Bitcoin has been super quiet lately. It’s down small over the past three months and there’s been very little volatility.
It has me wondering when—or if—this highly anticipated bull market will start ripping. This cycle is by no means obligated to perform like prior cycles.
I bought Bitcoin for the first time in 2015. I HODL’d through the past bear market from 2018 through the Covid crash in 2020. When everyone was rage-quitting after the FTX collapse, I bought. When everyone was panic-selling during the SVB collapse and the USDC de-peg, I bought. I’m as bullish on Bitcoin as anyone over the long-term.
However, this is the first time I’ve started to question whether I want to keep spending my time in the crypto space. Maybe I should pivot into AI like other OG founders and investors have been doing lately.
In this report, I’ll start by sharing my price outlook on Bitcoin based on the weekly chart, then share my steel man bear case for crypto.
TLDR Outlook
Medium-term (weeks to months): Bullish. Technicals look great. The weekly chart is in an uptrend. The 200-week moving average is trending up and Bitcoin is above it.
Long-term (months to years): Neutral. Macroeconomic conditions and Fed policy are uncertain. There’s a regulatory assault on the industry. Crypto natives are bored. Normies are not interested and/or still don’t understand the benefits of Bitcoin or how it works.
Super long-term (years to decades): Bullish. Bitcoin is a superior monetary system because it has a fixed supply controlled by transparent code rather than an organization that has over $30 trillion in debt. Crypto can be held and used by anyone, anywhere in the world without relying on trusting any third party.
Technical Analysis: Weekly Chart Looks Fantastic
I’m using the 200-week moving average (blue line in the chart above) as a simple indicator for whether I want to be in or out of this market. Bitcoin has held above it for about a month now. Last week, Bitcoin popped off of it on the back of the news that the debt ceiling would be lifted. Those are good signs.
When Bitcoin pulled back into the 200-week moving average this week, I bought some at around $27K. I bought less than I had sold at around $29.5K.
I will sell at a tiny loss on this, and take profits on the little remaining Bitcoin I have from my purchases following the FTX collapse, if Bitcoin closes a weekly candle below the 200-week moving average (which currently sits at around $26.5K).
The weekly chart has been trending up—making a series of higher-highs and higher-lows—since November 2022. As long as Bitcoin doesn’t close a candle below the green horizontal line in the chart above, where the SVB candle in early March closed, the uptrend will remain intact. This is all quite bullish.
However, I’ve lowered my targets for dip buys because of the fundamental analysis and sentiment that I’ll talk about after this. I’m now only interested in buying Bitcoin if sentiment shifts to extreme fear, which would likely come on the back of a horrible news event (such as Digital Currency Group collapsing), and Bitcoin “crashes” (e.g. down 15% in a single day) down to around $19K or potentially even lower depending on price action over the next few months.
Time to Pivot to AI?
I believe that bitcoin has tremendous benefits over our current monetary system and is net-positive for society. However, zooming out, Bitcoin is pretty close to the price it was at five and a half years ago at the top of the last bull market. The adoption and performance as been lackluster.
Most normies still don’t understand the benefits of Bitcoin or even understand how blockchains work. Now, they don’t trust crypto because of FTX and the onslaught of anti-crypto propaganda in the media that’s ensued since the exchange collapsed.
We still can’t use Bitcoin or crypto for every day transactions, nor do we necessarily need to because of the improvement of TradFi solutions such as Venmo and Stripe.
VC funding is down, developers are leaving, and exchange volume is back down to 2018-19 bear market levels.
A lot of new people came into crypto during the last bull market—but then they left. Crypto had it’s time (over ten years now) to shine. Maybe it’s AI’s turn now.
If we get another bull market, I’m sure new people will get in, but we won’t get another bull market unless new people get in.
One simple way to gauge market sentiment is to gauge your own sentiment. Right now, my sentiment is dog shit. Bearish sentiment is bullish. So maybe the the bull run is about to rip off. This bear market feels different, but every bear market feels different.
Like Elon Musk said this week, freedom of money is a critical part of a free society. So I’m still bullish over the super long-term. But I wouldn’t be surprised if the next year ends up being flat or down for Bitcoin and down bad for altcoins.