Sailing along the 30-day moving average for 5 days, pulling the 7-day moving average back to the 30-day, Bitcoin (BTC) suddenly gained momentum. With a swift and graceful leap, it soared above the 65k "ground" level of the 30-day moving average and gracefully ascended the 70k dollar "wall
Sailing along the 30-day moving average for 5 days, pulling the 7-day moving average back to the 30-day, Bitcoin (BTC) suddenly gained momentum. With a swift and graceful leap, it soared above the 65k "ground" level of the 30-day moving average and gracefully ascended the 70k dollar "wall." The spectators burst into applause, marveling at BTC's extraordinary acrobatic feat, akin to a skilled martial arts master deftly executing their techniques, leaping 6 points to earn thunderous applause.
Echoes of the Past
In yesterday's (3/25) Chain School's Newsletter, "The Nature of AI and the Enigma of Nvidia," analysts' insights were shared: "The current 73,000-61,000 BTC correction is very likely nearing its end." Chain School echoed this sentiment, stating that "there is no fundamental basis for a prolonged decline." These words were penned in Chain School's March 16th article, "BTC at This Stage May Not Have the Foundation for a Prolonged Decline." At the time, BTC had just dipped below 70k. As the reverberations of those words subsided, BTC swiftly regained the 70k mark.
The 70k Threshold
As early as March 9th, Chain School's Newsletter, "Is This Bear Market Black Swan an Early Start to the Bull Market?" and March 11th's Newsletter, "BTC Accelerates Upwards, Breaking the Upper Limit of the Box at $70,000!" both highlighted the critical level of 70k, which represents the upper edge (lid) of the major cross-cycle box formed since 2021.
The Time Power Law Model
At the time, Chain School also illustrated the market situation with the following diagram:
Shortly after Chain School created this diagram on March 9th (when BTC was at 68k), BTC tested the middle trajectory of 74k (the purple line in the diagram) on March 14th, eventually reaching 73.8k. Readers interested in the origins of this middle trajectory can revisit Chain School's March 25th article, "A Further Exploration of Bitcoin's Time Power Law Model and its Cointegration."
Three Years of Holding, Two Vast and Empty Masses
Looking back at the past, Chain School's unwavering research methodology has been to formulate hypotheses that merge rational cognition and intuitive market perception and then verify these hypotheses with empirical data. This approach echoes the principles of Karl Popper's falsificationism in scientific truth verification, which sets "falsifiability" as the defining criterion for scientific validity. While many may be unfamiliar with Popper, his student, the renowned George Soros, is likely a household name.
The Grand Middle Ground Theory
As early as December 18th, 2021, when BTC stood at the 46k mark, roughly the first third of the box, Chain School penned an article titled, "The Bull Market is Still in Mid-Swing." In this article, Chain School boldly posited the "Grand Middle Ground Theory," suggesting that BTC was forming a cross-cycle box with 30k as its lower boundary and 60k as its upper boundary. Thus, the notion of "mid-swing" was born. Subsequently, the 45k mid-line emerged as the oscillation hub of this massive box.
Mid-Hub Oscillation
In retrospect, the bull market of 2021 did indeed serve as a preparation for the box. The underestimation lay in the initial assessment of the box's lower boundary, which eventually dropped to 16k. However, this had a negligible impact on the estimation of the oscillation hub: the actual hub of the box is (70 + 16)/2 = 43k, or $43,000. (Note that the visual spacing of every 10k on a logarithmic scale is not uniform, and one cannot rely solely on the visual midline.)
The Smart Move
Given this foresight, what action should have been taken when BTC fell below the hub? Evidently, there was only one logical choice: "buy the dips."
Reversal of Pressure
Presently, BTC is testing the pressure level at the upper edge of the box, which could transform into a support level. Once support is affirmed, the box will be decisively broken, heralding the conclusion of the three-year box phase and ushering in a new chapter!
Comparing BTC to Nvidia
The left side of the above diagram depicts BTC, with the phase we are currently in indicated by the red arrow. The right side presents the stock price trend of Nvidia. The red arrow signifies the retest of support after a phase breakout, which, upon confirmation, triggered a rapid surge. We observe striking similarities in the speculative patterns of these technical charts.
Wyckoff Accumulation Pattern
This pattern closely resembles the SOS (Signal of Strength) that concludes the confirmation pattern of the right-side D phase of the Wyckoff accumulation pattern. For a detailed understanding of the Wyckoff accumulation pattern, refer to Chain School's August 12th, 2021 article, "Dollar-Cost Averaging Down in a Summer Market."
The Terminal Station
This precise juncture represents the final stop where countless retail investors disembark, never to return.
The "" ( Trifecta)
Chain School coined the term "" ( Trifecta) in its June 30th, 2021 article, summarizing the common pitfalls of retail investors:
- Topping up at the Peak
- Cutting Losses at the Bottom
- Booking Profits at Break-Even
70k: A Golden Opportunity
For those who have endured three years of exposure to the wind at 60k in 2021, 70k presents an exceptional opportunity to "book profits at break-even."
Waiting for the Halving
For experienced retail investors (those who have been through one or two halvings), many anticipate a steep decline before the next halving, similar to the significant pullback of "312" in 2020. (Refer to Chain School's March 12th, 2024 article, "Another Year, Another 312.")
HODL and Farewell
Understanding these psychological dynamics, this juncture calls for a final exchange those leaving and those joining share their farewells.
The Guiding Light: Spot ETFs
Who is the tour guide leading us into this new chapter? Spot exchange-traded funds (ETFs): BlackRock, Fidelity, Ark Invest, Bitwise, and more. (Refer to Chain School's February 11th, 2024 article, "US Bitcoin ETF Holdings Surpass 200k BTC, Making It the Most Popular ETF in Wall Street History!")
The Tourism Industry
In the context of a tourism group, what is the tour guide's top priority? Ensuring a steady flow of people and capital into the tour group. As the saying goes, "An ironclad tour group, with a revolving door of tourists." Just as a tour guide's income stems from guiding fees, BlackRock's revenue originates from management fees. Regardless of market fluctuations, as long as there are consistent clients and the ETF maintains its size, BlackRock can earn a steady income.
A Simple Calculation
A simple calculation reveals that if BlackRock manages an ETF fund worth 500,000 BTC, with an average price of $200,000 per BTC, it would generate a stable income of $250 million annually from management fees.
Long-Term Strategy
Therefore, BlackRock
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