Dear subscribers, On-chain activity and price action has been making loud noises in the last 48 hours. In my last letter we saw the largest impulse of coins changing hands in recent history coinciding with an influx of new users unseen since 2017; a seriously bullish setup. Since then price has rallied from $13k, topping out at $16k.
Hey Willy, Thank you very much for your outstanding data research. Once the data shows that BTC will make a consolidation or correction, you will update your forecast at the first time, right? Because I want to wait until a pullback point, buy as much BTC, and hold for a long time. Have a great day!
Hey Jason, this letter *IS* the "consolidation" signal. Buying inside this band is not a bad time to get in since you want to HODL long term. Consider dollar costing in, it's usually a mistake to time every last move unless you're a pro at trading.
Take a look at the blue NVT Price Line on this live chart.
NVT Price is a model that gauges the organic floor price set by spot buyers. It says $12k will be the lower bound, but IMO it will be a huge stretch to drop into this region based on the continued buying pressure we are seeing right now.
No guarantees it'll continue to work. For this coming next macro top I'll be relying on reading on-chain fundamentals than just technical models like this.
That's a great question, and a very realistic pull back target. It's in the nature of a reflexive asset like BTC (which is fixed supply and still early in its adoption). I'd say 61.8% - 78.6% Fib levels seem appropriate.
I have a suite of market top data research to highlight the approach into the mania phase, and signals for the blow off; the former being the high alert warning and the latter being the best time to act. This will all go into the letter as we approach.
Fun fact: NVT Ratio and NVT Signal (being the first on-chain buy/sell signals we had from the 2016-2017 era) was especially useful to sell the macro top. It helped me exit to cash with high reliability after the last macro blow off top. There are much better signals now, many I'll keep unpublished until it's time to execute their signals (it'll be less effective if a bunch of smart money is watching them ahead of time).
You're the Man Willy. Helping my dumb money best smart money. Last cycle it seemed easier to wait for signs of an ABC correction. Do you think that strategy is more likely, or are you going to try drop a screaming rocket 🚀? (I don't know what the opposite of catching a falling knife is)
I don't personally trade Elliot Waves so I can't really comment. I trade fundamentals which really means (for the next 12 months at least) low leverage long positions on every on-chain bullish forecast and exiting at the first signs of reversal.
I find myself often expecting abrupt 20-40% corrections just around the corner, and I've been selling too frequently to preserve dollars while hoping to stack sats after the correction. It's caused me to miss out on some of this run; while gaining dollars I have lost sats (and I'm hating myself for it, haha). It seems like a lot of CT is calling for revisiting $11-12k, or even lower. Do you think with the increasing number of large long-term investors (PTJ, MicroStrategy, Square, etc), higher number of hodlers, or any other changes to the market you may know of, that those steep corrections in a bull market may become more muted -- say 10-15%? Any advice on how to stop being ever-fearful of large corrections?
My other question is regarding countries turning to BTC to avoid sanctions (e.g. Iran). Do you think this could prompt the US (or other countries) to ban bitcoin? I know that a ban wouldn't work, but it would still tank the price drastically. My hope is that banning it now would come at too high of a cost in collateral damage, with so many big, legitimate players involved. I know that's not on-chain analysis but I thought maybe it's something you've discussed in your circles. Thanks.
Hi Shane, sorry to hear of your losses on BTC basis.
(1) TRADING THIS BULL MARKET
I've run backtraces of long vs short strategies during full bull and bear cycles and you really don't stand to gain much in the bigger picture selling to cash, *especially* during the bull market phase we are in now; just don't do it, unless you're a professional day trader, pull-backs during the main phase of BTC bull markets tend to be fast and v-shaped, very few people catch the bottoms. A 1x long strategy is 27x more profitable than 1x short according to this backtrace using a simple MA cross. https://twitter.com/woonomic/status/1306101535399501824 (1x short = selling to cash).
If you are experienced with leverage, I would consider using long positions during times of bullishness, then sit in BTC when the forecast is neutral or bearish. For example; how I trade these multi week on-chain swings (now that we are in the main bull phase) is 0.5x - 1.0x leverage longs (strictly no short positions) where my liquidation is so crazy low I don't feel compelled to track every little move. I wait for the 3-6 week on-chain swing to complete, then I take that profit and move it to cold storage.
