Bitcoin Rallies to the Bear Market Resistance Band

This video provides an update on Bitcoin's position within the current market, focusing on the bare market resistance band and historical patterns. The speaker begins by noting that Bitcoin recently touched the bare market resistance band, specifically reaching within $50-$60 of the 21-week Exponential Moving Average (EMA), which was at $78,415. However, the speaker cautions against interpreting this touch as a definitive rejection. Historical data shows instances where Bitcoin has wick up to this resistance level, pulled back, and then subsequently moved above it before facing further rejection. Examples from 2024 and 2023 are cited, where initial wicks to the resistance band were followed by eventual rallies above it. This suggests that a couple of thousand dollars below the local high doesn't automatically confirm a rejection. The analysis then delves into midterm years, noting that after a low in February followed by another low in April, the market historically tends to remain relatively strong for at least a few weeks post-April low. The speaker references 2014, where the market stayed strong until June after similar low patterns. However, the speaker believes this current rally might not last as long as in 2014. The reasoning is that in 2014, the April low was a lower low, whereas in the current situation, the April low was a higher low, similar to 2018. In 2018, after a higher low, Bitcoin's strength only lasted until the end of April before facing rejection, which became apparent in May. A key upcoming event mentioned is the Federal Reserve meeting on April 29th, which might coincide with a Bank of Japan meeting where a rate hike is possible. This could serve as a narrative for the market to rally into or remain strong until. However, even if Bitcoin surpasses the bull market band, the speaker identifies the 200-day moving average as the next significant resistance level. Historically, in bare markets, Bitcoin has found resistance at its 200-day moving average, citing examples from April 2022, May 2018, and June 2014. The speaker suggests that even if Bitcoin breaks above the bare market resistance band, a sustained rally to all-time highs is unlikely in this midterm year. Instead, a potential scenario involves Bitcoin consolidating between the bare market resistance band and the 200-day moving average until later in the year, when it is forced to make a decisive break. This is described as a long process. The speaker also considers a comparison to the 2019 bare market, where overlaying that period with the current chart might suggest a slightly longer rally, potentially extending into early June. However, the speaker doubts this narrative, believing the current digestion phase is too short to mirror the length of the 2019 bull market. Furthermore, looking at year-to-date returns in midterm years, Bitcoin's performance is currently at the higher end of the average, with one standard deviation showing periods of elevated levels followed by drops, as seen in 2022. The speaker emphasizes that this analysis is intended as a short-term roadmap, particularly for identifying windows of weakness. In midterm years, February, April, and June are typically identified as periods of weakness, although 2014 is noted as an exception where a top occurred in June after a lower April low. The current situation, with a higher low similar to 2018, suggests a potential top in late April or early May. Ultimately, the speaker maintains a bearish outlook, leaning towards Bitcoin going lower as the year progresses, even if short-term strength persists. This perspective acknowledges that many disagree, which is seen as a healthy aspect of the market. The video also touches upon alternative investment opportunities. The speaker highlights that sectors like energy, manufacturing, and metals have significantly outperformed Bitcoin this year. For those who recognized Bitcoin's tendency to underperform these sectors in midterm years, holding these alternative assets would have resulted in substantial gains, making current crypto rallies less impactful. The core message is that even within a crypto bare market, profitable opportunities exist elsewhere, reinforcing the idea that "there's always a bull market somewhere." The speaker concludes by stating that there isn't enough evidence yet to suggest a crypto bull market, unlike for other asset classes.