The Weekly Close

After a relatively quiet week, Bitcoin closed its weekly candle just above $85k. We are slowly approaching our $91k resistance level that combines both our previous range low and the 20-week moving average and it will likely give Bitcoin some trouble on the first attempt. It’s nice to see some consecutive green candles on the weekly chart with all of the macro uncertainty we have been witnessing, but until major levels get reclaimed, it’s likely we see more chop and consolidation for Bitcoin.

Temperature Check

Bitcoin continues to climb the wall of worry as the majority of investors are still quite fearful and are expecting much lower prices over the next few months. It’s important to remember that sentiment can change very quickly and after so much time spent in the fear region, I wouldn’t be surprised if we saw many investors chase price higher once some major levels get reclaimed. For now we just need to keep our emotions in order as we wait for Bitcoin to make its next move.

Global Liquidity

Global Liquidity continues its breakout higher thanks to the recent weakness we have seen in the US dollar. This should be a strong tailwind for Bitcoin once the macro uncertainty clears up a little. Right now investors are completely focused on the latest headlines and narratives, but I believe Global Liquidity is what drives the macro trend. I’m not sure how long it will take before Bitcoin follows, but this chart keeps me quite optimistic on Bitcoin’s future over the next few months.

Macro

We finally have a confirmed breakdown in the US dollar index. Bounces on the way down are normal, but we have officially broken into our risk-on region where Bitcoin has historically done very well. The US dollar is the reserve currency of the world, so a weaker dollar allows central banks globally to ease and stimulate their economies, this should result in a large Global Liquidity surge and send risk assets higher.

Bigger Picture

My base case remains that it’s unlikely we see Bitcoin trade in the low $60ks on this correction. We have already completely reset sentiment and have seen a standard Bitcoin bull market correction of just over 30%. I am incredibly impressed with how Bitcoin has held up throughout this macro fiasco and I think it further solidifies my thesis that the cycle isn’t over and showcases the demand for Bitcoin in this environment.

What I’m doing with my portfolio

No changes were made to my portfolio this week. My cash position is not far enough from my 30% target for me to justify making any changes. Our difficult dip buy 2 weeks ago turned out to be quite a solid entry. It was very difficult to buy with all the fear and uncertainty at the time, but all I had to do was ignore my emotions and follow my system knowing that it already took my risk tolerance and time horizon into account. I look forward to taking profits at higher prices once again in the near future.

P.S. If you made it to the end of this report thank you for reading and I hope you got some value from it. I finally completed the final module of the Portfolio Management System course and I’m grateful for all the awesome feedback. I promised I would provide a heads up before ending the lifetime access with early bird pricing offer so I will leave it open for one more week. You can learn more about it here:

After weeks of remaining calm during the fear and uncertainty it’s now once again time to remain calm as FOMO starts to kick in. The combination of rising Global Liquidity and fearful sentiment keeps me quite optimistic on Bitcoin’s price action over the next few months. All we have to do it stick to our plan and remain calm and collected throughout. Hope you have an amazing week. The future looks bright. 🤝