Ok so how long can we keep scaling this Skyscraper?Bitcoin has a bright future. A future that will change finance along with many other Cryptos a future I have no doubt holds in the cards Bitcoins that will shuffle hands at 6 figures. This post here isn't here to debate that. Rather to ask and to wonder what does the future of such a golden child hold from now until April? Bitcoin in no doubt has been pushed into a meteoric rise from depths of 5k dollars last year to 700% as of writing this now. In the last month and a half blitzing its all time high and doubling it. The momentum unshakeable as it cuts through short stop losses like a knife pulled from a furnace onto unsalted butter left out in Arizona. Billions of dollars have been ripped forcefully from Short traders hands as bitcoin has relentlessly gone up in an exponential function best described as y = x^3. It damn near has gone vertical.
With any type of price movement like this doubters emerged. In fact doubters have been emerging, in force since 10k, 15k, 20k ,25k, 30k, 35k and 40k. All but the latter being wiped clean. Yet all had one common true belief in common, this can not go on forever. There must be some significant dip, dump, crash, fall, correction, doomsday, trend break, slip or whatever you want to call it, to establish at the very least a new line of support. This is just how all assets work overtime, immortality is only contained in the reams of fiction or in certain types of Jellyfish who float amongst the Pacific and Atlantic Oceans. So when will Bitcoin shuffle lower. That is to where I see it on one of the two trendlines I have generously drawn pointing back months and months? Additionally can one make a decision to dump some bags perhaps even reverse position and have patience to enter back in? I write this to say despite how precarious BTC's price action has been Bears ought to be really careful.
This last week someone on the Cryptocurrency Chat shared with me a link to btbt.com that showed a live tracker of Greyscale holdings of Various Cryptocurrencies, namely of my Interest BTC. Viewing such you can observe long months of stagnation followed by steady buying for roughly a month followed by another flat stagnation in holdings. While in many of these periods of stagnation BTC has gone up, the addition of more BTC those times are correlated with strong price movement in BTC's underlying price. Well surely many of you will say, "Yeah Rustygee I know institutions manipulate price so what?". And others will say "Greyscale is a drop in the bucket, you are drawing correlations where there aren't any, greyscale is chasing prices up to not get left out". I have certainly found myself on both sides of this debate myself. The truth is nobody has the answer, but what we do have is data and the mission statement of the fund.
The site: www.bybt.com
Why I hope to convince you the reader of in the next few paragraphs is that by observing Greyscale investment holding information you can help identify fair price or stable prices based on where they are adding coins.
So why does anyone actually buy shares in Greyscale? I mean if you are going to own cryptocurrency, a product or commodity whatever you think of it as, that is based in its decentralization why place trust in a central party, one which it's mechanics are obscured to you? Well its boring people that's who, not people who are reading post here on TV. Its either Pensions, management firms or older people who do not want to wade into the waters of having publics and private keys or don't have children they can ask to do it for them. Greyscale while having some institutional backing is mainly upper crust retail investors, and as such helps serve as a gauge of the continued interest in bitcoin above the shouting fray of the twitter cacophony. This question is for the managers of Greyscale, when do they decide when to purchase with the new funds they have acquired. They clear have on/off times for when money can be invested but surely they are some bit strategic on when to gobble up new coins, and we are talking over thousands of coins a day now as of recent.
As with a regular ETF you would find on your Schwab or Robinhood they are obligated to rebalance daily, if not multiple times a day, they cant really wait for a better price as they aim to mirror the asset as close as possible. Greyscale though isnt an ETF, and presumably they do get some choice in the matter on when to add Tokens to their coffers. And add tokens they have, adding 65k~ in the past 30 days that's 10% of the total fund's value, and 8762 as of the 19th. Despite BTC rocking between 32k and 40k they have added 32k tokens alone in the past week. To me this indicates that those who are managing Greyscale do not foresee such a correction or dip lower, it almost seems panic rushed buying given how much buying relative to the fund's size we have seen. Presumably this is the case with other BTC funds out there, and with Coinbase opening a Custody program for ultrarare customers, it seems patience isn't a virtue going on right now. If perhaps I was working at greyscale and I had to add the equivalent of 1% of Greyscale's fund size in new BTC purchases soon, buying at 36k,40k,or 32k if lucky wouldn't really concern me as the average cost basis wouldn't be too effected by it. Conversely if like this week where they added 5% of funds value in new purchases with the information at hand I would try and wait until there was some return to those supports drawn above, perhaps snag those coins at sub 30k. It seems these big buyers know something we don't know or know the benefits and future price will make the differentiation between 28k and 35k look like nothing.
The future for BTC is bright, and I am currently going to baghold half and then look potentially into a short of the other half if shorter term supports are broken, yet do it with tight stop losses and a willingness to quickly swap long as soon as the rooster wakes up.
LONG STORY SHORT ; It seems that large institutions are unconcerned buying at these very high prices despite technical being strongly suggestive of a short. Each bitcoin they gobble up is one less that is likely in the trading pool and locked away. They probably dont see short term downside so why should we? Tread carefully and fully expect to be wrong.
