June 14th 2021, Crypto Chartbook: Bitcoins’ actual value

Bitcoin allows getting easily confused. How does it work? What is it worth? Why all the hype? Curiosity aches to get satisfied, but again, there is always a debate if you read up in the news. El Salvador recently allowing it next to the US-Dollar as a legal tender created two camps again. Bitcoin fans see a major breakthrough in a country legalizing the tender. Opponents find a country like El Salvador not credible enough. Whom to trust? You need to ask yourself only one question: “Why would there be so much emotional investment for over ten years already into something worth nothing?” Bitcoins’ actual value.

No hype lasts that long. What can stay this long is doubt, if not fear, about something new. Change is certainly something many are afraid about. You can touch Gold, build real estate, see land, and it all has history, but that history also includes in all tangible asset classes there to be times when it got taxed or seized.

What we are facing now could be a larger cycle that one might intellectually grasp, but who does believe that we see times of hyperinflation and the dollar rendering worthless. Very few. Hope is a natural tendency of the human spirit to be trusted in at times of adversity.

In our opinion, that is the only reason why Bitcoin is still so cheap. And herein lies the opportunity for each individual to still preserve their wealth and or create it.

Bitcoin in US-Dollar, daily chart as of June 14th, 2021

Consequently, to our conviction that Bitcoin can not be thought away anymore, we took three low-risk entries after Bitcoins’ recent decline into the congestion range. We posted these entries in real-time in our free Telegram channel. We took partial profits on all three trades to eliminate risk and by now have raised the stops to break even entry levels for the remainder of exposed capital.

After news that Tanzania might join El Salvador in accepting Bitcoin as one of the main payment method methods, prices soared to break through the upper triangle resistance line. What was resistance has now become support. The most substantial supply zone to price is near the POC (point of control, most transaction volume at this price level).

Another sign of strength is that at the last decline, prices only managed to go as far down at US$35,000, a far cry from previous US$33,000 levels, indicating strength.

Bitcoin in US-Dollar, weekly chart as of June 14th, 2021

Looking at the weekly chart, we can determine that Bitcoin now has cemented a nice double bottom slightly above US$30,000 (yellow line) after a strong down move. We find three high-volume nodes supporting price (green horizontal lines).

Noteworthy as well is that the point of this reversal has happened right at the mean (white directional channel with blue dotted line). Consequently, we anticipate two scenarios (A, B) to be the most likely price behavior of the future. Should more fundamental data flow into the market supporting Bitcoins recently gained upward momentum, scenario A is expected to be found over the third quarter.

If the bears would be temporarily successful, we anticipate them not driving prices lower than US$27,500. We would see price only briefly giving way to the downside to snap back up with vigor.

Bitcoin in US-Dollar, monthly chart as of June 14th, 2021

What always reveals the fundamental forces at play and the leading guidance for a trader’s choice of trading tools/systems are the larger time frames. Examining the monthly chart, we can see the strength and direction where Bitcoin is most likely to head. Price turning at the midpoint of the linear regression channel is no accident.
We see a high likelihood for this month to end in a green candle and consequently for July as well.

It doesn’t matter where you look; the opinions are always torn into two camps for Bitcoin. Recent attacks of Bitcoin not being green due to its energy consumption provided for much debate again. We are not taking sides. It again seems more principle-based to view from a larger perspective why people put numbers on value output ranges of energies merely based on an emotional basis. Electric cars and wind energy were fought at their time just as well.

Bitcoins’ actual value:

As investors, we never have a sure bet. We try to stack the odds in our favor, and with sensible money management produce in the trades, we engage in more profits on the winning trades versus the losing trades losses. Bitcoin is no different! Don’t bet the farm and pick low-risk entry points. We do not think it to be wise to have extreme opinions in either direction. Or in other words, any form of emotional engagement in the markets is typically not producing favorable results. What we are empathetic about though is, that doubting Bitcoin on a fundamental basis is simply being ignorant of a vehicle with proven facts.

Engaging in this market has its rewards for sure. It might turn out to be one of the better long-term trades in challenging times. Bitcoins’ actual value is yet to be determined by a future no one knows, but its credibility is unquestioned.

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