Still BULLISH on BITCOIN?

Boxmining avatar Boxmining
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Description

Bitcoin has had a major correction this weekend - falling MORE than 15% to $42000 - are we still Bullish on Bitcoin after this crash? Does this signify the start of a Bear Season or a Bull Cycle. We l...

AI Analysis

This past weekend, Bitcoin experienced a significant dip, falling from around $57,000 to $40,000-$42,000, which was quite a brutal crash. Despite this, there's a strong bullish outlook on Bitcoin's future, as this dip is seen as a normal, albeit savage, part of a continuing bull market cycle. The focus is now on analyzing what caused this sudden drop and what it means for the market's trajectory, especially considering the differing involvement of institutional versus retail investors.

Here are the key takeaways from the market analysis:

* The Weekend's Brutal Dip: Bitcoin plunged sharply from $56,000-$57,000 to $41,000-$42,000 on December 4th. This was a very "savage dip," but a slow recovery was observed, bringing the price back to around $48,000.
* Still Super Bullish: Despite the crash, there's extreme bullishness on Bitcoin's prospects. The presenter actively bought the dip, moving USD funds to acquire more Bitcoin, viewing it as a prime opportunity.
* Expected Dips in a Bull Run: It's important for new entrants to expect these "massive dips" as part of any bull run. This kind of price action, where the price drops, stabilizes, and then recovers, is a familiar pattern known as the "Bart Simpson pattern" in crypto, often seen in previous bull cycles.
* Mainstream Media's Influence: Mainstream media tends to sensationalize Bitcoin's drops, often reporting on the lowest prices even when recovery has already begun. This continued negative portrayal is expected for a few more days following such an event.
* Cause of the Crash: Liquidations: The "savage dump" was primarily due to a cascade of liquidations. Many traders take "leverage long" positions, betting on the price going up. If the price moves against them, their positions are automatically closed (liquidated), forcing large sell orders that drive the price down further, triggering more liquidations in a chain reaction.
* Funding Rates and Lending Rates: Currently, funding rates are negative, meaning there are more short positions (bets on price going down) than long positions. This is a clear sign that liquidations have occurred, contrasting with the positive funding rates typically seen in a bull market. Similarly, lending rates on exchanges like FTX are at an all-time low, indicating a decrease in demand for borrowing funds, another consequence of widespread liquidations.
* Slower Recovery Suggests Hesitation: The recovery hasn't been as rapid as one might expect from a purely liquidation-driven event. Bitcoin has been stagnant between $46,000 and $48,000, not pushing back to its pre-dip levels of $54,000-$55,000 quickly. This indicates lingering uncertainty and hesitation in the market, suggesting there might still be some fear at higher levels.
* COVID-19 Not the Cause: The idea that the new Omicron COVID variant caused the dip is dismissed. Historically, previous COVID-related news led to Bitcoin's price increasing due to inflation concerns and the need for a global, borderless currency. The market is expected to be "smarter" and recognize that such events often drive demand for assets like Bitcoin.
* Institutional Investors Are Coming In: This is a crucial insight. While retail interest isn't peaking yet, institutional investors (like family offices and large funds) are actively seeking to invest in Bitcoin. Lawyers and bankers are advising their clients on crypto investments, focusing on compliance and legality. This indicates a significant shift where "institutions are coming in before retail."
* Low Retail Interest (Google Searches): Despite the bull run, general public interest in Bitcoin, as measured by Google search trends, is not at its peak. While higher than 2017 and 2019 baselines, it's far from the 10x surge typically seen in a full bull market, where searches would eclipse 2017 levels. This suggests a large untapped market.
* Institutional Sell-Off When Retail Peaks: The candid truth is that institutional investors, with their vast access to audiences, are likely to sell their holdings when retail interest truly floods the market, which is expected to occur when Bitcoin search interest significantly surpasses 2017 levels.
* Bitcoin Rainbow Chart Predictions: Based on the Bitcoin rainbow chart, a logarithmic chart showing past price movements within colored bands, if history repeats, the peak of this cycle could see Bitcoin prices ranging from $200,000 to even $400,000.
* Extended Bull Cycle: The cycle is expected to last longer than previously anticipated, potentially continuing sideways until mid-next year. This extended duration is seen as a positive, as it gives Bitcoin and other cryptocurrencies more time to appreciate as the underlying infrastructure and industry grow.
* Expect More Volatility: Even though a strong bullish momentum is expected for the next four to five months, "bigger bumps along the way" are anticipated, potentially even more "savage" than the recent dip. It's important to be "wary of these flash dumps."
* Actionable Takeaway: The presenter is personally in a "buying mood," having deployed significantly more capital into the market, and feels an "extreme bullishness" setting in for the coming months.

Transcript

Hey guys and welcome back to Box Mining. So this weekend has been a little bit more than brutal with Bitcoin plummeting down to around 40,000, depending on some exchanges, 42,000 US dollars all the way from 57. So yikes, that was a very savage dip. And right now it's Monday here and we're seeing that slow recovery. And another question on everyone's mind is that are we still in a bull market? Are we on our way up still? Because that weekend was pretty darn brutal. So in this video, what we're g...