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But Of Course!
Now that a great many souls’ savings have been lost in the Great Crypto Dump of 2022, and, still more amusing to the whale community, that a number of undesirables are being extracted from the plumbing - your Bankman-Frieds, your Silvergates, more to come no doubt - and that as a result a great many investors have turned their back on crypto - now the stuff starts moving back up again, and quickly too.
Wall Street 101.
Here at Cestrian we are too young to dismiss crypto with the ‘Bah Humbug!’ cry you see all through Boomertown; but we are too old to buy all the naiive and/or psyops garbage about crypto freeing you from government supervision, whilst also making you thinner, happier, more productive etc etc. Crypto to us is just a risk asset class like any other, and in some ways it is the purest asset class of all since it possesses no fundamentals, it’s pure sentiment.
We focus entirely on Bitcoin and Ether, since there is grownup money in these names whereas the long tail of altcoins is much harder to decipher as regards which are serious and which are just playthings. Bitcoin and Ether are, we believe, here to stay. Because the young people - digital natives - treat these things as things, the old people - who run the plumbing of major financial structures, your Jamie Dimons and so forth - have to treat them as things.
And if they’re here to stay, and driven by pure sentiment, they can be analyzed using tools designed to measure sentiment. We know of no better such system than Fibonacci extensions / retracements and Elliott Waves. And it’s confirmation to us that both Bitcoin and Ether trade so well to standard wave / Fib patterns.
We’ll look this week at how BTC and ETH have performed to the depths of the 2022 lows looking through this lens.
Today - Bitcoin.
This is the CME BTC Futures chart. You can open a full page version, here.
From the 2018 lows we see a Wave I up peaking in mid-2019, then a Wave II down troughing a little below the 78.6% Fib retrace of that Wave I - that’s at the Covid crisis lows. Then a huge Wave III up peaking a little below the 5.618 Fib extension of that Wave I. That is, again, a HUGE Wave III. Then a big Wave IV down finding support at the 61.8% Fib retrace of the Wave III; and then a final Wave V higher that peaks just above the 61.8% extension of Waves I+III and a little above the prior Wave III high. These are all textbook levels in this system by the way.
That Wave I - Wave V cycle forms a larger-degree Wave One up as indicated. And as sure as eggs is eggs, comes a larger-degree Wave Two down which bottoms right at the, you guessed it, 78.6% Fib retrace of that Wave One up. Voodoo!!!
So much for the dump.
What about on the way back up? For our paying members - Premium or Pro levels - we’ll walk you through how we think Bitcoin will play out in the near term. If you’d like to become a paying member you can sign up from the button below - remember that until the end of January you can subscribe to our new Market Insight Pro tier for just $499/yr, which is half off the rack rate. 1 February that rises to $999/yr.
Any problems with upgrading, you can always reach us at this link.