The Halving is Close, Is It Time to Buy Bitcoin?

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In today's article, we will discuss the current crypto market and how I’m positioning myself heading into the BTC halving event (Mid April)

Let’s dive in.

Zooming Out on Bitcoin

Bitcoin has surged by 312% from the lows of January 2023, marking a remarkable increase. Apart from a brief period of consolidation spanning four months, its trajectory has been predominantly upward.

Examining Bitcoin's previous run from 2020 to 2021, it followed a similar pattern of steady ascent with minimal pullbacks until May 2021, when a healthy correction occurred.

The highlighted section above illustrates the range of movement from 2020 to 2021 and the present. The blue shaded area signifies the range's discount, while the grey area indicates the premium range.

However, what's the rationale behind examining these ranges? The answer lies in the fact that markets are not one-sided. Eventually, the market will gravitate towards discounted prices during bullish periods, and conversely, it will pursue premium prices during bearish phases.

If we examine the market's performance from 2020 to 2021, it was indeed an impressive run. However, there was an overall retracement that occurred, leading to trading directly into the discount area of the expansion range before subsequently continuing the trend.

What’s The Move Now?

If you haven't grasped the message of this article, it's that I believe, in the short to mid-term, as an investor or trader, you may be presented with the opportunity to enter this remarkable market at lower prices.

This isn't solely about identifying discount and premium prices, although I do emphasize their significance. It's also about considering the broader economic landscape. Cryptocurrency isn't isolated from other markets; in fact, Bitcoin tends to move in tandem with the S&P 500 / Nasdaq. This correlation suggests that if the bigger markets do start a shift in order flow and a short-term bearish trend does occur, Bitcoin will follow.

Commodities have also experienced a surge, largely driven by concerns over inflation. Oil, for instance, has been steadily climbing over the past four months and is approaching a significant level around $95, matching last year's peak.

The last time we witnessed an increase in crude oil prices was in June 2023. During that period, Bitcoin experienced a drop of 22%. Prior to that, when oil underwent six months of upward price action, Bitcoin plummeted by 77% from the bear market of 2022 to 2023.

Important Levels for Bitcoin

I am not suggesting an absolute top in this market or the onset of a bear market by any means. In fact, I believe there is potential for this market to reach even higher prices later this year and into the next. However, given the current economic landscape and the shift we're observing regarding inflation concerns, the Federal Reserve finds itself in a delicate position. While it aims to keep rates higher for an extended period to combat inflation, it's also hesitant to hastily cut rates as the US economy continues to thrive, as evidenced by the latest job reports which indicated an addition of 303,000 jobs in March.

Considering that one of the primary drivers behind the substantial rally in these markets has been the anticipation of potential rate cuts this year, it will be interesting whether this expectation is further delayed and how the markets might respond accordingly.

A short-term level I'll be monitoring for Dollar-Cost-Averaging (DCA) purposes is around 59,100, which coincides with the previous month's low and serves as a key support level. At this point, the price remains within the premium range, so I won't allocate a significant portion of my investment. However, If price declines towards the discount level, approximately around 49,100, I'll begin to increase my position size.

Conclusion

Today's write-up is concise, as simplicity often leads to optimal outcomes. If you're heavily invested in the market at present, perhaps this piece will encourage you to secure some healthy profits amidst the remarkable upward trend. On the other hand, if you've missed out and are experiencing FOMO (Fear of Missing Out), I hope this write-up emphasizes the significance of patience.

I hope the above content has provided you with a better understanding of the overall market. If you have any questions, feel free to DM me on Twitter @NoticeTrades