If you read enough CrytpoTwitter, you will find an unfortunate fact. Nobody believes Bitcoin (BTC) can go up.
If you try to suggest such a thing, they laugh at you. We saw a response to a bullish tweet from a guy with a chimpanzee as an avatar. “Mr. Chimpanzee” suggested Bitcoin (BTC) was going $1,600.
This sentiment by itself sets Bitcoin (BTC) up for a major gap move higher.
If you look at Bitcoin (BTC) on BitMEX, the recent base has people looking at low time frame charts and missing the point. The recent consolidation has been virtually untradable, but that is what makes it so bullish. People are depressed and upset. So when you talk about Bitcoin (BTC) mooning, they can’t hear it.
This type of sentiment is powerful when you consider that XBTUSD may be headed for what Elliot practitioners call “3 of 3.” That implies that the main part of an uptrend is about to unfold (Figure 1).
Drilling into the details, wave 1 was the move off the December lows that culminated with the move above $4,000. Wave 2 is the demoralizing consolidation. We believe wave 3 will be a massive gap move to $6,000. If you don’t own Bitcoin (BTC) before the up move starts, you won’t be able to buy it on the way up.
While we don’t know exactly what the catalyst might be, we have a pretty good idea.
Recently, economic data has been awful. Housing starts today just collapsed as California buyers have disappeared. While the weak economic data should be making bonds go up, bond are instead going down (Figure 2).
Why are bonds going down? Why is the long bond ETH (TLT) breaking its 50-day moving average (red line)?
The answer is simple. The current political narrative in the United States is moving aggressively towards socialism funded by loss of Fed independence and massive printing of money. Luckily, we were early to spot this theme.
Now, the mainstream media is picking up it. FT this morning ran a piece showing QE has led to AOC. Like her or not, every time Congresswoman Alexandria Ocasio-Cortez (AOC) talks “Medicare for All” or “Green New Deal.” it implies the U.S would have to print twice what it already owes ($22 Trillion) to implement the policies. To print say $50 trillion, it would imply loss of Fed Independence and a complete disregard for the value of U.S. Treasury bonds.
The loss of confidence in sovereign nations has begun.
Bottom Line: If you don’t believe us on this, that’s ok. Mr. Market does. In our view, Bitcoin (BTC) has bottomed and is going to move massively higher. The day we have been waiting for where people run to crypto to get away from government irresponsibility is coming very soon. AOC is now Bitcoin’s (BTC) best friend. We believe you are going to have to have a core long position in order to catch the next big leg.
It’s time to get on board with the Crypto.IQ Trading Desk. You can’t afford to miss what’s next.
Come with me as the new day dawns.