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Seeking Alpha 2023-03-21 23:39:44

Bitcoin Is Beginning Its Next Long-Term Uptrend

Summary Bitcoin's past six months of price action closely resemble its 2014 Mt. Gox bear market. This pattern suggests Bitcoin has entered the next bull phase of its global monetary adoption process. According to this forecast, early-2023 is the third-best Bitcoin buying opportunity of all time. During the next 1.5 years, Bitcoin's price should accumulate with an upward bias, supported by the 30-week Simple Moving Average and the Power Law bands. Bitcoin ( BTC-USD ) is in its most transformational period ever . The aggregate fundamental, technical, economic, and geopolitical dynamics suggest Bitcoin is beginning a new long-term uptrend. According to Bitcoin's past decade of cyclical price action, Bitcoin's current bull market began in November 2022 and is due to peak in early-2025. BTC:USD - 1W, Elliott waves, Power-Law bands, 30W-SMA, Technology Adoption stages (TradingView 3/16/2023) Therefore, future successful cryptocurrency investors should identify the winning protocols now . This article extrapolates global economic and technological trends to determine Bitcoin's long-term price targets. Bitcoin Is At An Inflection Point; 2023 = 2015 Bitcoin is a next-generation technology with intense growth potential. As indicated by Bitcoin's accelerating total wallet addresses , the adoption of Bitcoin's cryptographic verification technology is exponentially increasing . Bitcoin: Total Active Addresses (LookIntoBitcoin) Bitcoin's technical, on-chain, and cyclical charts are synergistically bullish. Most of the 50+ data visualization charts from LookIntoBitcoin suggest BTC is trending deeply bullish from long-term bottom support at $15,500. The Puell Multiple, Value Days Destroyed, RHODL ratio, MVRV Z-score, and Pi Cycle Top indicators suggest Bitcoin has two years of potential upside. Bitcoin: Value Days Destroyed (LookIntoBitcoin) Bitcoin's bullish price action and positive user growth metrics pair nicely with geopolitical headwinds that can sustain Bitcoin's growth in the long term, including: Sustained high inflation: due to ever-increasing government debt ceilings, I expect global fiat currency inflation will stay over 4% until a Great Depression in 2030. State-funded virtualization: central banks worldwide are cooperating to create digital currencies, IDs, and smart cities . Increased information censorship: Unfortunately, internet censorship continues to increase. Eventually, this oppression will likely spread to money through CBDCs, causing mass-frustrated citizens to flock to Bitcoin. Therefore, the total data suggests Bitcoin is experiencing an inflection point in its global monetary adoption process. Bitcoin is here (Author) Human technology adoption follows a 5 stage growth pattern of Innovators, Early Adopters, Early Majority, Late Majority, and Laggards. Similarly, global monetary adoption follows a 4 stage pattern. As monetary adoption proceeds, public perception of the underlying asset shifts between Collectible, Store of Value, Medium of Exchange, and Unit of Account. As technological and monetary adoption are both fueled by human cognition, each stage of the adoption process has correlating ideals and principles. Inflection points in the technological/monetary adoption process occur alongside drastic changes in public perception. During 2012 - 2015, Bitcoin was widely perceived as a Collectible. Consequently, Bitcoin was sold on 'Mt. Gox,' a website for digital trading cards. During 2015 - 2022, Bitcoin was perceived as a Store of Value. During this period, we have seen the rise of centralized cryptocurrency exchanges, Bitcoin investment products, altcoins, and DeFi. During 2022 - (unknown), Bitcoin will be seen as a Medium of Exchange. Going forward, people will increasingly use Bitcoin to buy and sell goods. Each 'inflection point' in technological/monetary adoption is a cycle of death and rebirth that causes the underlying asset to grow stronger. Bitcoin's previous inflection point occurred between 2014 to 2015 when Bitcoin left its Early Adopters Stage. This shift in public perception caused Bitcoin to evolve from a Collectible into a Store of Value. Bitcoin Golden Ratio Multiplier, Technology / Monetary Adoption Inflection Points (LookIntoBitcoin 3/17/2023) Currently, Bitcoin is