger, more urgent emotion than greed.)
https://www.tradingview.com/x/ewdzsvWd/
Bitcoin stretched up to a fresh all-time high at $68,900, but what a fake-out that turned out to be. What a selling opportunity.
Just like now, in reverse. This is an equivalent – no, better – market opportunity than that top. Because this time price will blow through that top in the high $60k region and keep heading higher.
More on this over the coming days.
The tail whip is particularly nasty because in order to generate the necessary energy for the final stinging blow, the market price has to go up as a direct precursor to the final whip down.
https://www.tradingview.com/x/mKSZPtPO/
I freely admit that I didn’t see such a volatile slam down in the works. I thought the market had finally cleared out enough remaining traces of bullishness to turn around and head back up in earnest over the coming months. Sideways churning can accomplish this job, slowly, and 4+ months was enough time.
But now that we’ve seen the tail whip, we can know with much more certainty that the low is in, as there is now a surplus of latent energy ready to push prices higher more quickly than off a sideways churn. The cumulative order book in bitcoin has been mostly scrubbed, creating a vacuum of upward pressure in the market structure. All the sell stops were run on the whip down, leaving very few sell orders left for an always-seeking-liquidity market to find.
Part 2 to follow
write
preview
related posts
354 sats \ 0 replies \ @pillar 15 Nov 2022
Are you drawing lines on a chart in stacker.news? People don't tend to draw lines on charts on stacker.news.
After reading this:
I’ll go ahead [...] and say we’ve just experienced the final low for bitcoin.
and this:
But now that we’ve seen the tail whip, we can know with much more certainty that the low is in, as there is now a surplus of latent energy ready to push prices higher more quickly than off a sideways churn.
I have a question: I assume you are leveraged-to-the-tits long on Bitcoin, right?
reply
310 sats \ 0 replies \ @satcat 15 Nov 2022
The only backing for your argument I see is your downward trend line. What makes you so sure more exchanges and shitcoins don't blow up and we keep going lower?
reply
229 sats \ 0 replies \ @TomK 15 Nov 2022
Interesting perspective! Thanks a lot, lets see how it will play out. Regarding to the debt cycle its probable that Central Banks will be fueling the comeback with rocket fuel to save their treasuries.
reply
20 sats \ 1 reply \ @Brunswick 16 Nov 2022
I have a feeling we are in a season of exclusively black swans for the next several months, possibly until the next election. FTX and the midterms have just offered a public glimpse inside the trap door to the sausage grinding gears of US politics, and you can't un-see how the food you've been spoon-feed for a century is made. The economy, one still dependent on trust, is on the precipice of a vomitous rage from the reality of the cornerstone upon which it was built is not made of rock but of a mercurial poison. What does this mean for bitcoin? I can't know.
reply
5 sats \ 0 replies \ @chungkingexpress 16 Nov 2022
Poetry!
reply