Bitcoin Coils up Within a Range in Preparation for a Major Breakout!

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Coinmonks

6 min readMar 23, 2021

A total of $60 billion are now floating in US Dollar stablecoins, with USDT and USDC taking the lion’s share as the most widely used fiat-crypto assets in the industry. Meanwhile, decision time is fast approaching for bitcoin as it coils up into what could be an imminent explosive move.

Let’s dig in.

USDC tops $10 billion in supply for the first time ever

The USD Coin (USDC) supply has exceeded $10 billion for the first time, reaching 1/4th of Tether’s supply by market cap.

A recent stablecoin research report by the Block shows that CENTRE, a consortium founded between Coinbase and Circle, first issued USDC in September 2018, with an additional $45 million in funding secured to further develop the project.

Together, USDT and USDC make up the lion’s share of fiat-crypto assets and their adoption is accelerating apace with yield-driven financial products (offered by SwissBorg and others). By and large, USDC is used in North American time zones, while Tether continues to dominate the Asia-Pacific region.

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Technically speaking

BTC Breakout in 36 hours?

Bitcoin is consolidating within a narrowing range and will likely make a decisive move within the next 36 hours.

Per the below chart, price has traded above the Volume Weighted Average Price (VWAP) indicator, which is often used as a passive investment benchmark by traders and investors. Briefly, the VWAP is a measure of the average price at which an asset is traded over the trading horizon.

In addition to finding support above the VWAP, BTC/USD trades above the range point of control, denoted by the VPVR (Volume Profile). The point of control is the point at which the most amount of traded volume occurred, and it acts as an important support or resistance level which price tends to respect.

Additionally, various traders and analysts have pointed to a pennant structure on the 4-hour time-frame — whereby price prints symmetrical lower highs and higher lows as the structure matures.

This is technically a bullish pennant which normally suggests bullish continuation. In this case, BTC/USD would target $66,000 and above. Conversely, the less likelier scenario (per standard technical analysis) indicates a $49,000 price-tag upon confirmation of a breakdown.

Levels to watch

4-hour close above $58,417 suggests a move to $66,000 — $70,000.
4-hour close below $56,461 (or the daily EMA at $55,530) suggests a corrective move to $50,000 — $49,000.

Final thoughts

Various bullish and bearish arguments have made the rounds strongly advocating either scenario. However, the reality is that nobody knows the future, but one can prepare for whatever happens and have the conviction to follow through no matter what happens.

That said, on chain data continues to show that whale accumulation is still underway at these price levels, which means that multi-millionaires and billion-dollar funds want bitcoin and recognise its potential to seriously appreciate over time. In order for whales to continue accumulating bitcoin — they require that others sell. Once the big players are content with their portfolio allocation and entry price, then prices are more likely to trend higher.

Still, if bitcoin u-turns towards lower levels there’s a 100% probability that calls for a ‘new bear market’ with an ‘80% correction’ would become rampant. I don’t think for a minute that such calls would be warranted for the following reasons:

On-chain data, such as the Net Unrealised Profit/Loss chart has not overheated (this is one of several metrics like the mvrv-z score).
Bitcoin has not yet bounced off the 20-weekly Exponential Moving Average (EMA). Price will likely bounce off this level the first time it is tapped.
BTC balance on exchanges has continued to drop (i.e. on aggregate, whales are accumulating bitcoin and taking it off exchanges into private storage).
Institutions like Square and Tesla aren’t buying to sell a 10% move. They will hold onto bitcoin into the hundreds of thousands if not more because in the future they will own a piece of the world’s monetary protocol and store of value — the risk/reward is astronomical.
Ethereum has not gone parabolic yet, which adds further credence to the argument that this cycle is not over. Bearing in mind that ETH is the front-runner to becoming the base-layer of tomorrow’s financial markets.

I could go on. Some analysts will spew verbiage and create an entire word salad to basically tell you that prices will go up or down and stop there — but the reality is that a bad plan is better than no plan. If you have no plan your analysis is worth very little because in the heat of the moment you will behave like paper-handed plebs — and that’s not what we do here. We anticipate, plan and dominate.

As such, there is no reason to fret if prices trend lower. Now is the time to adjust risk exposure for both scenarios depending on your goals — having excess capital to buy lower or to capitalise on strength is never a bad idea in the long run.

Since the trend has not changed then higher prices are more likely (until they are not).

Bulls lead the way.

Catch you next time.

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