BITCOIN in its Worst Month Since the FTX Collapse in November 2022

BITCOIN is one of the best performers YTD 2024.

Bitcoin is not only one of the best performers YTD in 2024 as of the date I’m writing this post (05/02/2024), but also one of the top performers over the last 10 years.

However, this comes with a cost—extreme volatility.

From March 2022 to December 2022, it lost 72% of its value, but then it gained 63% in just 4 months.

From its low of $16,000, one could have made 300% in 17 months.

That’s why timing is crucial—not buying at a high and knowing when to take profits.

Of course, there are HODL enthusiasts, and in the long run, I believe it works out well, but pay attention to that—LONG term. If you didn’t take profits at $70K in November 2021, you would have had to wait three years to be at the same level. That’s why I emphasize the word LONG term.

Several funds and analysts believe that BTC has plenty of room to keep rising in this bullish movement.

At current values, it seems like we are halfway through this bullish cycle (see weekly chart below).

Here we can see that there are significant support zones around $42,000. If that level breaks, I’d start to worry about a potential drop to lower levels. However, as long as it remains within the channel, I’d feel “comfortable.”

How high could BTC go?

What are the targets of this bullish channel? Levels between $110,000 and $130,000 could be reasonable targets if it breaks out of the pennant formation that’s shaping up as a pattern.

Of course, as always, we’re just looking at possibilities, setting an indicative framework, and then each person should do their own analysis and interpretation. However, this chart has clear meaning and well-defined breakout zones, and I like it because it allows me to identify what I’d consider "cheap" and "expensive" for BTC and to set long-term goals.

Another interesting point.

On-chain data analysis shows that long-term holders are no longer selling as they started to at the beginning of last year (2023). This suppresses supply, and we also have whales buying at levels around $63,000, which gives bullish signals.

What I’m not too fond of is the high interest rate environment, but BTC is showing less correlation with the NASDAQ. During the IRAN-ISRAEL conflict, we saw QQQ drop 2% in a single day, NVDA fall 10% in one day, while Bitcoin rose 1%.

We can see the different reactions in the two charts above.

What I’m Watching in BTC

One thing I’m particularly paying attention to in BTC is the pullbacks to the moving averages. It just broke the 100-day moving average, which I didn’t like, and if it continues downward, the 200-day moving average is the next target, which aligns with a strong support zone around $52,000.

We’ll see how this develops, and I’ll keep you updated on what I observe.

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