$BTC: WHAT HAPPENS NEXT
1/ @filbfilb called BTC’s bear market bottom 12 months in advance — before the bull market even finished!
His words on Dec 4, 2017: “I would lean towards 3k”.
His take on what comes next (and why) is fascinating.
tradingview.com/chart/BLX/1o5t…
1/ @filbfilb called BTC’s bear market bottom 12 months in advance — before the bull market even finished!
His words on Dec 4, 2017: “I would lean towards 3k”.
His take on what comes next (and why) is fascinating.
tradingview.com/chart/BLX/1o5t…
2/ First: how was @filbfilb so on-point?
He focused on one metric: estimated cost of mining production.
He layed it all out in March, 2018: est. cost of production's price range bottoms out at $3170.
9 months later, $BTC bottomed out at $3148.
tradingview.com/chart/BTCUSD/3…
He focused on one metric: estimated cost of mining production.
He layed it all out in March, 2018: est. cost of production's price range bottoms out at $3170.
9 months later, $BTC bottomed out at $3148.
tradingview.com/chart/BTCUSD/3…
3/ Why is production so relevant?
Miners are natural sellers — they drive supply more than anyone else.
But their incentive to sell vanishes below the cost of production.
Institutions and smart money knew it, and were ready. Retail was mostly unaware.
Miners are natural sellers — they drive supply more than anyone else.
But their incentive to sell vanishes below the cost of production.
Institutions and smart money knew it, and were ready. Retail was mostly unaware.
4/ Don’t take it from me, or @filbfilb.
Take it from Satoshi, in 2010: “the price of any commodity tends to gravitate toward the product cost."
Take it from Satoshi, in 2010: “the price of any commodity tends to gravitate toward the product cost."
5/ $BTC's bottom doesn't *have* to track mining's production cost floor.
But it did.
Just like it did in 2015, the last time BTC hit bottom.
I had a hard time finding more historic production cost data -- LMK if you know where to find some.
But it did.
Just like it did in 2015, the last time BTC hit bottom.
I had a hard time finding more historic production cost data -- LMK if you know where to find some.
6/ Here's my suspicion:
$BTC's logarithmic channel bottom *is* a rolling average of mining's production cost floor.
I can't prove this, my sample size is too small, and I'm wide open to being proven wrong.
But the data we have tells a very specific story.
$BTC's logarithmic channel bottom *is* a rolling average of mining's production cost floor.
I can't prove this, my sample size is too small, and I'm wide open to being proven wrong.
But the data we have tells a very specific story.
7/ It’s been 9 months since we bottomed, and miner's nominal production cost hasn’t changed much.
But Bitmain & friends aren't fools, they know the block reward will halve in May.
That's priced into their bottom line by now.
But Bitmain & friends aren't fools, they know the block reward will halve in May.
That's priced into their bottom line by now.
8/ Production cost doubles when the block reward halves. That makes $6340 the new floor.
Smart money knows it, again. Retail has no clue, again.
(Lots of longs in the right place, for the wrong reasons).
tradingview.com/chart/BTCUSD/O…
Smart money knows it, again. Retail has no clue, again.
(Lots of longs in the right place, for the wrong reasons).
tradingview.com/chart/BTCUSD/O…
9/ That doesn’t mean price will reach the $6400 region — but @filbfilb makes a case for it.
Big miners have incentive to drive $BTC price back to its production cost.
They’d love to dish out max pain one more time before the bull market steamrolls forward out of control.
Big miners have incentive to drive $BTC price back to its production cost.
They’d love to dish out max pain one more time before the bull market steamrolls forward out of control.
10/ Why? Low prices drive less efficient competitors out of business — one miner's capitulation is another man's market share.
11/ That’s @filbfilb's take. Here’s mine:
Every bull market is preceded by a terminal shakeout.
It’s a spring — one last higher timeframe stop run before the parabolic advance gets started.
Every bull market is preceded by a terminal shakeout.
It’s a spring — one last higher timeframe stop run before the parabolic advance gets started.
12/ Last cycle the terminal shakeout preceded BTC's accumulation range breakout.
We never got one this time.
I think we’re in the process of getting it now, and I think it’s healthy for the bull longterm.
We never got one this time.
I think we’re in the process of getting it now, and I think it’s healthy for the bull longterm.
13/ I think this is the last time we'll ever see $BTC below $10k.
But I also think we need to revisit liquidity in last year’s Eternal Range before we can make a run at ATHs.
But I also think we need to revisit liquidity in last year’s Eternal Range before we can make a run at ATHs.
14/ The longer prices stay low, the more inefficient mining operations go under.
The more weak hands who bought above $10k get shaken out.
The $6400 region could get frontrun.
But a long bottoming process (measured in months) is just as likely. Or both.
The more weak hands who bought above $10k get shaken out.
The $6400 region could get frontrun.
But a long bottoming process (measured in months) is just as likely. Or both.
15/ Institutions, hedge funds & state actors would love to re-accumulate at those levels.
Their incentives align with Big Mining. For now.
Their incentives align with Big Mining. For now.
16/ @filbfilb thinks a pullback to resistance around $9500 is a possibility.
IMO it could be a nice opportunity to hedge short. Or sell spot & rebuy lower.
(Be careful -- never go all out, or all in.)
A daily close above $10k invalidates this IMO.
IMO it could be a nice opportunity to hedge short. Or sell spot & rebuy lower.
(Be careful -- never go all out, or all in.)
A daily close above $10k invalidates this IMO.
17/ If you’ve been waiting patiently to buy $BTC, $6400 - $7500 is a great buyzone.
If we get there, the drop could happen fast.
Doubt might creep in. This happens by design.
Scarce asset ownership is a zero-sum game -- you might not get a second chance at sub-7k prices.
If we get there, the drop could happen fast.
Doubt might creep in. This happens by design.
Scarce asset ownership is a zero-sum game -- you might not get a second chance at sub-7k prices.
18/ If none of this happens, it’s bullish for $BTC.
If all of it happens, it’s just another guidepost along our path through BTC’s market cycle.
Either way I’m super bullish.
And your patience will *so* be rewarded. 👊
@filbfilb's free newsletter: decentrader.com
If all of it happens, it’s just another guidepost along our path through BTC’s market cycle.
Either way I’m super bullish.
And your patience will *so* be rewarded. 👊
@filbfilb's free newsletter: decentrader.com
