Crypto Chartbook: Trust, Debt, Bitcoin

Once we expanded barter through commodities with paper “I owe you‘s” (started by the Medici), we entered a system of trust. While a direct exchange prior without a middleman was easy from the view of trust, a system of paper with underlying commodities held by the state got more and more complex. In 1971 Nixon abolished the gold standard and with it, trust got challenged to the next level. Now the dollar is entirely dependent on the trust in the government. Trust is easily given when all is fine but when troubles arise people start asking questions. Trust, Debt, Bitcoin.

Overall, from 1913 into today’s value one US-Dollar got devaluated down to four cents only thanks to governments constantly inflating the money supply. A loss of ninety-six percent! This is only tolerated by its users since this loss is stretched through time and less noticeable as a result. With personal, corporate, and government debts at current times nonrepayable, inflation being far from the less noticeable two percent per year, a day of reckoning is imminent.

BTC-USDT, Monthly Chart, Price analysis, what’s different this time?

(Click on image to enlarge)

BTC-USDT, monthly chart as of November 23rd, 2020

BTC-USDT, monthly chart as of November 23rd, 2020

We already had Bitcoin attempt price levels like we are trading right now at in 2017 and it bounced from there nearly one hundred percent back to its original levels. Should we fear this to happen again? No! 

Looking at the monthly chart above, one can see that at the time (A) the move started from US$2,817 ending at US$19,798 while this time around (B), the movie went from US$3,782 up to US$18,965 so far. This makes move A a 602% advance while move B is only 401%. Also move A developed over four months, while move B took nine months with two breathers in between (pause).

Now, as we are approaching these all-time highs in Bitcoin for the second time, this resistance is weakening, and Bitcoin has also built a solid support zone below at the US$14,000 level. Concluding that the feared, or for many who want to enter or reenter Bitcoin hoped for, retracement might never come (1). Bitcoin can certainly pullback for a healthy retracement (2, 3, 4), but most likely not a very deep one if at all.

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Disclaimer: All published information represents the opinion and analysis of Mr Florian Grummes & his partners, based on data available to him, at the time of writing. Mr. Grummes’s ...

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