Bitcoin Market Update 9/24/2020

You didn’t think you were going to get away from me talking about bitcoin, did you?

I wanted to take a look at the bitcoin technicals and make a few predictions about the future price action of bitcoin. It’s mostly futile, but it’s a fun exercise.

Here is a chart of Bitcoin’s price action over 2020. Two things clearly stick out in this chart: the first is the massive dip we got in March that slammed bitcoin price down to “suicide bridge” levels at 3500. The second is how magnetic the $10,000 mark is for the bitcoin price.

We tested that price (and were rejected) in November 2109, February 2020, and June 2020, and then tested it again more recently in early September and again over the last few days.

The $10,000 mark continues to be a pivotal price for Bitcoin, and probably represents a good buying opportunity should it return to those levels.

Furthermore, the chart shows that amidst the macro backdrop and insanity taking place across the world, bitcoin has proven extraordinarily resilient.

Areas like Lebanon and Turkey that have seen dramatic fiat debasement have also seen dramatic upticks in capital flight into bitcoin. In a crazy world, bitcoin provides a means for people to step away from the current system — and it’s succeeding in spite (and because) of its extreme volatility.

Personally I have found myself buying more bitcoin due to the Microstrategy news and my shifting viewpoints on the value of physical gold. I have also chosen to purchase a small number of Put Options on bitcoin in the case that a global liquidity crisis similar to the one we had in March causes a pre-election dip in Bitcoin.

Overall, however, I believe that bitcoin’s network effect is growing at a rate that could easily push the bitcoin marketcap towards $1 trillion over the next 18 months or sooner.

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