experiencing its second inflection point. Bitcoin is leaving its Early Majority stage and entering the Late Majority stage of its technology adoption process. Simultaneously, Bitcoin is monetarily evolving into a Medium of Exchange. Over the next two years, I expect Bitcoin's daily user count will grow drastically to reflect this inflectional shift. Bitcoin User Metrics (BuyBitcoinWorldwide) To determine Bitcoin's long-term price targets, we further analyze Bitcoin’s Elliott wave patterns, previous bull markets, and the 30-week Simple Moving Average and Power-Law bands. Bull Markets Climb A Wall Of Worry; Bitcoin Bottom = $15,500 Fundamentally, Bitcoin's price action follows Elliott wave chaos patterns. 'Elliott waves' are cyclical and estimable patterns of mass human emotion. Elliott waves are fractal , appearing chaotic on short timescales and ordered on long timescales. To trade Bitcoin (or any asset) successfully, it is essential to identify the highest timescale Elliott waves. To begin, Bitcoin's Daily chart completed a significant A-B-C wave corrective bottom with its November 21st, 2022 crash to $15,500: BTC:USD - 1D, Elliott Waves (TradingView 3/16/2023) Zooming into Bitcoin's Weekly chart, we can see that Bitcoin's 2022 downtrend is a correction in Bitcoin's all-time bull trend . Bitcoin's -78% decline from $68,984 to $15,500 fits precisely as Bitcoin's third bull market correction. Bitcoin's Weekly Elliott waves, Power-Law bands, previous bull markets, the 30-week Simple Moving Average, and the Technology/Monetary adoption inflection points provide the whole picture: BTC:USD - 1W, Elliott waves, Power Law bands, 30W-SMA, Technology / Monetary Adoption stages (TradingView 3/16/2023) Shown above, Bitcoin's 2022 downtrend was the 'death' of its Early Majority stage. This death is visually observable as the completion of Bitcoin's 2012 - 2022 Elliott wave pattern. Bitcoin's 2022 downtrend effectively killed all unnecessary Early Majority-era investment narratives and concluded a decade-long bull trend. Furthermore, Bitcoin's Power-Law bands show that only during the 'Mt. Gox' fiasco in 2014 were conditions equally bearish to 2022. This is because 2014 was Bitcoin's previous technology/monetary adoption 'inflection year.' Therefore, Bitcoin's 2022 low may become Bitcoin's 3rd best buying opportunity ever. As of early-2023, Bitcoin is in another process of rebirth . Bitcoin is climbing from its 2022 pit of death into its next bull cycle. Alongside this, the human perception of Bitcoin is evolving. BTC:USD - 1W, Elliott waves, Power Law bands, 30W-SMA, Technology / Monetary Adoption stages (TradingView 3/16/2023) I believe Bitcoin is in the bullish accumulation range of its next long-term uptrend. During this phase, the 30-week Simple Moving Average and the Power-Law bands typically act as support. Investors who buy dips on these indicators (without leverage) should outperform over the next two years. BTC:USD - 1W, 30-week SMA vs Power Law Trend (TradingView 3/16/2023) According to Bitcoin's past decade of cyclical price action, the next long-term top should occur within two years , peaking at $100k - $500k between March - April 2025. Bitcoin Downside Risk - Traders Must Stay Alert Although Bitcoin is bullish in the long term, there is still a very high downside risk. More 'black swans' can and will occur! When they do, I believe they should be bought. For this reason, it is essential to keep cash on the sidelines and begin dollar-cost-averaging now. Shown below is TrendSpider's automated Daily trendline analysis. Bitcoin is currently near the top of an expanding triangle at $28k/BTC. If Bitcoin breaks $28k, it can move higher to $32k. Conversely, if $28k holds as resistance, then Bitcoin can fall to $24k, $20k, or $18k. BTC:USD - Daily trendlines (TrendSpider 3/19/2023) Conclusion Bitcoin is experiencing its most transformational period ever . Public perception of Bitcoin is changing. Consequently, this should have a bullish impact on price. Bitcoin's fundamental, technical, cyclical, economic, and geopolitical dynamics are bullish in the long term. However, short-term market conditions remain bearish. For this reason, investors should stay nimble, begin dollar-cost-averaging now , and remain patient for any dumps to the 30-Week Simple Moving Average or Power-Law bands.

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