Bitcoin (BTC)

• The podcast discusses how the significance of certain technical indicators for Bitcoin has changed over time due to increasing volatility.
• 20-week Simple Moving Average (SMA):
  • Historically, from 2016 to early 2018, dips to the 20-week SMA were considered reliable buying opportunities.
  • This indicator became less reliable starting in 2021. The speaker notes getting "caught aggressively" by selling when the price dropped below this level in May 2021, only for Bitcoin to recover and continue its bull run.
  • In the current market (last two years), the 20-week SMA is no longer seen as the "bottom line" for a bull market. Instead, when Bitcoin's price reaches this level, it tends to signal the beginning of a "choppy period" with sideways price movement, not the end of the uptrend.
• 50-week Simple Moving Average (SMA):
  • As Bitcoin became more volatile, the 50-week SMA emerged as a more significant support level.
  • When the 20-week SMA failed as support in May 2021, the price found its bottom at the 50-week SMA.
  • The speaker suggests that due to higher volatility, the new "bottom line" for support in a bull market has shifted from the 20-week to the 50-week SMA.
  • During the 2022 bear market, this level acted as a major resistance point.

Takeaways

• Rethink Old Strategies: The long-standing strategy of buying Bitcoin every time it dips to the 20-week SMA is no longer as reliable as it was in past cycles. Relying solely on this indicator could lead to premature selling.
• Watch for Choppy Markets: A drop to the 20-week SMA in the current environment may indicate that the market is entering a period of consolidation or sideways trading, rather than a major crash or the end of a bull run.
• Identify New Support Levels: Due to increased volatility, the 50-week SMA has become a more critical long-term support level to watch during bull markets. This could be a more relevant area for investors to consider as a potential "buy the dip" zone.
• Adapt to Market Changes: The key insight is that market dynamics evolve. What worked in the 2017 bull run did not work the same way in 2021, highlighting the need for investors to adapt their strategies and not rely blindly on historical patterns.