"Everyone Is Wrong About This Bitcoin Cycle," states Lyn Alden.
Summary
TLDRThe speaker expresses a positive two-year outlook for Bitcoin, despite acknowledging its potential for significant volatility and periods of underperformance. They note that while Bitcoin's price has recently declined from its all-time high, historical patterns suggest it could rebound strongly. The analysis highlights the influence of macroeconomic events, regulatory actions, and Federal Reserve policy on Bitcoin's trajectory. The speaker also draws parallels between Bitcoin and gold, suggesting that both are influenced by liquidity and fiscal factors, with the latter being particularly significant for Bitcoin. They mention the role of ETFs in unlocking access to Bitcoin for large pools of capital, which could drive demand and price. Finally, the speaker emphasizes the importance of being prepared for Bitcoin's volatile path to growth, while remaining optimistic about its long-term performance.
Takeaways
- 📈 The speaker has a two-year positive outlook on Bitcoin, expecting it to perform well over the next two years despite potential short-term volatility.
- 💹 Bitcoin's price has seen a 10% drop from its all-time high of $3,835 on March 14, experiencing a 7% plunge at the start of April due to overbought conditions.
- 🔄 The current market trends suggest that Bitcoin is following the pattern of previous halving cycles, with the price trajectory aligning with the five phases of Bitcoin halving.
- 📉 Notably, there has been significant movement in the Bitcoin Futures Market, with liquidations exceeding $121 million within a 4-hour period on April 2, indicating elevated volatility.
- 📊 Trading volumes for Bitcoin have dropped significantly, falling over $13 billion from the year-to-date peak, with spot selling and long-term holders taking profits contributing to the pressure on Bitcoin's price.
- 🌐 Macroeconomic events and regulatory actions, including Federal Reserve monetary policy, continue to influence Bitcoin's price trajectory.
- 💰 The speaker notes improving liquidity, largely fiscal driven, as a significant factor in Bitcoin's price movement, with ETFs and other capital pools unlocking access for large amounts of money to the cryptocurrency.
- 🔗 The impact of the halving on Bitcoin's price is relatively small compared to the overall changes in external demand, but it plays a pivotal role in setting higher highs and lows with each cycle.
- 📈 The speaker draws a comparison between Bitcoin and gold, noting that both have seen demand due to fiscal issues and central banks diversifying their reserve holdings.
- 🚀 Despite the volatility and uneven path, the speaker anticipates a recovery in Bitcoin's price, especially as more financial institutions embrace it.
- 📊 The speaker concludes that while the halving is a relevant long-term factor, liquidity plays a more significant role in Bitcoin's price during bull markets.
Q & A
What is the speaker's general view on Bitcoin's performance over the next two years?
-The speaker believes that Bitcoin is likely to do well over the next two years, despite potential periods of being overbought and underperforming compared to other assets.
How did Bitcoin's price perform after reaching an all-time high on March 14?
-After reaching an all-time high of $3,835 on March 14, Bitcoin's price declined by 10% by April 2.
What is the significance of the 7% plunge in Bitcoin's price at the start of April?
-The 7% plunge signifies a contraction in the market and is part of a pre-hailing retracement, which some analysts compare to patterns observed in previous hailing cycles.
What event in the Bitcoin Futures Market is mentioned in the transcript related to liquidations?
-Liquidations in the Bitcoin Futures Market spiked, exceeding $121 million within a 4-hour period on April 2, coinciding with elevated volatility.
How has Bitcoin's trading volume changed from its peak in March?
-Bitcoin's trading volume has seen a significant drop, plummeting over $13 billion from the year-to-date peak of $4 to $5 billion in daily activity recorded on March 5.
What impact is spot selling having on Bitcoin's price?
-Spot selling continues to exert pressure on Bitcoin's price, contributing to its fluctuations and potential declines.
What trend is observed among long-term holders and recent buyers of Bitcoin?
-Long-term holders are reducing risk and taking profits, while recent buyers appear to be short-term holders, as indicated by the highest BTC supply held by short-term holders since July 26, 2021.
How do macroeconomic events and regulatory actions influence Bitcoin's price?
-Bitcoin's price remains subject to macroeconomic events and regulatory actions, with Federal Reserve monetary policy being a significant influencer on its trajectory.
What is the speaker's view on the role of ETFs in Bitcoin's price movement?
-The speaker believes that ETFs play a significant role in Bitcoin's price movement by unlocking pools of capital that have not been able to access Bitcoin, thus increasing demand for exposure to the network.
How does the speaker compare the impact of liquidity and the having on Bitcoin's price during a bull market?
-The speaker suggests that overall liquidity has a much bigger impact on Bitcoin's price during a bull market than the having itself, as external demand for Bitcoin plays a more significant role.
What does the speaker suggest about the role of the having during bear markets?
-During bear markets, the having plays a pivotal role in why each cycle achieves higher highs and higher lows than the one before it.
