Has A New Bull Market Kicked Off?
Bitcoin outlook, claiming clout, and shifting to invest and HODL mode
Last night, Bitcoin finally broke out of the consolidation range that it had been in for almost a month. It’s now up nearly 10% this week and nearly 100% since the November lows!
In this issue, I cover my outlook and game plan going forward, claim clout for how I’ve covered the markets since I started writing here, and then tell you how this newsletter will change going forward based on the market conditions.
Outlook and Game Plan
I think the current rally that started last night has some more room to run because it’s coming after such a long consolidation and the next major resistance levels are a bit higher.
Even though I’m super bullish on Bitcoin over the long-term, I’m not FOMO buying right now. I’ve already allocated almost all of my crypto portfolio anyways, so it’s not really even an option.
I’m looking for a pullback after Bitcoin gets to the $32-34.5K area. If it does pullback, I don’t want to see it go back below about $28.5K—the top of the range that it just broke out of.
If Bitcoin doesn’t pull back and just keeps melting bears’ faces by rallying further to above $35K, I’ll be looking for $60K, with a pit stop around $45K. I’d rather buy above $35K than right now because I believe that it has a higher probability of significant continuation higher.
Claiming Clout After Bitcoin Doubled
I’m super happy with how I’ve been playing the market, and I’m proud that I was bull posting here even when everyone was panicking and mega bearish because of:
The FTX collapse
Macroeconomic uncertainty
Binance FUD
The SVB collapse
The USDC de-peg
I’ve been lucky. But I’ve also been studying the crypto markets for over seven years. I’ve obsessed over the charts and followed emerging trends. It feels like the hard work has paid off and I hope you’ve learned a bit from reading my updates.
I didn't get every small short-term move exactly right, but I also didn't try to because I'm not a day trader. I didn’t buy the exact bottom at around $15.5K. I bought a couple weeks after it at around $16.5K. That’s fine because my buys had a higher probability of being profitable and have earned strong returns now that Bitcoin is up about 100% since November.
I’ve shared my outlook and game plans with you, and I’ve been pretty accurate about calling the major moves. However, I also shared counter arguments and I never spoke with certainty because there is none crypto.
As a crypto investor, I think though possible scenarios, estimate the likelihood of each scenario playing out, and then form a game plan for each scenario. Also, I don’t provide financial advice. I only tell you what I’m doing and my thought process.
Here’s the summary of what I’ve said here on Euphoric followed by a more detailed play by play with links to the reports where I shared my game plans and trades.
Bearish because the monthly and weekly charts are in downtrends.
“This time feels different, but every time feels different. It seems like we can't possibly recover from this now, but we've recovered from every single past disaster.”
“After the horrible news about FTX's collapse, sentiment became extremely bearish. Many of the above [bottom] signals hit.”
“I sold all of my crypto about a year ago. I've been in cash since then (aside from buying the January and June '22 dips as trades), waiting patiently for a time like this. 75%+ dips over the course of over a year while sentiment is abysmal have historically been outstanding times to buy.”
Trade ideas: buy now at ~$16.6K, buy strength above $16.7K, buy a dip.
The next major level of resistance on the weekly chart is around $24.3K.
“I bought Bitcoin this week! It feels good man. This is the first time in a long that it seems like this could be a long-term investment rather than just a trade.”
Bought on November 30th at around $16.5K.
Plan to buy more if Bitcoin goes above $17.58K.
The next levels where I plan to buy more Bitcoin: $19K or $13.85K.
The levels at which I'm planning to buy [more] based on the monthly chart: above $20.5K or $13.85K.
Bitcoin's weekly chart is starting to show signs that it wants to resume rallying, and potentially that the bottom is in. If we don't close below $16.25K, last week's and this week's candles could represent a higher-low. If Bitcoin then closes above $17.1K that would make a higher-high. This would be very bullish.
Game plan based on the weekly chart: Buy above $17.1K, sell below $16.25K.
“As long as Bitcoin closes above $16.25K, the current candle would represent a higher-low. In other words, if we don't make new lows, the past few weeks are just a standard pullback before we continue higher. I still think there's a greater than 50% chance that the bottom is in.”
I'll be looking to buy a lot more Bitcoin if it goes down to $13.85K or lower or up to $21K or higher.