(2) BITCOIN BAN?
Bitcoin won't be banned, the US government long ago realised it can't be stopped, regulatory bodies right now are cleaning up the industry so that the herd can come in, the CFTC has already said this on record. The SEC is approving public companies to hold BTC. Banking operators now have approval paths to bank BTC (see Silvergate, Signature, Kraken, LVL, even virtual banks like PayPal). Offerings like an ETF cannot operate while volatility goes unchecked by price games happening on wild west futures exchanges like BitMEX. Sovereign Wealth funds will likely come in this cycle, wealth of nations.
Hi Willy, this is exactly the strategy I'm considering this bull run for trading BTC with a little leverage. I'm curious, do you use the derivative exchanges like FTX, Bitmex, Bybit etc. with the futures contracts rather than perpetual? Sure there's a little premium but no funding to have to pay.
I like to use both PERPs and Quarterlies. I want to get an additional boost from the premium gains on quarterlies (if I'm on the right side of it) and PERPs are more liquid for hedging smaller moves. Quarterlies with their larger spreads and lower liquidity also removes the temptation of over trading.
I forgot to say thanks for the reply. That backtrace really makes it clear. I hope you're right about no ban. Apparently Ray Dalio thinks governments are likely to step in and fight it at some point. But the signs seem to say otherwise, as you pointed out (at least in the US).
Also, great stream with you and Tone today. I hope you guys keep doing those, they're always well worth the watch.
As far as I know there were 30% corrections two times within the last bull run - so right now I should just lean back and see your coins go up in value - we are in a hodler‘s sweetspot
Willy, I went through your past tweets to see if you shared your portfolio crypto allocation but didn't find it.
Have you already shared it?If so, can you please share it again or at least share one ALT project you are into (you mentionned Radix recently)? I understand it's not a finanial advise but it would help the community to compare with our own wallets.
Also, what is your thought with ETH overperforming BTC in the coming Bull Run?
Tips: could be a great option if in your letter for premium members you share your portfolio allocation.
I had planned to subscribe in the coming weeks but the fact that I have to be a paid subscriber to post a question made me make the move. Awesome.
So, I have three short questions (i understand it's not financial advise by any mean).
1/ There are two models among the bitcoin community about the length of this cycle: some predict the BTC to follow the same pattern as the previous cycles in terms of length, with a BTC reaching 100K in 2021 (Plan B model).
Others see a lengthning cycle with a BTC reaching 100K more in 2023 based on the the-logarithmic-growth-curve.
2/ Current price level is 15,5K. Based on where we are in the cycle, does it still exist a possibiliy for the BTC to pullback to 10-12K in the coming weeks/months?
After such an increase the past days/weeks + some of your data showing that we are in overbought territory, should we wait for a pullback to buy lower or agressively place market buy orders?
We are locked into 4 year cycles due to impulses from halvening supply shocks. The theory around lengthening cycles is based on curve fitting historical data without a strong thesis on the mechanism. We'll be in 4 year cycles until miners subsidy erodes to small enough that the supply shock becomes smaller than the gravitational pull from macro asset cycles (approx 10yrs). At that point macro markets will pull BTC into oscillation around that 10yr cycle. It'll be phase transition.
(2) I don't think we'll go to 10k-12k, the floor is fast moving upwards, NVT Price model (organic valuation floor) says touching 12k would be a stretch. I personally think this consolidation window is the best time to get in before a further run upwards.
I simply would not place bets on visiting the 10k-12k zone again, in the bigger picture it's going for outside odds on a 20% discount for an asset signalling that its already started its 10x run.
As per this latest letter, this is either going to be a short consolidation (say 2-3 days) in a 2-stage pump, or it will be a longer 7+ days consolidation inside the $14.5k-$16k triangle that is starting to form.
Hi, Willy. I had the same doubt that Thibault asked at first. Isn't that possible that BTC is having longer up and down cycles and, at the same time, having the halving cycles as well? I did this humble sketch (https://www.tradingview.com/x/2DWGpq6q/) where, during the bear run after the peak, BTC could have its halving. It's different from the previously cycles so far because usually the halvings happen after the bear run. What do you think about it?
