$30k Bitcoin?
BTC Tests Key Support
Welcome to The Bitcoin Binge Letter!
Market Analysis
Target Range: $30,000-38,000
Short Term: Bearish
Long Term: Bullish
Summary
Bitcoin and traditional markets saw steep corrections last week. Trading within a tight range between $40,000-44,000, bitcoin failed to hold the level.
The drop below $38,000 opened up the mid $30,000s and ultimately puts $30,000 back on my radar. $30k is implied lower long term support.
With the exception of testing $30,000 during summer 2021, bitcoin remained above that level for the entire year. So far in 2022, that remains true.
Traditional markets dropped alongside bitcoin and crypto markets this past week, continuing a further selloff spurred by FED announcements and renewed COVID variant fears. The tech sector in particular is getting hit harder than most, giving up gains experienced throughout the pandemic.
It’s important to note that January can be a rocky month for traditional and crypto markets. What happens this month doesn’t necessarily provide insight for the rest of the year. In bitcoin, even during the 2021 bull run, bitcoin saw a near 25% correction when it tested $40k mid January before pulling back to $30,800. We’re seeing almost the same thing happen one year later.
$30,000 is the lower level to watch. On the upside, bitcoin needs to retake $38,000 before testing $42,000 again. Long term, I still see a larger positive bounce occurring toward the end of Q1.
Price Watch
Target Range: $30,000-38,000
Short Term Upside: $42,000
Short Term Downside: $30,000
$42k broke. So did $38k.
Traditional markets selling off isn’t helping crypto. Bitcoin took itself and the broader markets down to current levels. That said, we’re still seeing typical trading activity during periods of volatility.
Whales continue to buy cheap coins and newer retail buyers are selling off. Once the selling is exhausted, we should see those same retail buyers reenter.
Long Term Upside: $67,000
Long Term Downside: $30,000
These levels remain. Long term (3+ months), I remain bullish and believe that if $30k holds, recent volatility will only reinforce it as long term support.
We’re approaching 13 months where bitcoin has held above $30k. That’s huge. The longer bitcoin remains above $30k, the more bullish I am long term.
Beyond the Price
take a deep breath
Throw price aside for the next few days and take a moment to appreciate how far bitcoin has come. It continues to change the world and empower people.
Revisit my 2021 year in review post for a recap of the three biggest stories in crypto. The last year made me more bullish on the entire industry moving forward.
My Crypto Portfolio
64.7%—BTC
29.4%—ETH
3.3%—ADA
2.6%—RVN
I bought the dip
The market correction has increased my bitcoin holdings relative to altcoins. As is typical during broader bearish moves, altcoins sell off harder than bitcoin.
I also bought some bitcoin, including establishing a weekly buy that I’m going to maintain for all of 2022. On the mining front, ravencoin had its halving. Unfortunately, the crypto market corrected immediately following the halving so a temporary 15% that RVN saw in the days following the event was quickly wiped out.
I continued mining ravencoin until I hit a number of RVN I had in mind to hold on long term spec and wait for a price jump. Once I hit that target number, I switched my mining rig to start mining ethereum classic (ETC).
I did this for 3 reasons:
it’s more profitable
frequent payouts
easy to convert to BTC
ETC is slightly more profitable to mine than RVN and I can continue to receive near-daily payouts directly to my crypto wallet.
I’m mining ETC entirely to convert to BTC. Because I want to continue to hold my RVN, I wanted to mine something that could help me gain more bitcoin. Right now, that’s ethereum classic. I’ll continue to mine it and convert to bitcoin as another way to dollar cost average into bitcoin on a regular basis.
In the next paid email… I’m buying into a small position with Crypto dot com Coin (CRO) for a variety of reasons. I’m going to hold all my ethereum on their exchange for now so I’m utilizing the platform, but I also see an opportunity for a short term trade around CRO. I’ll provide an update once I finish establishing my position.
Where’s My Crypto?
55.8%—Cold Storage
39.5%—Exchange
4.8%—Hot Wallet
My cold storage holdings increased thanks to bitcoin holding up better than most altcoins. I continue to hold the majority of my bitcoin in cold storage.
Upcoming volatility could shakeup these percentages greatly but it’s reassuring to see more than half of my crypto holdings in cold storage. There is a chance I’ll transfer my ravencoin holdings to cold storage too, further increasing what I hold there. If the market continues to draw down, I’ll be undoubtedly holding RVN for a longer period of time and may move it to cold storage for security and peace of mind.
Conclusion
$30k within reach
We’re in for a volatile few weeks ahead. Traditional markets could further precipitate bitcoin’s rocky start to 2022. I’m throwing any January close price targets out.
Zooming out, a $30k test for bitcoin is helpful. Up until this time last year, $30k was an all-time high. Now, it’s a 13-month low. Perspective is important. It might be volatile but it could be necessary for bitcoin to determine a true floor.