Reactionary behaviors typically create a pitfall for intuitive responses. Markets, which are counter-intuitive, consequently take away your money with such an approach. Consequently, we need a plan and follow that plan. We want to share our plan for this year when it comes to Bitcoin (BTC-USD). Our main focus is, of course, risk control. Especially since the recent deep retreat in Bitcoin has once again shaken the confidence of investors and hodlers, while most, if not all, weak and leveraged hands have been destroyed.
As technicians, we like to stack opportunities from a fundamental and technical perspective to skew a profitable outcome in our favor. For 2022, as a medium-term view, we see the next rands as positive support for rising Bitcoin prices.
This is an election year when Democrats will project political pressure on the Federal Reserve not to risk a collapse of the stock market through aggressive policy changes to retain their votes. As a result, more money pressure increases inflation, which supports interest in Bitcoin as an inflation hedge. Should we for any reason see a rapid decline in the stock market in opposition, the investor would be unlikely to be interested in owning stocks or bonds. While Bitcoin prices would initially likely fall along the markets, money would likely flow into Bitcoin shortly thereafter.
With Bitcoin prices depressed due to their recent decline (by 52% lower than its last record high of around US $ 69,000), we still have a head start on reducing exposure risk.
US Dollar BTC, Monthly Chart, High Probability Turns:
The graph above depicts five supply zones on which we have our eye. We will try to identify low-risk access points on smaller time frames at or near these points and further reduce risk with our quad exit strategy.
We already had subscriptions near zones 1 and 2 and posted them live on our free Telegram channel.
BTC in US Dollars, Weekly Chart, Bitcoin, Plan, and Execution, Reload Trading:
Once the more significant turning point in the time frame has been identified (white arrow), we will add what we call ‘recharge’ transactions (see chart above) to the smaller weekly time frame.
We do this by identifying low-risk entries in congestion zones (yellow boxes) on the way up. We aim to come close to the elections in November with a significant position thanks to our risk-free exit strategy. Playing with the market’s money will enable positive execution psychology and make it easier for us to observe our position through an expected volatility period, with further profit-taking in possible volatile upswings that are only temporary in nature.
BTC to US Dollar, Quarterly Chart, Long Term Profit Potential:
While this year’s mid-term trading on the long side of the Bitcoin as well as the Gray Scale Bitcoin Trust (OTC: GBTC) market can provide for significant revenue from the 50% profitability of each individual trade and recharge based on our quad exit strategy, the real goal is to have a residual position size that could possibly reach unpredictable heights, as in the long run we see that the inflation problem does not disappear, but rather results in a Bitcoin increase that in percentage can be significantly much larger than alternatives inflation hedges such as real estate, gold, silver and the like. Not to mention that we also find it essential to keep these asset classes for wealth preservation.
The quarterly graph above illustrates the potential of such a position. We have illustrated our most conservative model in this chart both in time (six years) and price (US $ 134,000).
Bitcoin, the plan and its implementation:
We see no scenario where inflation just goes away. The above narrative shows that a short-term fueling of inflation is likely. Furthermore, a high-risk scenario is fueling inflation even more. Should markets decline rapidly, money pressure and market buying can be expected to be the most dominant solution applied by central bankers.
Consequently, the average investor would be relieved that prices would not fall further. And liquidating their holdings in a further inflated fiat currency will significantly reduce purchasing power. Therefore, we still believe that owning Bitcoin is essential for maintaining wealth. We already had subscriptions near zones 1 and 2 at about US $ 34,000 and about US $ 36,000, which we put directly into our free Telegram channel.