Hi traders, let's talk Bitcoin.
Technicals.
If, like me, you're a multi-months swing trader at heart, this chart should look pretty obvious to you.
Bitcoin is in a textbook phase of accumulation.
Flat, boring, sideways, narrow trading range, it's all here.
As we explained over a week ago when we called a bottom, the market these days shows striking similarities to 2015.
Bitcoin in 2015:
Bitcoin in 2018:
This could be the time of maximum financial opportunity.
Analysis.
Today's price action is a reflection of the market finding a fair price for Bitcoin around the $6000 mark.
This fair pricing includes two components:
- Bitcoin's fundamental value as a completely decentralized, digital, hard money.
- Bitcoin's potential upside as an worldwide investment vehicle through an ETF.
These two components allow the market to build a narrative which justifies investment in the crypto-currency.
In the case of Bitcoin, it's the digital gold narrative.
Narratives are powerful things in a market. Take Tesla for example.
As a car company, Tesla has never made a profit. Yet, despite its terrible performance (strictly in terms of cash flow), Tesla's stock has accrued tremendous growth in the past 5 years.
This performance has befuddled analysts and bears. Some of them have been shorting the stock since $90.
Source Tesla and the Cult of Elon Musk. Are We Seeing a Bursting Bubble in Tech? | Mark Spiegel
The reason why Tesla is doing so well against all odds? Elon Musk and his fantastic powers as a story teller.
A base on Mars by 2028? Done.
Moving goods up to 600 miles/hour through tunnels? Sure!
The narratives that drive massive, irrational investment behind Bitcoin and Tesla share the same roots: in a age of unprecedented peace and capital abundance, narratives provide meaning, a sense of purpose and grandeur to financial risk taking.
Back to you traders, what are your favorite narratives in the crypto space?
Until then,
FØx.
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May the FØx be with you.
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by FØx
