May 11th 2021, Crypto Chartbook: The social value of Bitcoin

Much criticism is in the air about Bitcoin being a payment method that allows criminals to hide their activities. Much less is shared about how Bitcoin is liberating individuals and their needs to express themselves through monetary use in an expanded social value. The amount of unbanked and underbanked in America is consistently rising. We are not only talking about illegal immigrants here. Living behind and outside the financial mainstream are low-income families, those who have no access to credit, and those who are put on a non-account list due to past financial mistakes. Not everybody is a criminal or avoiding debt collectors. A large group of underage is excluded from the banking system. The number of citizens who can’t afford minimum account requirements and fees and, as such, have limited access to financial services is plenty. The social value of Bitcoin.

Immediately you are an outcast from grocery store reward cards and retail loyalty programs. Add those 10–20% increased costs on your food and goods bills in addition to ramped inflation prices, and you are underwater quickly. We have outlived antiquary systems of antisocial payment systems. As such, we see Bitcoin prices further rising based on the apparent fundamental data and a world demanding a more social and more modern way of self-expression and doing business.

Bitcoin in US Dollar, monthly chart as of May 10th, 2021.

It is not only crucial in fundamental data and the underlying story of a market to try to keep it simple but in technical analysis as well. Without clarity in the bigger picture, one shouldn’t attempt to trade smaller time frames. A look at the monthly chart of Bitcoin above reveals its strength within its uptrend.

Breaking its range in October last year, a steep uptrend followed. In February this year, Bitcoin seemed running out of steam rejecting prices above US$58,000 only to see another run-up in March. The Doji candlestick formation in April finally gave the trend a pause. Classified as in indecision bar, it still showed some strength, with the lower wick part being, the longer one.

The astounding aspect is that we have not seen yet in May the bears to seem to get a strong foot into the door. There has been only a brief dip so far. While the month is still young, for now the bullish indications outweigh a bearish consensus.

Bitcoin in US Dollar, weekly chart as of May 10th, 2021.

Now zooming into the weekly time frame, the market shows no difference. With these extension levels, it is atypical that we see this length of a sideways breather in opposition to a stronger fade of prices and a more bearish dominance.

Strong resistance zones are always ideal for some partial profit-taking (red box), and as such, we advocate our quad exit strategy. We wouldn’t take all chips off the table here, though. And we wouldn’t short a bull this strong either.

Noteworthy here is the significant price level of US$55,510. Prices closing above or below this price level will determine if we are heading sideways or temporarily further down.

Bitcoin in US Dollar, weekly chart as of May 10th, 2021.

Another weekly view unearths more signals of strength:

  • Swiftness and size of the recovery from the temporary dip (red and green line). The Bounce made it back above the 0.618 Fibonacci retracement levels and prices are still trading between 0.5 and o.618.
  • Holding extended levels of the standard deviation of considerable time (dotted lines with the mean near US$31,900)
  • Prices trading within a significant support of a supply zone based on volume transaction analysis (yellow box)

We are not saying that a breakout to new all-time highs is imminent. Prices most likely decline from here. We are saying that Bitcoin’s typical normal trading behavior expected strong fade has not matured in its expected time frame. There is inherent strength within the Bitcoin market that make price declines attractive buying opportunities and a continuous sideways movement a warning signal for possible higher trading levels to come within the summer.

Money is a means to express yourself. Most like cash because it is anonymous, instant, and a practical way to fulfill our wishes and needs. Is it really? Or are we living in a more modern world of electric vehicles and renewable energies? It isn’t entirely untraceable due to its serial numbers, and it is expensive. Cash handling is cumbersome, and any larger business has massive backdoor operations that are a security threat and labor-intensive. It is impractical for long-distance and just old-fashioned, so the planet needs resource-oriented efficient operations in all forms.

Bitcoin isn’t just of social value, but it fits its times. It expands the freedom of individual expression, and it is planet-friendly with a low imprint. It is the future.

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