Market Takeaways

  • Despite our long-term conviction, it seems bitcoin’s struggles may continue in the short-term barring an unexpected catalyst or drastic change in policy.
  • Technical charts leave much to be desired; BTC is fighting a morbid head-and-shoulders pattern and it recently experienced the inevitable “death cross”, where its 50-day moving average crossed below its 200-day equivalent. Historically, this is a bearish signal, but BTC has a tendency to rebound (sometimes quite dramatically) in the days / weeks immediately following the event. Bitcoin’s long-term uptrend remains intact though, but price is testing its 12-month moving average, another key support level for BTC historically.
  • Plenty of concerns have proliferated the bitcoin market recently, causing short-term headwinds for adoption and price (e.g. China derivatives & mining clampdown, “taper talks” by the Fed amid rising inflation fears, ESG concerns, GBTC unlocks). As a result, we’ve observed significant selling by short-term speculators and miners over the last few weeks.
  • Long-term holders are largely undeterred, however, and have begun accumulating BTC from “weak-handed” market participants recently, reversing an 8-month trend of net declines. The % of BTC supply that hasn’t moved in at least 12 months formed a peak in October 2020, which preceded BTC’s swift run up to $64,000. Looking at the latest data, this me

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