BTC Cooling Down Before Going Off

Crypto Compass 29

“The greatest glory in living lies not in never falling, but in rising every time we fall.” -Nelson Mandela

• Why: Last week said that if the risk signal peaked, we would buy the bottom because it’s reinforcement that selling pressure is subsiding. A decreasing risk signal suggests that selling pressure is easing, and panic selling is less likely.

• Conclusion: Buy if the risk signal continues to decrease. It’s best to Dollar Cost Average (DCA) in this environment, buy at the key support levels mentioned below.

Figure 1: Bitcoin Risk Signal is a proprietary signal that gauges the amount of risk of a major drawdown in bitcoin price.

• Since 2019, there has been a recurring pattern of capital rotating from the Nasdaq to BTC, and vice versa. The Nasdaq tends to outperform first, recover - that is reach the previous top - while BTC consolidates. We’re on the brink of capital rotating (outperformance) from the Nasdaq to BTC.

• The Nasdaq might be due for a slight consolidation/cool-off, which encourages investors to seek higher yields elsewhere, potentially BTC. It has taken BTC around 50 days to begin outperforming the Nasdaq. We believe that it will be sooner, an explosive move is brewing.

Figure 2: The chart includes BTC and NASDAQ price evolution.