After a very volatile week, Bitcoin closed its weekly candle back below our major pivot level of $69k. Now that markets are focused on geopolitical tensions, Bitcoin’s relief has been been put on pause for the time being. Bitcoin has held up surprisingly well given the current market environment, but no one knows for certain how long this will take to resolve. It may take a few days or it may take a few months. Therefore, I am focusing on the inevitable rally that will ensue once this uncertainty subsides and not the short-term volatility.

Market sentiment remains extremely fearful. Investors are very concerned about the rising geopolitical tensions and what they will do to inflation, markets and the economy. Time periods of extreme fear usually result in investors making decisions they would not have otherwise made during calmer time periods. This is why there is always opportunity during sentiment extremes.

The GLI continues to decline thanks to the recent strength in the US Dollar. Rising energy prices results in higher inflation expectations which results in lower FED rate cut expectations which results in a stronger UD Dollar. This decline in The GLI will likely start to impact Bitcoin negatively starting in May. Bitcoin has struggled to follow The GLI recently because markets are prioritizing the geopolitical tensions over liquidity conditions, but Bitcoin will likely go back to following The GLI once these tensions subside.

We will be receiving updated inflation data on Wednesday, March 11th. The market is very concerned about rising energy prices and the impact they will have on inflation so investors will be watching this print closely. A hotter than expected print would likely incite even higher inflation fears and lower FED rate cut expectations while a lower than expected print may calm investors’ nerves slightly. The inflation print will be incredibly important in determining the FED’s monetary policy path going forward.

Bitcoin’s resilience during the recent geopolitical escalation has been quite impressive. It’s clear that Bitcoin sellers have already sold the Bitcoin they are interested in selling for the time being. The base case is still a shallow bear market and strong relief rally once the geopolitical situation subsides. I’m mentally and financially prepared for a normal bear market where Bitcoin goes lower than I expect, but that outcome seems less likely than the shallow bear scenario as of right now.

I bought more Bitcoin this morning. It was pretty difficult to do given all the geopolitical uncertainty, but I know those emotions create opportunities because other investors are experiencing similar emotions. My best purchases have always felt the worst and I can’t ignore the fact that Bitcoin is in the “Cheap” region while the market is extremely fearful. I have now reached my desired allocations for this region and will save the remaining dry powder for the “Very Cheap” region incase we are granted that opportunity. All that’s left to do now is patiently wait for this situation to resolve and focus on the long-term thesis.

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. If you’d like to view my entire portfolio and would like to learn more about my Portfolio Automation System, checkout the Crypto Enjoyers program and community. You can learn more about it here:

I hope you have an amazing week and the future looks bright. 🤝