In a recent compelling video, Carl Runefelt and his colleague Dano delved into the imminent Bitcoin supply shock and its implications. The CoinSpeech team closely analyzed and collected the most critical insights from Carl’s discussion. For those eager to catch up, Carl Runefelt’s new video can be found below.
The Bear Trap Scenario
Dan described the current Bitcoin market as potentially being in a bear trap. By examining the SMI (Strength Movement Index), which combines various moving averages similar to the RSI (Relative Strength Index) indicator, he pointed out a bullish divergence. “If this does indeed play out in this bear trap, it could be a reverse Bart Simpson head because Bitcoin does this often,” Dano explained. This pattern, if realized, could propel Bitcoin prices upward to $70,600 and beyond, with successive targets at $71,900 and $73,800.
Inverse Head and Shoulders: The Bearish Edge
While optimistic, Dan didn’t shy away from presenting a bearish perspective, noting a potential Head and Shoulders pattern. “If we clear a shoulder, we could go down to $68,800 again to test up that low liquidity,” he mentioned. This scenario could see Bitcoin falling further to $67,706, providing opportunistic investors with an entry point to scoop up altcoins.
Retesting Key Levels
Carl and Dan emphasized the importance of clearing key resistance levels. “Put one in the chat if you think we are going to break through that 70s,” Carl urged his audience. Significant levels to watch include $70,600, $71,900, and the ultimate resistance of $73,800. Their repeated testing of these resistance points signals potential bullish momentum that could finally push Bitcoin beyond its consolidation phase.
Bitcoin’s Persistent Consolidation
Bitcoin has been consolidating at the $70,000 range for 84 days, the second longest since its bottom at $15,000. “The amount of time spent at this price range suggests a substantial move incoming,” Carl stated. Historically, lengthier consolidation periods lead to stronger subsequent price movements.
Supply Shock and Reduced Exchange Balances
One pivotal factor indicating an upward trend is the decreasing balance of Bitcoin on exchanges. Carl underscored this by showing on-chain data: “Balances on exchanges are at an all-time low. When people move their crypto away from exchanges, it’s a good sign because it means they do not want to sell.”
ETFs and Institutional Adoption
“Last week, the ETFs bought 25,700 Bitcoin while only 2,250 Bitcoin were mined,” Dan highlighted, pointing to a growing demand that far outstrips supply. He also shared a revealing chart: “34-spot Bitcoin ETFs now hold over 1 million Bitcoin. This started January 11, so this is new!”
Long-Term Prospects
Reflecting on Bitcoin’s growth, Carl reminisced about 2011 when Bitcoin’s crash from $30 was deemed catastrophic. Today, those buyers are up by 200,000%. “Bitcoin can fulfill the prophecy of going up and breaking its new all-time highs,” Carl declared, noting the significant bullish sentiment surrounding Bitcoin.
Gucci Bags, Real Estate, and Retrospective Wisdom
Drawing an analogy, Dan amusingly compared Bitcoin to an authentic Gucci bag amid a sea of counterfeits, emphasizing its unparalleled value. The pair also discussed the pros and cons of traditional investments like real estate versus Bitcoin, highlighting Bitcoin’s growing appeal among retail and institutional investors alike.
As Carl succinctly put it, “When Bitcoin breaks the $70,000 resistance convincingly, it’s go time.” Investors are advised to stay vigilant, as the consolidation phase could rapidly transition into a catalytic breakout, marking new highs.