In my view of the charts, which of course focuses on what investors are doing on-chain, the end of bear cycles have always happened 9-12 months before the halvening. You can get a view of it by going to https://charts.woobull.com/bitcoin-price-models/ and turning off all the traces except NVT Price and Realised Price, these are valuations from investors, while the market price is subject to short term FOMO and FUD; and a healthy dose of trader manipulation.
If I was to take an educated guess (no data, nothing on-chain), the top of this bull market will be in Dec 2021, it's in this zone that the halvening supply shock transition has played out, completely spent, and the sell pressure from paying taxes on the 2021 profits come into play.
Since your "consolidation update", I still do not buy in yet, do you think at this current price, it is still good to deploy my new capital for middle and long term hodl? thanks
Pull backs in RSI doesn't necessarily mean pull backs in price, a sideways band can normalise the RSI lower. That said, there are always pull backs on bull runs. I'd use NVT Price as a guide to see how overheated above organic price we are, gives you an idea of the room below price action to fall back to. I can't comment on timing of smallish macro events until such time as it shows up on-chain.
If we were in a bear market or say the sideways band of the first 9 months of this year, then I would say market price needs to come back near NVT Price. But in the history of bull markets, as we go deeper into them, we usually see market price premium above NVT price climb higher and higher as short term speculators get more FOMO.
In the bigger picture (straight up NVT Ratio) we are not overheated, deeply in the buy band. But sooner or later this short term rip from 10.5k will need to rest.
please help me with that one (my friend is losing his mind with this coin) and so do I :)
in the past you mentioned litecoin is oscillator (vs BTC) just like doge etc.. and not degen coin like ont for example..
what is your view on ltc? its one of the oldest alts still around.. does his history play a role and maybe some ogs still like ltc? do they see chikuns coin for multiply btc or not?
LTC has historically been in orbit around BTC, yes, in that regard you can trade in and out of LTC within alt-seasons. The key thing is to know when to go in or out. I personally do TA on Bitcoin Dominance to get a read on it.
LTC being old has excellent Lindy Effect, meaning exchanges list it, wallets support it, traders love trading it; it's super liquid. With that in mind, it probably will stay an oscillator for a while longer. I only see it as a trade instrument, leverage futures is its biggest competitor. I mean you can use low leverage long or short futures positions on BTC for similar effect, once highly liquid DEXes with margin trading become available (private key secured, no custodial or counterparty risk), there's really no need for this category of alts.
If you mean is there is a far away future for LTC existing as a codebase, it has historically been a test bed for BTC codebase; that's useful. But by the shear numbers, if your are HODLing multi-cycle (4, 8, 12 years), you won't get alpha over Bitcoin and subject to higher risk. Best use it as a leverage trade instrument IMO.
Damn Willy your last mega bull btc call was Epic!! Btc Still Mooning 😀
Thanks for the update. This whole squeeze that is about to happen with these coins is going to be so fun to watch play out. Enjoy the weekend!
A huge fan of your work Willy. Great info. Thank a ton!
Great info Willy, keep up the good work
Hey Willy, Thank you very much for your outstanding data research. Once the data shows that BTC will make a consolidation or correction, you will update your forecast at the first time, right? Because I want to wait until a pullback point, buy as much BTC, and hold for a long time. Have a great day!
Hey Jason, this letter *IS* the "consolidation" signal. Buying inside this band is not a bad time to get in since you want to HODL long term. Consider dollar costing in, it's usually a mistake to time every last move unless you're a pro at trading.
Take a look at the blue NVT Price Line on this live chart.
https://charts.woobull.com/bitcoin-price-models/
NVT Price is a model that gauges the organic floor price set by spot buyers. It says $12k will be the lower bound, but IMO it will be a huge stretch to drop into this region based on the continued buying pressure we are seeing right now.
Seems the upper band catch every top of the cycle🥺 what do u think?
It's called the "Top Cap model" for a reason. :)
No guarantees it'll continue to work. For this coming next macro top I'll be relying on reading on-chain fundamentals than just technical models like this.
