Bitcoin’s Turning Point is Here?

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Welcome back to our detailed dive into Bitcoin’s recent turmoil and opportunities! Recent events have stirred the crypto pot significantly. Here’s your cheat sheet on what went down and where things might be heading in the dynamic world of Bitcoin.

Key Points

Below we have summarised the most important updates and an outlook for the market.

πŸ”₯ Geopolitical Tensions

  • Geopolitical tensions between Iran and Israel led to a massive Flash Crash in Bitcoin, wiping out over 30% of all open interest positions.
  • Despite devastating immediate impacts, the market quickly recovered as both sides showed restraint, suggesting potential stability ahead.
  • The markets often react to such warlike escalations with an initial crash and a rise in the price of oil, but typically recover quickly. It is a pattern that is often repeated in times of crisis: Initial shock, followed by a steady return to normality.

🌐 Bitcoin Halving

  • The recent Bitcoin halving event has reduced miner rewards, effectively decreasing Bitcoin’s inflation rate below that of gold.
  • This halving is the first in which the price has already reached new all-time highs. However, historical data shows that halvings are often considered a “sell-the-news event” in the short term: On average, the Bitcoin price increased by 19% in the month before the Halving, compared to only 1.7% in the following month.
  • In the long term, however, the picture looks different: In each of the three cases so far, returns were higher after the halving than before. πŸ‘†πŸ» (Whether this is solely due to the halving or to global liquidity and economic cycles is another question. πŸ˜‰)

🏦 ETF Dynamics Changing

  • The enthusiasm for Bitcoin ETFs appears to be waning a bit, possibly due to a saturation of initial capital flows into the market.
  • New filings suggest potential improvements in ETF structures which could renew interest and stability in inflows.
  • Nevertheless, we see that the first wave of capital came in and this now seems to be slowing down and we are entering the long-term effect of ETFs where investments happen passively.

πŸ“‰ Traditional Financial Markets and Crypto Correlation

  • The correction seen in S&P 500 mirrored in crypto spaces, showing high correlation between traditional financial markets and cryptocurrency behavior, particularly evident during major geopolitical or economic events.
  • Tech stocks such as Nvidia facing declines have also paralleled downturns in the crypto market, emphasizing the intertwined nature of high-risk assets across platforms.

My take

I stand by my opinion that we now have two options. We have already seen the break into the blue zone that I expected, but now we have two options: We finally move up or see a flash crash into the green zone, where I will continue to buy. Since I have already filled my pockets, I will not buy until we reach prices in the the green box.

All in all, I continue to share a bullish opinion mid and longterm. You can find the new dashboard where I share my opinion where we are in the market: IX Cycle Indicator.

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