finding the bottom is actually simpler than you think
forget the market
below the market. there are people able to acquire bitcoin CHEAPER.. they are the miners of the most efficient mining on the planet.
they are the BASE. the "no one on the planet can get below"
some less knowledgeable think bitcoins base/bottom could be $3k. but thats their opinion from market wiggle watching of a few years agos low.
it means nothing in regards to todays base.
if no one can or wants to sell below a certain level on the entire planet. then thats the base/bottom.
this base/bottom support is not something that wiggles volitally day by day. its a stable rate mainly due to miners electric contracts being allotments of MW over a 1-2 year period. averaging out the variability of their daily-monthly costs.
their hardware they run for a couple years before upgrading. again averaging out their variability.
the only variability is the hashrate competition itself which determines how much of a miners hashrate compared to the network hashrate a miner is going to get on average of coins.
but they do not play to the whims of the daily changes of mining coin rewards issued due to hashrate changes. they instead just plod along mining, and just take their coins they accumulate in a 6-24month time period and evaluate the coins of 6-24month vs their 6-24 month costs of electric/hardware
if you simply calculate the mining costs of the cheapest mining on the planet. you find this base number
Very good points!!
This data i got online: Most of the leading mining companies can breakeven at price of $7,000 to $9,000
Many of indicator i follow say that worst scenario is from $9k - $13k.
Only one indicator I folow says we can go under $9k, and that we can hit $4,4k.
I dont treat this indicator which predict $4,4k as a potential bottom a serios option. Realisticly this indicator claim that the bottom is around $16,5k
Thanks for your insights! I appreciate all indicators you have stated within your post. I have come across another great indicator that can maybe help identify clear DCA-zones, mixed DCA and cashstacking zones, and clear cashstacking zones in which one should not buy BTC from a risk-to-return perspective.
https://www.coinglass.com/pro/i/ahr999Check out AHR999-Index.
This indicator calculates the 200 day costs for BTC in relation to its current value. The following zones can be adapted for a monthly rate one is aiming to buy BTC with:
<0.45 = all in (below red line, red zone)
0.46 - 0.7 = 75% BTC, 25% Cash
0.71 - 1.0 = 50% BTC, 50% Cash
1.01-1.2 = 25% BTC, 75% Cash
>1.2 = 100% Cash (above fixed investment zone aka the green line)
With this strategy, one can invest rationally and give up emotional investing. One has a clear strategy of when to buy into BTC and when to start building cash. A great side effect of this strategy is a passive cash building strategy. When the market is then tanking again, there is enough cash on the sidelines to buy heavily into BTC. In the past, I sometimes had problems to discipline myself not to buy into too high prices. Since I found AHR999, I have been really consistent, strict, and disciplined with myself. Maybe this will help you too.
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IN GOD WE TRUST, IN CODE WE TRUST!
Long live SatoshiEAST GREAT FALLS
I see you like to DCA more frequently. Not so bad strategy , if you wish to stay discipleted
Modern History Facts:
1) The S&P500 has bottomed every time during a recession. The exception is the dot com bubble. The present time, however, is nothing like the dot com bubble. A recession has not yet been officially declared
2) In the past, a recession was declared when two consecutive quarters of GDP were negative. This time it was not like that in 2022
3) The bottom of the S&P500 was always reached immediately or a little later (a few months later) when the Fed pivot
4) Every indicator I know indicates that a recession will most likely occur in 2023
5) Unemployment is in good shape, this is probably the main factor why a recession was not declared in 2022
6) The Fed is likely to reduce rate hikes from 75bps to 50bps in December. This is not a PIVOT
7) If the FED PIVOT too quickly the 70s where we had a yoyo market could be repeated. Inflation must remain stable and low in the long term, otherwise we cannot have the next big bull market
The Fed should stick with tough policy until quite a few zombie companies fail, and hoping not to many people lose jobs fast
IF the high interest rate persists, it will have a negative impact on the economy. Tech. companies in particular are sensitive to the level of interest rates. Therefore, it is possible to expect another crash in the crypto world similar to FTX.
Many crypto indicators that I follow say that BITCOIN is at the bottom or very close to the bottom. If there was no threat of recession ahead, I would dare to say with some certainty that this is the bottom of BITCOIN.
If large companies get into financial trouble, they will also be forced to sell large amounts of BITCOIN, like Saylor.
The FTX news will slowly cool down, and BITCOIN may soon go above $23k. For example, if the inflation data in December are better than expected, we can expect milder rhetoric from the FED in December. Such scenarios could push BITCOIN up.
This stock bear market has been average so far. Therefore, it may happen that we will experience the bottom of the S&P500 in the summer of 2023. This bottom may be just a little lower than the current bottom - 3.577.
This is a sign that even then BITCOIN will reach the bottom at that time, which could be approximately where we are now.
In any case, the year 2023 should not be the year where BITCOIN will make a big upward movement
ETH dominance is sky high for me right now, so I'm only buying BTC right now. ETH has a much better chance of making a new low than BITCOIN
Could a major stablecoin collapse happen? This is what could finally drive many cryptocurrencies to their real value of $0, and bitcoin would finaly find his bottom.
We also should know that FTX news impact at this time on BTC price stronger than FED policy
Its my first image that i try to add. After someone will quote picture should work
This bitcoin indicator is still not at his bottom. But only smaller additional drop need to ocure
I don't see the war as something that would drastically affect the price of bitcoin. War is just the Fed's excuse that war is to blame for inflation. Inflation was high even before the war
Inflation and unemployment gets people selling their coins instead of buying.
The energy war (don't forget that too) makes some miners get in difficulty because of the prices.
Recession can make also businesses sell (some or all of) their investments.
if you simply calculate the mining costs of the cheapest mining on the planet. you find this base number
If a mining facility works on solar power and got its ROI for both the panels (and related hardware) and miners, the costs would be insignificant.
Still, they will not sell under the price of electricity they could sell to the grid, I guess. So what's the minimum by your math? 0? Or the equivalent of 5 cents/kWh?
I don't think that they'll be
willing to sell this low, no matter what.
So I see a contradiction/discrepancy between
if you simply calculate the mining costs of the cheapest mining on the planet. you find this base number
and
if no one can or wants to sell below a certain level on the entire planet. then thats the base/bottom.
Bigger money starts going into the system when the news are at the bottom. When the economy starts to recover, the financial markets are already quite a few percent above the bottom.
For example, when the financial markets see that unemployment is already too high, they simply assume that the FED will start lowering the interest rate. And if the Fed only give a hint that it will go in this direction, we have probably already hit the bottom...
[moderator's note: consecutive posts merged]
