Back in the Money

Bitcoin has broken back above $69k, putting almost all holders back into profit. As the market recovers, we can run a three part check to assess the health of the rally, and the behaviour of investors

G’day Folks,

Bitcoin is rocking and rolling once again, and has now transitioned into a clear weekly uptrend. The Polarity Shift we talked about in late September appears to have done the job, and the market has flipped, and found support on the 200DMA and Short-Term Holder cost basis.

From just about every angle I look at this market, I find it very hard to make a robust bear case, and it looks like the Monthly uptrend is back in charge.

Live Chart

What has occurred over the last 6-7 months has been a great redistribution of coins. Some folks took long-term profits, other capitulated in fear, large pools of supply like Mt Gox and Gv balances changed hands, and plenty of HODLers humbly stacked sats.

When we get strong price move like this, especially at the tail end of a large consolidation, there is a set of three ‘Health Checks’ which I like to perform:

1. How much of the supply has just recovered from ‘in loss’ to ‘in profit’?

2. Have unrealised losses declined such that I can expect ongoing bullish sentiment?

3. Are investors taking advantage of the move and cashing out early, creating resistance?

These checks help me to understand the sentiment of recent dip buyers, and assess how investor profitability has changed since the chopsolidation lows. This is a toolkit I use to distinguish between ‘yet another bounce’, and the return to a serious and sustainable uptrend.

Let’s jump into the data, and run three checks on investor positioning to see if this bounce has what it takes to get the bulls fully bulled up once again.

---

Premium Members will find the TL:DR summary, video update and the rest of the written post below. Consider upgrading to premium today to unlock the rest of the content!

---