We ll be here waiting for your Top call😀👍👍your help Is very appreciate Willy👍
Do you feel this BTC bull cycle we see a similar 60-80% decline after the peak?
If so, how will the Bitcoin Forecast plan to advise subscribers that a peak may be near?
That's a great question, and a very realistic pull back target. It's in the nature of a reflexive asset like BTC (which is fixed supply and still early in its adoption). I'd say 61.8% - 78.6% Fib levels seem appropriate.
I have a suite of market top data research to highlight the approach into the mania phase, and signals for the blow off; the former being the high alert warning and the latter being the best time to act. This will all go into the letter as we approach.
Fun fact: NVT Ratio and NVT Signal (being the first on-chain buy/sell signals we had from the 2016-2017 era) was especially useful to sell the macro top. It helped me exit to cash with high reliability after the last macro blow off top. There are much better signals now, many I'll keep unpublished until it's time to execute their signals (it'll be less effective if a bunch of smart money is watching them ahead of time).
hell yes
You're the Man Willy. Helping my dumb money best smart money. Last cycle it seemed easier to wait for signs of an ABC correction. Do you think that strategy is more likely, or are you going to try drop a screaming rocket 🚀? (I don't know what the opposite of catching a falling knife is)
I don't personally trade Elliot Waves so I can't really comment. I trade fundamentals which really means (for the next 12 months at least) low leverage long positions on every on-chain bullish forecast and exiting at the first signs of reversal.
Hey Willy, a couple questions:
I find myself often expecting abrupt 20-40% corrections just around the corner, and I've been selling too frequently to preserve dollars while hoping to stack sats after the correction. It's caused me to miss out on some of this run; while gaining dollars I have lost sats (and I'm hating myself for it, haha). It seems like a lot of CT is calling for revisiting $11-12k, or even lower. Do you think with the increasing number of large long-term investors (PTJ, MicroStrategy, Square, etc), higher number of hodlers, or any other changes to the market you may know of, that those steep corrections in a bull market may become more muted -- say 10-15%? Any advice on how to stop being ever-fearful of large corrections?
My other question is regarding countries turning to BTC to avoid sanctions (e.g. Iran). Do you think this could prompt the US (or other countries) to ban bitcoin? I know that a ban wouldn't work, but it would still tank the price drastically. My hope is that banning it now would come at too high of a cost in collateral damage, with so many big, legitimate players involved. I know that's not on-chain analysis but I thought maybe it's something you've discussed in your circles. Thanks.
Hi Shane, sorry to hear of your losses on BTC basis.
(1) TRADING THIS BULL MARKET
I've run backtraces of long vs short strategies during full bull and bear cycles and you really don't stand to gain much in the bigger picture selling to cash, *especially* during the bull market phase we are in now; just don't do it, unless you're a professional day trader, pull-backs during the main phase of BTC bull markets tend to be fast and v-shaped, very few people catch the bottoms. A 1x long strategy is 27x more profitable than 1x short according to this backtrace using a simple MA cross. https://twitter.com/woonomic/status/1306101535399501824 (1x short = selling to cash).
If you are experienced with leverage, I would consider using long positions during times of bullishness, then sit in BTC when the forecast is neutral or bearish. For example; how I trade these multi week on-chain swings (now that we are in the main bull phase) is 0.5x - 1.0x leverage longs (strictly no short positions) where my liquidation is so crazy low I don't feel compelled to track every little move. I wait for the 3-6 week on-chain swing to complete, then I take that profit and move it to cold storage.
(2) BITCOIN BAN?
Bitcoin won't be banned, the US government long ago realised it can't be stopped, regulatory bodies right now are cleaning up the industry so that the herd can come in, the CFTC has already said this on record. The SEC is approving public companies to hold BTC. Banking operators now have approval paths to bank BTC (see Silvergate, Signature, Kraken, LVL, even virtual banks like PayPal). Offerings like an ETF cannot operate while volatility goes unchecked by price games happening on wild west futures exchanges like BitMEX. Sovereign Wealth funds will likely come in this cycle, wealth of nations.
