After a move higher early in the week, Bitcoin closed its weekly candle just under $84.5k. This means we opened and closed above the 50W MA which further confirms this move to the upside. Every close above the 50W MA is further confirmation that the bottom is in and that we are entering a bull market. I expect volatility because Bitcoin never gives bulls an easy ride, but the price action we are seeing right now is exactly what you’d expect in the early stages of a bull market.

Market sentiment remains in Greed. Sentiment has been cooling off after every rally as investors start to get nervous that the move is a trap, but that’s exactly what sentiment resets are supposed to do. Bitcoin uptrends are filled with violent pullbacks and boring chop that shakes investors out of their positions. I already see many investors clinging onto bearish narratives and assuming they will be able to buy at much lower prices. Maybe they end up being right, but hope is not a strategy. The market still feels under-positioned for a move higher and I doubt Bitcoin will give them the entry prices they want.

The GLI has begun to trend down slightly so that could align with a Bitcoin pullback in late Q4. As for right now, that pullback will be around late November so we want to see The GLI bottom and head higher again before we reach that timeframe. The GLI is going down due to recent strength in the US Dollar. The US Dollar and bond yields will be important to monitor for the remainder of the year, but I will use Bitcoin’s price action to manage risk, not predictions regarding what bond yields will do.

We will be receiving an update to the FED’s preferred measure of inflation, Core PCE, on Wednesday, September 30th. This is an especially important print because inflation is the main reason why the market is pricing in rate hikes later this year. The current expectation is a drop from 3.3% YoY to 3.2% YoY. We want the print to come in-line with those expectations or lower to show the market that inflation is heading in the right direction and put less pressure on the FED to hike aggressively.

Bitcoin is still comfortably in the Cheap 🟢 region according to how extended it is from its 200W MA. Our buys in the Very Cheap 🔵 region continue to look quite promising given this recent price action. Buying after a reclaim of the 50W MA is significantly lower risk than buying at the 200W MA because you are buying after strength has been proven, but many investors get attached to the lower prices they didn’t take advantage of. That mindset makes these market regime transitions very hard for those investors to navigate. That’s why being prepared for multiple outcomes is so important.

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