Outlines
📈 Bitcoin's Two-Year Market Outlook
The speaker expresses a preference for a two-year view on Bitcoin, predicting its overall positive performance despite potential short-term overbought periods and underperformance. They acknowledge the waning bullish momentum that previously drove Bitcoin to an all-time high, but also note the historical patterns of Bitcoin's halving cycles. The speaker draws parallels with gold's value, suggesting that macroeconomic factors and Federal Reserve monetary policy will continue to influence Bitcoin's trajectory. They also mention the growing interest from financial institutions and the unlocking of new capital pools through ETFs as factors that could drive Bitcoin's demand and price up in the long term.
💡 Bitcoin's Volatility and Long-Term Growth
The speaker discusses the volatility of Bitcoin, emphasizing the importance of preparing for its uneven path to growth. They predict that by late 2025, Bitcoin will likely be higher than its current value and outperform other large-cap assets. The speaker also explores the relationship between interest rates, deficits, and gold, suggesting that fiscal issues and central banks' decisions to diversify their reserves contribute to the demand for both gold and Bitcoin. They conclude that while the halving plays a significant role in long-term cycles, liquidity and external demand have a more substantial impact on Bitcoin's price during bull markets.
Mindmap
Keywords
💡Bitcoin
💡Two-year view
💡Overbought
💡Bitcoin Futures Market
💡Liquidations
💡Trading Volumes
💡Long-term holders
💡Macroeconomic events
💡ETFs
💡Liquidity
💡Halving
Highlights
Bitcoin's potential performance over the next two years is discussed, with a focus on its long-term outlook despite short-term volatility.
The transcript mentions that Bitcoin may experience overbought periods and underperform temporarily but is expected to recover.
The all-time high of Bitcoin at $3,835 on March 14 is noted, with a subsequent 10% drop by April 2.
A comparison is made between Bitcoin's price trajectory and the five phases of the Bitcoin halving, with a pre-halving retracement being observed.
The Bitcoin Futures Market is highlighted, with significant movements and liquidations reaching $121 million on April 2.
Bitcoin's trading volumes have seen a major drop of over $13 billion from their peak.
Spot selling and long-term holders reducing risk and taking profits are identified as factors influencing Bitcoin's price.
The impact of macroeconomic events and regulatory actions on Bitcoin's price trajectory is discussed.
Improving liquidity, particularly fiscal-driven, is seen as a positive factor for Bitcoin.
The role of ETFs in unlocking access to Bitcoin for large pools of capital is highlighted as a significant factor in price increases.
The comparison between Bitcoin and gold is made, with both being influenced by liquidity and fiscal factors.
Gold's recent breakout and its potential for higher values in the next few years are discussed based on fundamentals.
The importance of liquidity over the halving event in influencing Bitcoin's price during bull markets is emphasized.
The halving is noted to play a pivotal role in bear markets, contributing to higher highs and lows in each cycle.
The transcript suggests that Bitcoin's price could be higher by late 2025, outperforming other large-cap assets.
The transcript discusses the potential for temporary liquidity shocks due to large deficits and their impact on asset prices.
The transcript concludes with an overall positive outlook on Bitcoin and gold, driven by improving liquidity and fiscal factors.
Transcripts
so for this year I'm less I'm less
certain I prefer a two-year view on
bitcoin so I think that bitcoin's likely
going to do well over the next call it
two years um it get it can get through
periods where it's overbought right
where where you could you could have a
pretty poor 3mon period with Bitcoin and
it could underperform almost everything
the bullish momentum that drove Bitcoin
to an all-time high of Dollar
3,835 on March 14 has waned with
bitcoin's price now down 10% from that
Peak on April 2 this contraction has
resulted in over a 7% Plunge at the
start of April some analysts posit that
Bitcoin is entering the preh having
phase historically following a certain
pattern akin to previous having Cycles
BTC price trajectory seems to align with
the five phases of the Bitcoin having
with the draw down preceding the having
expected on April 20 by 18 days a social
media post from crypto Trader and
independent analyst Rec Capital suggests
that the ongoing price action is part of
a preh having retracement reminiscent of
38% and 20% dips observed during the
2016 and 2020 having Cycles notably
there's been significant movement in the
Bitcoin Futures Market marked by
liquidations long liquidations spiked
within a 4-Hour period on April 2
exceeding $121 million coinciding with
elevated volatility bitcoin's trading
volumes have also seen a significant
drop plummeting over $13 billion from
the year-to-date peak of do4 to5 billion
in Daily activity recorded on March 5
spot selling continues to exert pressure
on bitcoin's price furthermore long-term
holders are reducing risk and taking
profits while recent buyers appear to be
short-term holders as indicated by the
highest BTC Supply held by short-term
holders since July 26 2021 this trend
could potentially contribute to further
declines in Bitcoin prices despite these
fluctu ations bitcoin's price remains
subject to macroeconomic events and
Regulatory actions as well as Federal
Reserve monetary policy are likely to
continue influencing its trajectory
nevertheless Market participants
anticipate a recovery in bitcoin's price
particularly as more financial
institutions Embrace BTC I generally
think so I think we've generally seen
improving liquidity a lot of it's fiscal
driven um and and so I do think that
they you know they've resisted the fact
that yields are higher right so normally
when you see yields and especially real
yields this High you should see gold a
lot lower than it is um and so I think
that gold investors have been sniffing
out some of those fiscal problems that
I've been talking about uh and in
addition because of you know kind of uh
