Topic: Sustained BTC Rally, New ATH Very Likely 🍀 & Thus It Happened 🍀 (Read 298 times)

The point I was making about Microstrategy has nothing at all to do with whether their position will profit. I think it will. What I'm talking about is their sentiment, and what it might say about broader market sentiment.

When traders leverage long, it generally means they expect very high returns in a very short period of time. In line with the maximum pain theory, we often see high margin long levels, high premiums on futures contracts, high funding rates for long swaps, and other signs of greedy sentiment before bearish market reversals. That's all I'm talking about. I just take it as one more indication of greed, when considering other things like long/short data, forum and social media sentiment, etc.

In the context of a bull market, high levels of greed go hand in hand with severe volatility that repeatedly punishes top buyers and leveraged longs. Doesn't mean the bull market is ending anytime soon, but it's something to keep in mind when attempting to trade this market. The type of downside volatility I'm thinking of: January 2017, March 2017, June 2017, September 2017.....


Yeah.


Yes, they will need to sell BTC to service the debt. If the market were to move against them, that's a recipe for a long squeeze.

You're only thinking about this from the perspective of a BTC mega bull who thinks the price can't go down. Let's be neutral about that for a moment. This is about sentiment analysis, not predicting where the market will go.

When everyone expects the price to rise, the market is greedy. When everyone is scared the market will drop, the market is fearful. And that's all I'm talking about: is Microstrategy leveraging long a sign of greed or fear?

Eh, I don't think anyone should be worried about Microstrategy leveraging themselves. I mean it's a bit weird since they are an actual company that does business that has nothing to do with blockchain, but in general business are in the business of making money, so it's a great investment on their part. If Bitcoin was like getting close to a peak sure it'd be a terrible play by them, but I don't think anyone is remotely worried about this market cycle coming to a close anytime soon. Microstrategy is already up hundreds of millions of dollars, and within a year will no doubt be up billions of dollars. I don't know how the debt issuing they did works, are they just gonna be paying interest on their debt or something? I mean they are buying Bitcoin to be their main treasury asset instead of USD, but if they are issuing debt it seems more like they are doing it just as a pure investment, so I would assume at some point next year they'll sell some of this to pay off the debt so they just are using it as their treasury holdings, and in the meantime they'll have made billions of dollars even after paying off the debt, if I'm understanding correctly what they did. Anyway, a good move by them, it will no doubt pay off for their business.

I don't see this as a sign the market is too greedy. The main part of the bull run is clearly JUST starting. Institutional investors are just starting to get in and will no doubt put a lot more money in next year and onward after whenever the inevitable blow off top and crash comes. Retail investment mania hasn't even started, right now its big money making long term investments leading the way and pushing the market up. I'd say the greed hasn't even started yet, might be another 3-6 months before we even start to see the retail market really start to frenzy in again, once average people start to realize it's not just gonna crash around $20k again For instance, my mom has been urging me to sell some of my long term bitcoin recently because she thinks it'll just crash 80% again like it did last time at $20k, i tried to explain to her that is laughable and she doesn't understand the market, but I bet most people are thinking that way right now, once they realize it kept going up after it hit $20k they will start FOMOing in. Likely vast upside for roughly another 12 months - hundreds of percent upside still to come this cycle. Right now big money is just building the base, and microstrategy is part of that.

