Final newsletter for 2022 is here. Time flies, when I started in Feb and made predictions on when we could see bottom for Bitcoin and what price levels, it felt like a very very long time to wait till Winter. Here we are 10 months later and I hope some of you found my writings useful, saved you from buying Bitcoin at 30k+ and investing into very risky alts that were always destined to go 90%+ from their ATHs of 2021.
If I had to pick my top call for 2022 was the long term projection from March, based on S2F ratio, while we’ve already seen Bitcoin below 16.7k only time will tell if my estimations for 150-200k range in 2025 come to fruition. I will be making updates post 2024 halving as then the price top estimation should have a smaller margin of error. Click button below to read if you are not familiar with it.
Of course being patient, not buying anything, isn’t easy. Everyone constantly bombarded with perma bulls screaming that bottom is already in at every single level from 47k in March all the way down to now. Every month there is a different reason, from FED pivot to most popular in December Santa rally.
They don’t know Santa isn’t real and if it was, it’s friends with bears this year. Risk markets are so desperate, that even recession data points from US are taken as bullish. I think many forget that while recession would cause FED to pivot (pivot means cut rates, not hike by 50pts like many tried push as narrative in Dec) it would also tank the risk on markets much lower than we’ve seen so far. Be careful what you wish for.
BITCOIN
Looking at BTC’s chart, there isn’t much left to analyse on a medium term basis. It is still looking likely to register lower lows in the next 4-6 weeks, especially if one considers where stock market is heading (will show what I mean later for those that don’t follow me on Twitter @gigisulivan), most probable bottom around 11k.
I am showing above this and 2018 bear cycle, but 2015 too, registered same size of last leg down as it’s last mini rally. There are few other charts that support the case of price potentially going closer to 9k in case of a hard downfall on S&P500, but other than that, I don’t really see us tanking all the way down to 10k. Simply too many crypto influencers are calling for it, just like they did with 100k in Dec 2021.
As I said many times before, for regular long term investor just keep buying Bitcoin while it’s cheap, don’t wait for 10k. Stay away from altcoins for now, if you plan to buy any at all.
On-chain still holding up most metrics around a point showing me that last leg down should happen very soon, so the longer we hang around here the less likely I will think it is going to happen. Either way, I don’t see conclusive evidence that we will not see lower prices or final miners capitulation.
I will talk about my views of 2023 and where crypto prices might go in January.
STOCK MARKET
As mentioned earlier, despite bulls trying to convince everyone we are only going to go up, I do not see anything remotely positive for us in first half of 2023. Let’s have a look at what is likely to happen in the coming 4-6 weeks based on how NASDAQ always behaves after registering 3 losing weeks in a row after a bullish mini rally in an established down trend.
In 2000 we had 3 significant moves on average IXIC dropped around 37% with last leg down lasting 251 days.
2008 bear market was not as long, but we’ve also had two rallies after which 3 weekly red candles heralded further pain for risk-on assets. On average 26%, but as you can see final move was 40%+ and I am expecting something similar in 2023.
As you can see we have 3 weekly red candles in a row 3rd time in this down trend, so it is potentially the last leg down. Considering this I am expecting this to be the largest drop in % in this cycle, with a likely drop from current levels of 35%, stopping at Covid March 2020 support.
We could have a smaller drop first with another little bullish recovery to then slowly grind back down to 7000, but that does not matter, what you should be prepared for is more pain in the coming months for risk-on assets and that translates into much lower prices on crypto too.
I know some still think TA is voodoo or reading from tea leaves, but when your analysis is backed but broader macro outlook, don’t think you can ignore what I am showing here.
Once again THANK YOU all who followed me throughout the year and hope my analysis helped one way or the other. Please share and follow me on Twitter where I post more frequently, if I feel there is something important happening concerning crypto and stocks.
HAPPY NEW YEAR!!
Great newsletter. Wish you all the best during this festive season.
Thankyou for continuing to provide great objective advice throughout this tough period. Greatly appreciate you for doing this consistently.