Hi Willy, this is exactly the strategy I'm considering this bull run for trading BTC with a little leverage. I'm curious, do you use the derivative exchanges like FTX, Bitmex, Bybit etc. with the futures contracts rather than perpetual? Sure there's a little premium but no funding to have to pay.
I like to use both PERPs and Quarterlies. I want to get an additional boost from the premium gains on quarterlies (if I'm on the right side of it) and PERPs are more liquid for hedging smaller moves. Quarterlies with their larger spreads and lower liquidity also removes the temptation of over trading.
I forgot to say thanks for the reply. That backtrace really makes it clear. I hope you're right about no ban. Apparently Ray Dalio thinks governments are likely to step in and fight it at some point. But the signs seem to say otherwise, as you pointed out (at least in the US).
Also, great stream with you and Tone today. I hope you guys keep doing those, they're always well worth the watch.
I wasn't impressed with Dalio's interview. He seemed out of touch with the details. I didn't expect that.
As far as I know there were 30% corrections two times within the last bull run - so right now I should just lean back and see your coins go up in value - we are in a hodler‘s sweetspot
Willy Are u expecting the 100k$ btc Top next year?🤔👍
Willy, I went through your past tweets to see if you shared your portfolio crypto allocation but didn't find it.
Have you already shared it?If so, can you please share it again or at least share one ALT project you are into (you mentionned Radix recently)? I understand it's not a finanial advise but it would help the community to compare with our own wallets.
Also, what is your thought with ETH overperforming BTC in the coming Bull Run?
Tips: could be a great option if in your letter for premium members you share your portfolio allocation.
Big Fan here Willy.
I had planned to subscribe in the coming weeks but the fact that I have to be a paid subscriber to post a question made me make the move. Awesome.
So, I have three short questions (i understand it's not financial advise by any mean).
1/ There are two models among the bitcoin community about the length of this cycle: some predict the BTC to follow the same pattern as the previous cycles in terms of length, with a BTC reaching 100K in 2021 (Plan B model).
Others see a lengthning cycle with a BTC reaching 100K more in 2023 based on the the-logarithmic-growth-curve.
https://medium.com/max-exchange/bitcoin-the-logarithmic-growth-curve-by-dave-the-wave-a2ef93b02df1
=> What is your position?
2/ Current price level is 15,5K. Based on where we are in the cycle, does it still exist a possibiliy for the BTC to pullback to 10-12K in the coming weeks/months?
After such an increase the past days/weeks + some of your data showing that we are in overbought territory, should we wait for a pullback to buy lower or agressively place market buy orders?
Thank you,
(1) LENGTHENING CYCLES
We are locked into 4 year cycles due to impulses from halvening supply shocks. The theory around lengthening cycles is based on curve fitting historical data without a strong thesis on the mechanism. We'll be in 4 year cycles until miners subsidy erodes to small enough that the supply shock becomes smaller than the gravitational pull from macro asset cycles (approx 10yrs). At that point macro markets will pull BTC into oscillation around that 10yr cycle. It'll be phase transition.
I mentioned some of this here: https://twitter.com/woonomic/status/1292386772370898946?s=20
(2) I don't think we'll go to 10k-12k, the floor is fast moving upwards, NVT Price model (organic valuation floor) says touching 12k would be a stretch. I personally think this consolidation window is the best time to get in before a further run upwards.
I simply would not place bets on visiting the 10k-12k zone again, in the bigger picture it's going for outside odds on a 20% discount for an asset signalling that its already started its 10x run.
As per this latest letter, this is either going to be a short consolidation (say 2-3 days) in a 2-stage pump, or it will be a longer 7+ days consolidation inside the $14.5k-$16k triangle that is starting to form.
Thank you, much much appreciate the reactivity of your answer.
awesome, Willy. Thank you for so deep answer!
Hi, Willy. I had the same doubt that Thibault asked at first. Isn't that possible that BTC is having longer up and down cycles and, at the same time, having the halving cycles as well? I did this humble sketch (https://www.tradingview.com/x/2DWGpq6q/) where, during the bear run after the peak, BTC could have its halving. It's different from the previously cycles so far because usually the halvings happen after the bear run. What do you think about it?