To note, Mass Mutual just put $100 million in, and that was likely just an initial purchase to see how it goes. They have $235 billion fund so it is very likely we'll see more 9 digit buys by them in the near-to-mid term. Some other investment firm as was reported earlier this month is planning on soon (I think in january?) allocating $500+ million of one of their funds. I just saw today it was reported that some UK fund in november put 2.5% of their fund in bitcoin for a 550 million pound ($744 million in USD) buy. And of course we've got $635 million buy coming from Microstrategy. Plus of course a weekly inflow of 9 figures from Grayscale buys. Like I said, this is base building as big money starts slowly wading into Bitcoin. It will take years for big money to even get a couple percent of their money into Bitcoin, because the Bitcoin market is simply too small for them to get in quickly. Like JP Morgan speculated recently, the Mass Mutual buy could be the start of insurance and pensions funds putting 1% of their funds into Bitcoin, and even at 1% that'd be $600 billion, so with the entire BTC market cap under $400 billion right now, even that 1% just from two investment firm sectors will take years to come into Bitcoin, meaning we will gradually see institutional money continue to pile into Bitcoin for many years to come. Microstrategy taking on debt to buy at $20k is the surest bet in the world as long as they can service the interest on any debt in the meantime.

Sorry for the long reply haha. tl;dr is Microstrategy made a very smart move and the market is only just starting to explode in this market cycle.

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I hadn't heard the news about Microstrategy. Pretty nuts, really. I'm not sure how I feel about it. It seems kind of greedy, actually. Citibank downgraded MSTR to "sell" after the move: https://www.coindesk.com/bitcoin-short-microstrategy-index

What Microstrategy is doing is issuing $550 million via debt instruments to buy BTC. Instead of just putting cash in, they are essentially doubling down on their BTC bet with leverage. As a contrarian trader, that makes me wonder if the market is just too greedy right now.

Speaking of which, the Fear & Greed index is still at 94. Greed is usually punished with severe shakeouts.

I agree that these large block OTC deals are building a strong support for BTC price. BTC has been steadily flowing out of exchanges to cold storage and OTC deals since March, and the recent run up to 20k has not reversed this trend,

so there is definitely more momentum remaining to carry BTC comfortably above 20k in the near term...

Many potential reasons to hinder the ongoing progress of bitcoin trying to reach $20k, and as we desire to hit that value; many individuals also hope it could go down. Their aim is to ride with another price increase, so they were expecting to get last chances of gaining sustainable profit. We don't know how long it takes to overtake $20k, it might be a surprise which cannot be predicted.

yes it will be very possible, especially since Bitcoin has tried to breakout several times,
and indeed always failed, and caused this correction to occur,

Yeah I think there was a little money waiting for 3 years to sell at a profit from people who got in at the tail end of 2017 and don't understand the Bitcoin market at all so were just hoping it'd get back there so they could sell - they sold without realizing it is going to go much higher soon, but I doubt much selling has been from that.

It definitely is more so, as you say, from the combined ATH + $20k psychological levels, in combination with the fact that Bitcoin just went up nearly 50% over the course of like a month and a half. There's profit taking after the run, there's selling around and underneath the double resistance level of ATH and $20k.

Bitcoin taking $20k and then that starting another rally for at least a few thousand more is very likely in the near future. I expect it is likely to start later this month. While I was expecting a solid correction at $16k, and again at $19k, that never came and it is holding well in the $18000s and $19000s. I think simply too much supply has been eaten up by institutional buyers the past few months, and continues to get eaten up by GBTC and the like on a daily/weekly basis, and there just aren't enough sellers anymore at sub-ATH prices to move the price down for a classic 30-40% correction. All three corrections recently ($16k to $14.3k, $19k+ to $16.2k, and the current $19k+ to $17.6k) have all failed to last or do anything other than turn into a shallow bear trap - and notice from those bottom numbers that they are running out of steam.

MicroStrategy is have a $550 million stock sale in the next few days for the expressly stated purpose of putting that money into Bitcoin. With MicroStrategy planning to buy another half billion in Bitcoin (presumably this month) I think the supply shock that causes (they buy through Coinbase) and the news of when that happens alone could be enough to send the market crashing up through $20k. Bitcoin supply up for sale is getting increasingly thin and is increasingly being held in the hands of long term investors. Price can only stay under $20k for so long. All signs point to more massive gains in the near-to-mid term.

I have a feeling we might take another 2 months or so to breach $20,000 but once we do we’ll see a sustained rally to $25,000 or more. There’s lots of selling pressure around $20,000, there always is close to round numbers but once that psychological barrier is crossed I think an even bigger move up is likely.