Decisions by central banks to diversify
their Reserve Holdings and have more
gold in their portfolios that's been
another huge Factor as well so
especially from that foreign component
um there's been a lot of demand and so
you know bitcoin's obvious had somewhat
similar Catalyst it's heavily tied to
liquidity it's had Catalyst from the
ETFs and things like that as well so the
two the reasons that both of them are
rising I don't think are perfectly um
overlapping but I do think that they are
following liquidity and which is large a
fiscal driven phenomenon I think the ETF
unlocks there's there's pools of capital
that are very big that have not been
able to access Bitcoin um and and so
those pools of capital can increasingly
access Bitcoin and so that's kind of pen
up demand for exposure to the network uh
that they now have exposure to or at
least and they don't even all have it
yet sometimes it takes months for those
things to still get approval to start
moving in and start to become normalized
in those environments so I think I think
that is a a a contributor to price um
the having uh certainly in a sentiment
sense can raise expectations um I think
that overall liquidity is a much bigger
impact on bitcoin price during bull
market than the having itself um because
you know if you if you do the math for
how much Supply the having takes off the
market per day it's relatively small
compared to what you can get from ETF
inflows or relatively small compared to
what you can get in one way kind of net
exchange volume in a given day um and so
the overall changes in external demand
for Bitcoin play a bigger role than just
the
the one before it but in terms of the
timing of bull market specifically I
generally Point more toward liquidity
and less so toward the having even
though the having is a very relevant
kind of longer term Factor so for this
year I'm less I'm less certain I prefer
a two-year view on bitcoin so I think
that bitcoin's likely going to do well
over the next call it two years um it
get it can get through periods where
it's overbought right where where you
could you could have a pretty poor
three-month period with Bitcoin and it
could underperform almost everything um
and then it could have another 3 to six
months of just of spectacular gains um
and so um my view is generally looking
back from late 2025 I'd be surprised if
Bitcoin was not higher than it is now
notably uh and and that probably
outperformed other kind of large large
cap things you can own um but you have
to account for the volatility and you
have to kind of be prepared for that
really uneven path to get there so I I
think that because we're now in this
kind of f dominance regime higher
interest rates fuel the deficit even
more um- which which potentially fuels
gold um I think you know you could get
liquidity like temporary liquidity
shocks if for example um you run these
big deficits the FED tries not to
monetize them uh and you get kind of um
like a temporary liquidity problem in
Treasure markets that could certainly
contribute to a gold selloff uh
temporarily um but I do think that the
the breakout has likes to it um I think
that the breakout is is real I think
that it's it's based on fundamentals I
think that there's a a good reason that
a lot of foreign investors want to own
gold more so than treasuries um and that
they want to basically have a better
ratio of gold to treasuries um and I
think that that's that's probably going
to be a longer term story uh and I have
no view on what gold does and say a
three-month period um but I do think it
it's it's now that it's broken out I
think that's a very strong sign that I
think it's probably headed higher in the
next few years I generally think so I
think we've generally seen improving
liquidity a lot of it's fiscal driven um
and and so I do think that they you know
they've resisted the fact that yields
are higher right so normally when you
see yields and especially real yields
this High you should see gold a lot
lower than it is um and so I think that
gold investors have been sniffing out
some of those fiscal problems that I've
been talking about uh and in addition
because of you know kind of uh Decisions
by central banks to diversify their
Reserve Holdings and have more gold in
their portfolios that's been another
huge Factor as well so especially from
that foreign component um there's been a
lot of demand and so you know bitcoin's
obviously had somewhat similar Catalyst
it's heavily tied to liquidity it's had
Catalyst from the ETFs and things like
that as well so the two the reasons that
both of them are rising I don't think
are perfectly um overlapping but I do
think that they are following liquidity
and which is large a fiscal driven
phenomenon I think the ETF unlocks there
there's pools of capital that are very
big that have not been able to access
Bitcoin um and and so those pools of
capital can increasingly access Bitcoin
and so that's kind of pen up demand for
exposure to the network uh that they now
have exposure to or at least and they
don't even all have it yet sometimes it
takes months for those things to still
get approval to start moving in and
start to become normalized in those
environments so I think I think that is
a a a contributor to price um the having
uh certainly in a sentiment sense can
raise expect ations um I think that
overall liquidity is a much bigger
impact on bitcoin price during bull
market than the having itself um because
you know if you if you do the math for
how much Supply the having takes off the
market per day it's relatively small
compared to what you can get from ETF
inflows or relatively small compared to
what you can get in one way kind of net
exchange volume in a given day um and so
the overall changes in external demand
for Bitcoin play a bigger role than just
the having during bull markets I think
where the HS really matter the most is
during bare markets they play a pivotal
role in why each cycle gets higher highs
and higher lows than the one before it
but in terms of the timing of bull
market specifically I generally Point
more toward liquidity and less so toward
the having even though the having is a
very relevant kind of longer term Factor
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