Every week we find ourselves in the eternal dilemma of narrating the fall of the empire or the creation of the new economy. Perhaps one cannot be separated from the other.
Last week we discussed the monumental shit of the British empire with its tax cuts and its impact on the Pound (God Save the Bank of England). Today we see that the English government has rectified, giving the feeling that they have no idea what they are doing. They are lost. Rather trapped. Between raising rates to reduce inflation which hurts its huge debt and lowering taxes to revive the economy and fight recession which depreciates the Pound and increases inflation, you’re screwed. It’s one of those decisions where you can only choose what you want to die of.
Usa was born in New England. Old England seems to be struggling. Is America the New Old England and will follow its steps? The only thing it’s saving the USA is that its currency is the international reference.
But let’s take a look into the new crypto economy, the New New England, which is far more optimistic and vigorous.
September use to be a bad month for BTC, but not October:
Are we in front of an Oktoberfest? an Uptober? Let’s see a little bit of technical analysis.
A doji candle is a kind of candle that usually indicates indecision (change). If we take a look into the monthly candle for the past years, almost every time we’ve seen a doji candle we’ve seen something interesting happening (a change of tendency).
There’s another nice sign to look at: LMACD histogram is getting pink:
This signal, for the last two times in the short history of BTC, has been a significant step to put bear markets back, and suggests the beginning of a new cycle. We need to confirm this sign, and that will happen if October closes bullish.
Bitcoin has its cycles. And there’s a lot of approaches to understand how time affects this digital asset. As we saw two weeks ago with the crossing M50w with the M100W (here) the Coppock Curve is a similar way to look into it. The Coppock Curve was created by E.S.C. Coppock, who was centered to identify long-term buying opportunities for investors, as we are at Belobaba. Coppock found that it takes between 11 and 14 months for a bear market to end. There’s a possible psychological explanation for this. Or maybe it’s the time that investors need to recover from a losing position. No one really knows, but:
A flu lasts 7 days or a week, a bear market lasts 12 months or a year (more or less). Sooner or later the bear market will pas.
And we can watch it yet from another perspective, the cost of production. There’s a theory that says that prices for any commodity or raw material can go lower than the production cost. It’s logical. If this happens, productors stop producing, offer falls, and price raises till they find a new equilibrium in the market. As price is always the equilibrium point between supply and demand.
As it happened in 2019, the production cost could be a sign of recovery, we are very close to the production cost for BTC.
Maybe that’s the reason why BTC falls below record levels on exchanges:
We saw 34,723 of BTC move off exchanges on September 30th. Maybe indicating trader confidence heading into Q4.
Interesting signs waiting for confirmation (in volume, for example).
Yours in crypto.