Most of them bought bitcoin around $20k level are because of the FOMO and as a consequence of FOMO, they would turn to panic sell and shake their hands when price has 15% or 30% drop. In the past 3 years, bitcoin has many falls like that and I thought as same as yours, those FOMO people already shaked their weak hands in 2018. It is not simply because they don't have enough patience to wait for 3 years but because they don't have true belief in bitcoin, don't understand bitcoin and its protocol. Price trend flipped from bullish to bearish and they went into panic easily. They shaked their hands and capitulated.

Resistances and supports flip each other and the strong resistance at $20k level will flip to be a strong support in future. I believe it will be flipped because my strong belief in higher price for bitcoin. It does not mean even if bitcoin rises to $40k level, it will never dip to $20k level. Bitcoin is crazy and everything can be possible with its movements.

I doubt that there are too many people at around $20k level who have been waiting for the past 3 years just because they bought around those prices. Sure there could be some that put up orders there and left, and will be happy to hear they cashed out when that happens, but I doubt people have enough will to just wait for 3 years constantly watching what is going on.

This is why I would like to say that there are newer people into this that sells during that level, and combined with the old ones they grow in numbers specifically there because it is easier to establish your order at a place that already has a small base instead of creating a new one. This is why I highly suspect that there are some sellers there but when we buy them all, there will be nobody left to worry about.

I don't think it is actually "people who have been waiting for years" that are creating the resistance at $20k. It is all about $20k being the previous ATH and a round number which makes is a perfect psychological barrier where people sell at no matter when or at what price they bought their bitcoins. They might have entered last week at $19k and are now selling at that resistance just because it looks "too high"!

We had this during 2017 too but since the ATH of that time was at $1200ish we had 2 psychological barriers at $1000 and $1200 with the later being stronger.

Sell pressure from retailers bought in all time high range was washed out in hopeless bear market in 2018 I believe so.

$20k is a very strong resistance everyone knows that but how many of traders are thinking that it is a strong resistance and it won't be break in this year, how many of them believe the resistance will be broken. It is important as the market often moves in the direction that most of people don't think it will move like that.

I watch the history charts and I feel the altcoin runs are about one month after the run of bitcoin. Bitcoin runs and reaches peak then one month later altcoins hit their peaks and after that the bubble bursts with a correction from 30 to 40 percent.

Possible, but there was never much volume traded at these levels, since the peak in 2017 was so short-lived. I think most of the buyers in the $18K-$20K range from 2017 were washed out long ago, during the bear market.

I think there is selling pressure in the ATH range more so because of the expectation of technical resistance. People are expecting a long term double top (highly unlikely), and the round numbers theory is also in play given resistance at $20K. There is also the fact that BTC simply hasn't pulled back much at all this entire rally since March, so people are wary about one of Bitcoin's classic shakeouts.


Once BTC moves above $20K with authority, I expect altcoins to stagnate during BTCUSD rallies and pump during BTCUSD sideways. That's the usual bubble dynamic. If we're really lucky, we might see something like March 2017 eventually, where BTC crashes 30-40% but ALT/USD pairs still rally. That'll indicate true altcoin bubble conditions. Very easy money.....

Through the last 1-2 weeks we've observed that selling pressure increases as BTC approaches 20k, very likely that most people who have been waiting for years for these levels want to sell gradually at least part of their holdings...

If / when BTC stabilizes around 20k in the new year or even if it's rejected but holds steady somewhere below, it would be a natural development in my view for select altcoins to start making greater gains in comparison...

All charts on this topic taken from cryptoquant.com; as the BTC price steadily increased over the last few months, the BTC inflow to exchange wallets remained stable (far below March 2020), and even slightly declined.

One of the strongest indicators that market sentiment continues to be bullish, and despite today's pullback, a new ATH is highly likely to be reached soon, before 2020 is over: