Strate𝔾 Update - Week 4 | Q1 | 2024
The FOMO in stocks will hit crypto sooner than later
Please note that while I can provide information and insights based on my knowledge, it's important to remember that I cannot offer specific financial advice. #nfa
Strate𝔾 Channel update December: LINK TO YOUTUBE
Key take aways
Net inflows to Bitcoin ETFs equates to +16,836 in the first week (other ETFs minus GBTC).
January 31st: upcoming FOMC meeting, likely the FED will pause again.
The blowoff top has arrived for stocks as both S&P 500 as Nasdaq-100 have reached again fresh ATH’s this week and closed the week at those higher levels as well.
News of this week
Core PCE YoY came in at 2.9% versus 3.0% expected. This preferred gauge of the FED for assessing whether their policy is working in regard to inflation control is rapidly descending to their 2% goal. However, the chance that the FED will pivot (i.e. start cutting rates) w.r.t. its interest rates during the January 31st FOMC meeting is still calculated at a 3.1% chance (source CME FEDwatch). It’s expected that the FED will pause the rate at the current level of 525-550.
The net effect of the ETF approval is a +16,836 $BTC inflow (per Jan-25). So the GBTC sell-pressure is therefore overruled by inflows to the new ETFs. The GBTC sell-pressure can be divided in three groups: 1) people taking profit who joined the fund at a huge discount last year(s), 2) people moving funds from GBTC to other ETFs with up to 6 times lower fees (fake sell-pressure), 3) ETF companies moving funds from GBTC to their own ETF.(fake sell-pressure) —> ETF Overview
Crypto․com reports a surge in the number of cryptocurrency owners, reaching 580 million in 2023.
On January 22nd, Jim Cramer expressed skepticism, stating it's doubtful that Bitcoin would stabilize. However, a strong bounce followed shortly afterward.
Tesla reveals that none of its $435 million worth of Bitcoin was sold in Q4 2023.
The US national debt hits a new record, soaring to $34.1 trillion.
The SEC postpones the approval of BlackRock's and Grayscale's Spot Ethereum ETF.
The US Government files a notice to sell $130 million worth of Bitcoin seized from the Silk Road.
Bitcoin (BTC)
Current status 100% Winning strategy: 🔵
This week price witnessed a dip below the green zone (0.618-0.786) within the rising channel, which commenced at the 2022 bottom. The 0.5 level was tested followed by a V-shape recovery. Currently price is set to close within the green band, showing a nice reversal ‘hammer’ candle. The next two minor resistance zones to the upside are the zones centered around $47.4k and $57.1k, as the traded volume at these levels spikes.
While a lot of people are anticipating price to retrace further before the next halving in April-24, in my opinion it’s more likely we have a major run-up. When comparing the recoveries of the previous bear markets, price is already at the point of flipping the green band to support after getting rejected at the 0.786 line. After this test, previous 3 times, the parabolic move started immediately. With diminishing returns, it could be very well the case price tops before the halving at about $200k. Especially now stocks are already printing ATHs about every day, markets are really switching to risk-on, which always has been beneficial for crypto. Breaking the $50.7k mark would most likely activate the most robust phase within the parabola.
I also want to bring your attention to the chart below containing all price data since 2009. Historically, before each halving event, the upper trendline of the black channel on the symmetrical log chart was touched—except for this time (so far). From an Elliott Wave perspective, it makes a lot of sense that the final upward wave is of the steepest form imaginable. If the halving event turns out to be a 'sell the news' scenario, most people might be caught off guard, don't you think?
1.618 → 2.272 Theory (update)
Comparing the recovery and extension of the 2011, 2014 and 2018 bearmarkets, the following repeating structure is observed.
🟢 First Struggle to overcome the 0.618-0.786 before ATH.
🔴 Second Struggle to overcome the 1.618 extension resistance.
When breaking through the 🔴 1.618 resistance, previous 2 times price flew within 1-3 months to its next cycle top at around the 2.272 extension. Guess what, the 2.272 extension of the 2018 bearmarket lies at $205k.
Here the updated chart:
2Y+ channel - Update
Price keeps tracking the parabolic surge of W5 before the halving. After the struggle of months (compare red circles), Bitcoin has succeeded to overcome the gravitation of the 2.25Y+ descending channel.
The main Fibonacci extension targets of W4 are at $150k, $170k and $220k, where the last one aligns closely with the upper trendline of the supermacro channel on the symmetrical log scale (two charts above).
It's important to note that W5, being a blow-off wave, might exhibit a steep ascent as depicted, but the key point is that there's one final impulse left.
Here the updated chart:
Elliottwave count:
W1: 1st impulse
W2: 1st correction (zigzag, sharp)
W3: 2nd impulse (momentum)
W4: 2nd correction (expanded flat)
W5: 3rd impulse (blow-off, next up)
Flat correction?
Regarding the nature of the correction, yes, W4 retraced only 50% of W3 in a complex expanded flat pattern of ABC. In contrast, W2 was a sharp zigzag correction, retracing 90% of W1.
Step-like formation - Update
BTC still follows the parabolic structure to reach $200k before May this year. The long awaited impulsive bust to $60k+ in the shortest period of time has started. In the mean time price is far above Base 3 already and on it's way to Base 4. Note that the sketched trajectory is a structural expectation, not exactly timewise.
Here the updated chart:
Elliottwave count:
Wave 1: Base 1 to Base 3
Wave 2: Base 3 (Flat)
Wave 3: Base 3 to Base 4
Wave 4: Base 4 (Likely sharp)
Wave 5: Base 4 to SELL POINT