ETF Nom Nom

$53k, ya don't say?

The bull market vibes are back, at least for Bitcoin and a handful of alts anyway. Of course it's definitely hard to celebrate when Hive is my biggest bag and it lags behind everything like always, but then again that's exactly how I've been able to acquire so much Hive in the first place. All I can say is that getting another 200k Hive gonna be pretty damn easy if the price drops to the all time lows of 250 sats. One day I will join the ranks of the elite with the other whales. Until then I keep stacking the corn.

Watching Bitcoin go up during these last few days has been pretty exciting. Not because the gains are huge or I'm making a ton of money, but because the moves are small, measured, and non-volatile. We breezed through $50k like it was nothing after only 2 days of resistance. That was supposed to be a much harder psychological barrier to crack.

At this point it's quite obvious that the buyers in this market no longer care what the price is. There's a ton of DCA going on, which is a narrative that makes perfect sense. The ETF providers are obligated to just keep chunking away at the supply. They have a product to sell, and they are selling it. The risk is being outsourced to their own customers and they are going to take their cut no matter what happens.

On this note it's funny to watch the cult of Bitcoin shake their fists at Larry Fink and declare proudly that they'll never sell to Blackrock and that these ETF providers are screwed because supply shock is coming. It's like these people's minds have been completely divorced from reality. The ETF providers want a supply shock. If Bitcoin goes 10x they make 10x more money from yearly fees. That's their entire business model.

Supply shock is coming

There will be signs. For now volume is still low and price is still relatively non-volatile. That's a pretty good sign. The usual suspects are still bearish and still completely wrong as always. It will be worrying if and when all of these things change.

I think we have to assume that sell pressure around $100k is going to be pretty intense. Does that make this a good place to take some gains? Maybe in the short term, but that's just gambling. I'm quite sure that 2024 is going to prove itself to be a terrible time to try and outperform the market with paltry trading.

In a market like this the best we can hope for is to catch a 30% dip before them market rallies higher. Unfortunately this ETF buying pressure is creating higher lows, which might mean at best we can catch a 20% dip. Now factor in the reality that selling the pico top is nearly impossible and catching the bottom is also just as hard. Even a good trader is going to maybe catch 5%-10% of the overall 20% move. The risk to reward simply isn't there to justify the decision.

The 3rd year in the cycle is always a HODL year.

There's only one small chance that price absolutely moons over the next month combined with the halving being a sell-the-news event that MIGHT make the risk worth it.

Levels to look for:

1. The double top: spike to $69k ATH with a 28% dip to around $50k.
2. Laser eyes: $100k celebration sparks massive volume and selling.
   Dips back down to previous all time high around $70k.
3. $120k: Doubling curve trendline acts as resistance to massive inflows.
   ETF buy pressure holds the line down to the dip to $100k unit bias.

In all of these situations Bitcoin has to spike up quite a bit within the next four weeks. If Bitcoin is still trading at $50k at that time it won't really be worth trying to make any kind of move. I'd say the chance of opportunity is actually quite low and I proportionately talk about it far too often. But we'll see as the timeline approaches. Thus far it's playing out quite as expected, so there is that.

The ETF to end all ETFs.

These things have been up and running for a very short time, but already the numbers are more impressive than other ETFs that have been trading for years. With the institutional adoption of Bitcoin comes a new class of diamond-handed holder. Dare I say ones that actually have diamond hands.

When looking at crypto degenerates like us, we are massively overallocated to these positions and the emotions run very high when the price goes both up and down. Hedge funds and investments firms do not operate in this manner. They're going to tell their clients to allocate a position of 1% to start, and maybe they increase that to 3% later or a maximum of 5%.

Not only that, these institutions are going to demand patience from their customers. They'll whisper them sweet nothings like don't worry about day-to-day price action this is a guaranteed win on a 5-year hold. And guess what? They're going to be right. Everyone understands that Bitcoin makes new all time highs every 4 years without fail.

It is this knowledge and understanding that will eventually and ironically lead to it not happening. If everyone knows that they can buy and hold Bitcoin for a guaranteed return after a 4-year maximum, then it stands to reason that eventually institutions will massively overallocate to the position under the weight of this extreme hubris.

Something like this can only end in one way: the biggest BTC bubble we've ever seen accompanied by some of the most absurd FOMO we've ever seen. Current target for this outcome in the current cycle would be around $5M per Bitcoin. So like an x100 from here. Although it would be extremely overconfident to presume something like would happen on the very first round. Perhaps we'll revisit the idea in 2029.

Do we even want $5M Bitcoin?

Absolutely not. We want a stable asset and a super cycle that just slowly goes up every day; basically exactly what Bitcoin is doing right now. Stability is the best outcome, not insane volatility accompanied by new users losing their entire net worth after a single bear market. But that's the thing about number going up: people get greedy, overextend, and kill the party. It happens every cycle. This time is not different.

Conclusion

I'm absolutely convinced that the halving event is extremely bearish in the short term. I expect a big pump and dump, and that pump and dump seems to be materializing right now before our very eyes in real time. These slow upward movements on BTC will soon lead to extreme FOMO and a blow-off top, or so the theory goes. Keep a lookout.