The Second Line
Bitcoin is looking set to challenge the bears second line of defence in the mid $80ks. We’re seeing positive signs of investor momentum inflecting higher, alongside profit taking by bottom buyers.
G’day Folks,
The truth is, nobody knows when THE ultimate bottom of a bear market is in, until many months down the road.
Investors and analysts are always looking over their shoulder, worried with PTSD that this rally is destined to fail, just like all the others which came before it.
Except at some stage, the rally will eventually stick the landing.
I have received a lot of messages in the last few weeks from folks who wish they had accumulated more aggressively below $70k, and are now wondering what to do. The higher we go, the more the pain of missing out can build.
Simultaneously, the higher we go, the more likely we are to hit a major resistance level, which motivates sellers to put in another high. This fires up the bears, and spooks the bulls who fear they have just bought another local top.
Given we cannot predict the future, my approach is to work backwards, and identify market thresholds where momentum and sentiment are likely to inflect higher.
Each of these thresholds we break and hold, adds more and more weight to the bull case, and puts the bears on the back-foot.
We’ve already taken the first line of defence at $78k, and Bitcoin is currently knocking on the door of the second, and most critical line in the sand for the bear case.
Today’s post will be my assessment of why this second line of defence is so important for the bears, and how likely it is that we take it.
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