Inferno Friday market report

TL;DR waiting, endlessly waiting...

There is an inevitability to market cycles. While markets are inherently unpredictable in the short term, in the long term we have macro trends that have a clear direction. We don’t know when that trend is going to end, or at what price things will turn around, we just know the direction of travel. And we know we’re not at the destination yet.

So although we’re expecting resolution that will involve:

• A re-test of the 200 WMA (currently around $3,300)
• A high-volume capitulation of one form or another

That will happen in its own good time and there’s nothing we can do but wait it out. Bitcoin’s current drift sideways on very low volume is highly reminiscent of the same pattern in October, before the sudden crash through $6k and down to $3,100. Given that the price is now practically sitting on the 200 WMA, the next move could be sooner rather than later, but there are never any guarantees. Another factor that might play into an impending resolution is the fact that the 50 and 100 WMAs are about to cross, which could well trigger a round of selling from bots with those conditions programmed in.

At the time of writing, bitcoin is staging a small rally, but we’d advise caution. Every similar green candle to date has resulted in a lower high. That has been the pattern and until we see higher highs we see no reasons for undue confidence.

Longer term, of course, we’re as bullish as it gets. The underlying picture is great. Transactions per day are rising, and have been now for over six months. Many of these are down to Proof-of-Proof – the practice of recording the state of smaller blockchains on Bitcoin, to protect against 51% attacks. Still, adoption is adoption and this is just another use case for Bitcoin.

We also have a report that suggests Bitcoin’s core infrastructure is becoming more decentralised, thanks to competition in the mining sector. And a final piece of news in global adoption is that Argentina has started accepting bitcoin for public transport. Thriving economies are more circumspect, but failing states have figured that bitcoin offers a way to pay for goods in something other than the imploding local currency.

That’s all for now! Stay tuned.

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