I know at this point, especially when Bitcoin could potentially fail to breakout of the Bull support band, many people are worried about their Bitcoin & other crypto holdings. Whether to relinquish or hold???
In such circumstances, would be best to remove emotion component out of the equation, and be robotic in our analysis, i.e. using math, risk reward, Bitcoin on-chain and Technical analysis to come out with best mathematical course of action.
On-chain analysis update. Credits to Glassnode and for feed idea.
As a proportion of Sovereign Supply, Long-Term Holders have seen their ownership stake increase by 4.8% to reach 74.8% of sovereign supply. To close out the year, LTHs now own 74.8% of all coins outside of exchange reserves, whilst STHs ownership has declined from 28.0% in Jan, to 25.2% today.
This modest transfer of wealth from Short-Term, to Long-Term Holders, despite multiple price ATHs, suggests that 2021 is best described as a macro consolidation, and a period of modest accumulation. Such on-chain behaviour is more typically observed during Bitcoin bear markets, which in hindsight are effectively lengthy periods of coin redistribution from weaker hands, to those with stronger, and longer-term conviction.
In short, sideway accumulation would often follow with prolonged Bull rally.
(After 2019 sideway consolidation, BTC rallied from 10k to 60k in half a year)
Technical update
Based on the weekly timeframe, if Bitcoin fails to breakout of the Bull Support Band (i.e. above 53.2k), there's a high chance that price will go south to test the low again. (As depicted in Red in attached chart)
Then again, we have our GOAT TA support at 39.5k as another round of defense. This TA has held true since Genesis of Bitcoin. Refer to
If there's a high chance that Bitcoin will go south to test the low again, then why aren't you relinquish now??
In making decision to hold or sell, we have to ascertain the risk reward profile. In view of on-chain analysis that is clearly showing that 2021 is a macro consolidation and having GOAT TA support, risk reward to hold onto Bitcoin gives an asymmetric returns (risking 1 unit to gain more than 5+ units),
We have a lot of scary times.
In April, we had the summer drop.. We got through it..
In September, we had the September pullback. We got through it.
Is there a chance that I could be wrong?
Yes!
There's no such thing as 100% certainty that whatever I said will come true. I do not have a freaking crystal ball.
However, in trading securities, there is never "no risk" in investing. In fact, the biggest risk is not taking risk at all!
In such circumstances, would be best to remove emotion component out of the equation, and be robotic in our analysis, i.e. using math, risk reward, Bitcoin on-chain and Technical analysis to come out with best mathematical course of action.
On-chain analysis update. Credits to Glassnode and for feed idea.
As a proportion of Sovereign Supply, Long-Term Holders have seen their ownership stake increase by 4.8% to reach 74.8% of sovereign supply. To close out the year, LTHs now own 74.8% of all coins outside of exchange reserves, whilst STHs ownership has declined from 28.0% in Jan, to 25.2% today.
This modest transfer of wealth from Short-Term, to Long-Term Holders, despite multiple price ATHs, suggests that 2021 is best described as a macro consolidation, and a period of modest accumulation. Such on-chain behaviour is more typically observed during Bitcoin bear markets, which in hindsight are effectively lengthy periods of coin redistribution from weaker hands, to those with stronger, and longer-term conviction.
In short, sideway accumulation would often follow with prolonged Bull rally.
(After 2019 sideway consolidation, BTC rallied from 10k to 60k in half a year)
Technical update
Based on the weekly timeframe, if Bitcoin fails to breakout of the Bull Support Band (i.e. above 53.2k), there's a high chance that price will go south to test the low again. (As depicted in Red in attached chart)
Then again, we have our GOAT TA support at 39.5k as another round of defense. This TA has held true since Genesis of Bitcoin. Refer to
Inserted Video
If there's a high chance that Bitcoin will go south to test the low again, then why aren't you relinquish now??
In making decision to hold or sell, we have to ascertain the risk reward profile. In view of on-chain analysis that is clearly showing that 2021 is a macro consolidation and having GOAT TA support, risk reward to hold onto Bitcoin gives an asymmetric returns (risking 1 unit to gain more than 5+ units),
We have a lot of scary times.
In April, we had the summer drop.. We got through it..
In September, we had the September pullback. We got through it.
Is there a chance that I could be wrong?
Yes!
There's no such thing as 100% certainty that whatever I said will come true. I do not have a freaking crystal ball.
However, in trading securities, there is never "no risk" in investing. In fact, the biggest risk is not taking risk at all!
Attached Image (click to enlarge)
