On the brink
With the election less than a week away, earnings for several big companies coming out extremely positive, and the markets rallying, we’re on the brink of a big move. If you read my last post, I was comparing Bitcoin’s chart/price action structure with that of gold. Both were forming a clear and simple cup and handle pattern, indicating that a thorough accumulation phase had taken place and late/last exits were being made before a significant move to the upside. With that thesis seeming to be playing out, let’s take a closer look at Bitcoin’s price action in 2024:
As is clearly shown above, there was a significant move to the downside preceding a run up towards the levels that the price trades at today. The handle part, which is approximately the 1/6th of the chart on the right hand side, is interesting in itself. Price had a significant move to the downside like 5 different times in a 6 month period, and each of those extreme moves to the downside were relatively quickly absorbed and pushed back to the upside. At a very basic level, this shows me a lot of strength in the sentiment towards BTC as an asset, as any washouts are quickly being swallowed up and pushed back higher. In most cases, any more than 2-3 significant flushes would scare holders into selling further down. However, here we see that for whatever reason, the market is stubborn in holding in a choppy trend, not allowing for real bearish moves on higher time frames. What we see today, which is the price on the most recent candle, is that there is a structural shift in the market. Price has now pushed back towards the all-time high quite stubbornly after a long period of choppy action. There seemed to be a generational support around the 48k region, which was almost tapped, but quickly eaten up and turned into a long wick. Overall, the market was hungry for cheap Bitcoin and the price action reflected that.
Considering the amount of war scares, regulatory messes, flip-flopping politicians, and ever-present scams, I think that the market held up quite well and showed remarkable resilience. I am confident on a high time frame that the sector will greatly appreciate in price. That being said, short-term price action can be a bit confusing given what we have ahead of us.
As the election nears, I think that financial sentiment and market movement may be pricing in a Trump win here. However, I don’t think that this is necessarily a good thing in the immediate short-term. The way I currently see it, if markets are pricing in a Trump win, price will continue to climb and even break ATH leading into November 5th. On that day, if Trump wins, we can see a sell-the-news event where there is a momentary flush of 3-5%, but this will quickly recover through the month and lead into a Christmas rally. On the other hand, if Harris wins, I can see another flush, maybe more extreme, that might lead to a bit of a delayed rally and maybe a couple of weeks of choppy price action. In both cases, I see BTC and crypto as a sector massively appreciating over the next 6 months. However, I’m on the more cautious side going into the election and the week or two that follows, because I can see both events leading to momentarily lower prices.
BUT I am an ape and this could all just be overthinking. It could just be Trump win number go up, Harris win number go down. You never know with this volatile market!
