Is BTC's Fate Sealed?

I’ll admit that’s a dramatic headline, but I’m still a bit in awe at how well BTC continues to track its post-ATH drawdown from last cycle.

I’ve shown this chart before, and right now BTC is trading exactly where it was at the start of June 2019, just over two weeks out from its subsequent local top.

Using a sample size of one feels a lot like putting your faith “in the gods” ahead of a 12th century Medieval sword fight, but so far they haven’t been too off the mark.

As Andrew pointed out in a previous post, “In the previous two market cycles, a new bottom was found 59 and 53 weeks following its cycle top. Coincidentally this cycle cemented a bottom 54 weeks from its top (provided the low is already in).”

If BTC continues to track its performance after its last two prior cycle bottoms, it would appear to be approaching a similar impasse, manifesting as another period of potential consolidation.

BTC finds itself in a range-bound battle of its own, as was highlighted in our latest Monthly Chartbook.

“The two obvious areas, should price deviate from the two-month micro range ($27.5k-$30.5k), are identified with white boxes in the above chart. You’ll notice that they coincide with the volume gap below the current price level and the pre-3AC liquidation range high. These areas are ripe for fireworks.” — Monthly Chartbook – A New Consensus?

There’s a lot of factors at play right now, but it does feel like several things are about to come to a head all at once.

With the debt ceiling drama escalating and the X-date for a deal now being measured in days – not months – there’s a decent probability we could see another big move before summer even gets here.

Fresh US CPI data tomorrow morning will surely add more speculation around the Fed’s future path too. Consensus is calling for a 5% yoy print on headline CPI with core CPI at 5.5%. Indications of a softer print would be bullish for risk assets, and could even be the catalyst for a sizable market move given the recent compression in volatility.

The question now is, which way will this coiled spring leap?

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