“Crypto doesn't seem too attractive right now because of the trust lost as a result of the FTX collapse. However, based on my experience going through two major bear markets, this is exactly the time when you want to be locked into the market because it will pay off in the future.”
I remain hopeful that the bottom is in and that we can rally in the first half of this year.
My game plan going forward: Buy if Bitcoin breaks above resistance levels at $17.1K, $17.55K, $19K, and $20K.
It would be an incredibly bullish sign if we blast through $19K. That would be a good buy signal.
Bitcoin has formed the start of an uptrend on the weekly chart. This is incredibly bullish because trends in crypto are so powerful.
I said in last week’s issue that if Bitcoin closed last week’s candle above $17.1K that I would buy more. I bought a bunch more BTC and ETH right after the candle closed on Sunday night.
If Bitcoin goes above $20K, it would be quite bullish. I’ll buy more Bitcoin if it does.
“Bad news is getting ignored, there are still many loud bears, and the charts are starting to look pretty good. So I’m fairly bullish right now.”
Bitcoin has reclaimed the 2017 high ($20K), and the pre-FTX high ($20.5K). This is a change in market structure. And it’s bullish.
I’m looking to buy more Bitcoin if this week’s candle closes above $20.9K.
I now believe that it’s very likely that the bottom is in. Therefore, $37K is within play over the course of several months.
$23.3K is a logical spot for a pullback unless the bulls are really in control. There’s formidable resistance on the weekly chart clustered around $25K.
If we get above $25K, I’ll likely buy more Bitcoin.
I’ll be more bullish if Bitcoin goes above $23.3K, and even more bullish if it goes above $25K. This would make me more confident that we can continue to rally over the next few months (and potentially years) and is the next point at which I plan to buy more Bitcoin.
It could take weeks or even months for Bitcoin to break above $25K.
I took some profits
I plan to buy more Bitcoin at $20.5K and/or above $25K.
Game plan: Buy a dip around $20K if it happens.
“At prices this low, I would basically just close my eyes and buy and/or dollar cost average and plan to hold for a long time.”
I’m looking to buy Bitcoin at around $20K.
I bought Bitcoin at $20K on Friday night.
I plan to buy more Bitcoin if it goes above $21.5K.
If March’s monthly candle closes above $23.3K, I’ll be very bullish on Bitcoin over the long-term.
In order for me to get super-mega-bullish long-term, I need Bitcoin to close a weekly candle above $25K. If/when it does, I plan to allocate my remaining long-term crypto investing portfolio.
I’m leaning bullish here because Bitcoin is testing this resistance level for the third time.
I’m long-term bullish because Bitcoin is above $23.3K, making a higher-high on the monthly chart. This is an indication that a new uptrend (bull market) is starting.
We’re going to break from the current three week consolidation range eventually—and probably soon. We could break up or down—I don’t have a strong opinion on that. My intuition is up. I expect Bitcoin to decide if it wants to break up or down as early as today and as late as the end of next week.
What to Expect Going Forward
When I started Euphoric in October of 2022, crypto was in the dark depths of a brutal bear market. My approach during this environment was to do more swing trading than investing.
I’m now operating under the assumption that the bull market started after Bitcoin broke out above $25K. I’ll remain long-term bullish unless the charts start telling me otherwise.
The current market condition is far different from when I started this newsletter. Therefore, my strategy and the analysis that I share here will change.
I’m shifting from swing trader mode to investor mode.
Going forward, I’ll be looking for and writing about:
Resistance levels that have a high probability of triggering a major (~20%+) pullback to take partial profits
Support levels that have a high probability of triggering the end of dips to buy with profits taken
Signs that the bull trend is broken to significantly wind down my position or exit the market completely
I’ve always focused on the monthly and weekly charts to find major medium and long-term moves. However, I did include the daily charts to get shorter-term views in some reports because I was managing my trades closely. Going forward, I’ll hardly ever include the daily chart.
It’s time for me to HODL and make more money so that I can buy more Bitcoin until the charts tell me otherwise. I care even less about the small, short-term swings now.
If you haven’t started buying yet, it’s all good. The bull market just got started and there’s still a lot of potential upside IMO. That could change, but it hasn’t yet.