In my view of the charts, which of course focuses on what investors are doing on-chain, the end of bear cycles have always happened 9-12 months before the halvening. You can get a view of it by going to https://charts.woobull.com/bitcoin-price-models/ and turning off all the traces except NVT Price and Realised Price, these are valuations from investors, while the market price is subject to short term FOMO and FUD; and a healthy dose of trader manipulation.
If I was to take an educated guess (no data, nothing on-chain), the top of this bull market will be in Dec 2021, it's in this zone that the halvening supply shock transition has played out, completely spent, and the sell pressure from paying taxes on the 2021 profits come into play.
What could be a (range) price target at Dec 2021 Willy?
Willy are expecting the 100k$ btc Top end 2021??🤔
Since your "consolidation update", I still do not buy in yet, do you think at this current price, it is still good to deploy my new capital for middle and long term hodl? thanks
Hi, Woo. I'm really enjoying your forecast newsletter.
I read your latest tweet of RSI 365. It's unbelievably similar pattern, I agree.
I wonder if pattern repeats, would it mean we will see significant pullback toward the end of 2020 or early 2021? I'm looking forward final injection.
https://twitter.com/woonomic/status/1326570813491875840
Pull backs in RSI doesn't necessarily mean pull backs in price, a sideways band can normalise the RSI lower. That said, there are always pull backs on bull runs. I'd use NVT Price as a guide to see how overheated above organic price we are, gives you an idea of the room below price action to fall back to. I can't comment on timing of smallish macro events until such time as it shows up on-chain.
https://charts.woobull.com/bitcoin-price-models/
Thanks for insight
Willy, current NVT price shown on your chart is around 11500.
Current spot price is 16K.
Does it mean that we are overheated and a pull back is likely (or a least a long consolidation before the gap between NVT and spot prices reduces?).
Which would match the indication of a high RSI on the spot price + "fear and greed" sentiment very bullish (abve 90!).
Thanks
If we were in a bear market or say the sideways band of the first 9 months of this year, then I would say market price needs to come back near NVT Price. But in the history of bull markets, as we go deeper into them, we usually see market price premium above NVT price climb higher and higher as short term speculators get more FOMO.
In the bigger picture (straight up NVT Ratio) we are not overheated, deeply in the buy band. But sooner or later this short term rip from 10.5k will need to rest.
Thank you
$btc is now £17.2k, and RSI has remained overbought for ~15 days. Is a pullback near?
RSI can stay overbought Forever :)
Yes it can, but we both know it won't..
Thanks a lot Willy for the help with your answers 👍
Hei Willy, if you have some books or articles to recommend about crypto or risk management I would be gladfull. Thanks anyway for forecasts.:)
hey willy goat..
please help me with that one (my friend is losing his mind with this coin) and so do I :)
in the past you mentioned litecoin is oscillator (vs BTC) just like doge etc.. and not degen coin like ont for example..
what is your view on ltc? its one of the oldest alts still around.. does his history play a role and maybe some ogs still like ltc? do they see chikuns coin for multiply btc or not?
will ltc play a role in the future of cryptos?
Hey Buckets, love the handle.
LTC has historically been in orbit around BTC, yes, in that regard you can trade in and out of LTC within alt-seasons. The key thing is to know when to go in or out. I personally do TA on Bitcoin Dominance to get a read on it.
LTC being old has excellent Lindy Effect, meaning exchanges list it, wallets support it, traders love trading it; it's super liquid. With that in mind, it probably will stay an oscillator for a while longer. I only see it as a trade instrument, leverage futures is its biggest competitor. I mean you can use low leverage long or short futures positions on BTC for similar effect, once highly liquid DEXes with margin trading become available (private key secured, no custodial or counterparty risk), there's really no need for this category of alts.
If you mean is there is a far away future for LTC existing as a codebase, it has historically been a test bed for BTC codebase; that's useful. But by the shear numbers, if your are HODLing multi-cycle (4, 8, 12 years), you won't get alpha over Bitcoin and subject to higher risk. Best use it as a leverage trade instrument IMO.
Tnx a lot