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Crypto market sentiment and my take.
Target Price Range: $42,000-47,000
Bitcoin continues to consolidate below $50,000. After El Salvador launched Bitcoin as legal tender last week, the world’s largest cryptocurrency has been in correction mode.
BTC is up ~10% from the July close
Since Sept. 7, Bitcoin has fallen from highs near $53,000 back into the mid $40,000s. I’ve been watching that $50,000 price level for weeks now.
We needed a strong push above $53,000 to open up a shot at the all time high and we didn’t get it. Despite the recent correct, September still looks bullish and Bitcoin remains up roughly 10% from its July close.
Correction aside, it’s been a good month.
Bitcoin whales are buying.
Michael Saylor continues to lead the charge from an institutional standpoint, adding another $242.9 million worth of BTC during this week’s correction.
Saylor isn’t alone.
In total, whales bought roughly 44,000 BTC or $2 billion worth of BTC in September and that trend should continue if we remain at current levels.
whales are buying
newer coins are maturing
fewer BTC is moving
93% of all BTC hasn’t moved in a month
On top of that, newer coins are maturing. We’re seeing new retail buyers start to hold for longer periods of time. Whales have been doing this for years, but we’re also seeing newer Bitcoin entrants buy and hold rather than trade.
Price ranges to watch:
Wider range remains:
$30,000 and $67,000 are the bookends I’m watching. We touched the low end of $30k in July and $67k is all time high territory.
A September close above $53,000 signals a possible shot at the ATH and opens up what could be a very volatile run-up between now and December.
What to Watch
What’s happening in Bitcoin.
Bitcoin is now legal tender in El Salvador. Not only that, the country became the first (publicly) to add BTC to their reserves. But wait… there’s more.
El Salvador continues to double down on Bitcoin adoption and will reportedly make investors exempt from paying capital gains and income tax on BTC.
The Ukrainian Parliament is following suit, passing a law to legalize Bitcoin by near unanimous consensus. The law provides clarity around Bitcoin and cryptocurrency where there previously was none and opens up an avenue to make Bitcoin legal tender by the start of 2023.
Global adoption is happening
For all of the bullish news around adoption, there’s plenty to be ironed out when it comes to how cryptocurrencies are used.
In the United States, the Securities and Exchange Commission (SEC) is questioning Coinbase’s lending products. U.S. regulators and lawmakers continue to hold popular crypto platforms and exchanges like Coinbase and BlockFi in regulatory-limbo.
Coinbase CEO Brian Armstrong went on the offensive, calling out the SEC for its hypocrisy in coming after them and not others, a lack of guidance around what’s defined as a security, and he reaffirmed that Coinbase has gone out of its way to be one of the “good actors in the space.”
$42,000-47,000 is a key price range but there’s no real reason to be bearish on Bitcoin at the moment. Whales and bulls are buying and traditional financial markets are looking to rebound from last week. Bitcoin could see some spillover from overall positive sentiment across markets.
“Sell the news” is overrated. Talking heads wanted to credit the crypto correction to selling on El Salvador’s Bitcoin Day, similar to when Coinbase went public and we saw the drawdown from all time highs. While there was some retail selling, all signs point to greater accumulation from both whales and younger buyers.
What I want to see:
Sept. close above $53,000
Recent Monthly Closes:
The second half of September will signal which direction the market is heading. Taking down the $50,000 psychological level with conviction is necessary in order to open up a shot at a new all time high.
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