Bitcoin Price: Head Fund Manager Predicts ‘Opportunity Of The Year’ Soon
26 Janeiro 2024 - 5:15AM
NEWSBTC
Charles Edwards, the founder of hedge fund Capriole Investments,
offered an in-depth analysis of the Bitcoin market yesterday. His
review offers a granular perspective on the aftermath of the
historic ETF launches, the pivotal role of major players like
Grayscale, and the interplay of market mechanics shaping Bitcoin’s
trajectory. Bitcoin Market Summary: ETF Launch Edwards acknowledged
the ETF launches as a pivotal moment, characterizing it as “ETF
Mania.” He emphasized the hindsight realization that the ETF launch
triggered a short-term “sell the news event.” Edwards elucidated,
“A portion of this can be attributed to the Grayscale outflows of
over $4B, approximately half of which was forced selling by the FTX
bankruptcy estate and another couple billion likely to cover
Grayscale’s debt obligations.” However, he projects a shift in the
outflow rate from Grayscale, stating, “I expect the current rate of
outflow will drop to a more sustainable trickle over the next few
weeks (after another few billion out).” Edwards also highlighted
the end of Grayscale’s multi-year lock-up period, allowing
long-term investors to finally close their GBTC positions at market
prices. Related Reading: $130M Silk Road Bitcoin Stash To Be Sold
By US Government Regarding Blackrock and Fidelity ETFs, Edwards
noted their significance, saying, “The brand names of these two
behemoths in the traditional asset management space means every
billion they bring in, adds an order of magnitude more credibility
(and therefore flows) into Bitcoin and crypto as a whole.” BTC
Technical Analysis In his high timeframe technicals (HTF) analysis,
Edwards observed a strong rejection at mid-range resistance during
the ETF launch. He pointed out, “The nearest HTF support at $35K
would likely represent a great opportunity to get long for the 2024
Halving year (if we are lucky enough to get there).” Edwards also
mentioned, “Alternatively, a strong close above $44K will likely
see the trend continue to range highs ($60K).” For low timeframe
technicals (LTF), he dissected the December/January consolidation
and the $44K “fakeout” during the ETF launch. Edwards explained,
“Fakeouts often resolve in price movements to the other side of the
range, as we saw.” He added: Therefore, the most interesting price
point locally is $41K. A daily close above $41K would likely
represent a downtrend fakeout and a swift return to range high at
$44K (+). If we simply wick into $41K and start trending back down,
that would be a great risk-off trigger for a potential move lower
toward $35K HTF support. Fundamentals: The Role Of On-Chain Data
Edwards underscored the importance of fundamentals and on-chain
data in understanding market dynamics. He introduced Capriole’s
Bitcoin Macro Index, stating, “This Index includes over 50 of the
most powerful Bitcoin on-chain, macro market and equities metrics
combined into a single machine learning model. This is a pure
fundamentals-only value investing approach to Bitcoin. Price isn’t
an input.” Related Reading: Bitcoin Attracts Millions In Chinese
Capital Despite Ban: Report According to him, fundamentals have
entered a period of slowdown which aligned with the near top at the
ETF launch. “That fundamental slowdown continues today with price
down -20% from the highs in January so far,” Edwards remarked.
Chart Of The Week The hedge fund manager also introduced the
Advance-Decline (AD) Line as a chart of the week. He explained,
“The AD Line is calculated as the cumulative sum through time of
each day’s count of advances less declines.” Edwards highlighted
its relevance, stating, “Today we are seeing the first such
breakout since 2016.” He drew parallels between the AD Line’s
breakout and Bitcoin’s historical performance, noting, “During
these periods in 2013 and 2016, Bitcoin was also in a drawdown from
all-time-highs (like today) and began two of its largest cyclical
rallies in history.” The Opportunity Of The Year In conclusion,
Edwards offered a nuanced outlook. He cautioned, “Bitcoin at
$39-40K is not a screaming buy today.” However, he projected, “The
opportunity of the year likely awaits in the $32-35K region, which
if we are lucky enough to see, will probably be the last time we
ever see it.” Edwards concluded with a forward-looking perspective,
stating, “Pending that, we await patiently for a momentum breakout
of $41K (aggressive) and $44K (conservative) for resumption of the
meat of the primary 2024 trend. Up.” At press time, BTC traded at
$40,003. Featured image created with DALL·E, chart from
TradingView.com
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