Why Bitcoin’s Future Looks Like a Comedic Tragedy: Traders Laugh, Bears Weep!

by

In the ever-evolving theater of digital currency, Bitcoin [BTC] has once again captured the attention of curious onlookers, as noted by the analytics platform Alphractal on X. The long/short ratio has risen like a loaf of bread left unattended, tempting traders to embark on their long journeys.

This rising interest is not surprising; however, the long/short ratio has been elevated for what feels like an eternity. When BTC’s long/short ratio finds itself loftier than that of the altcoins, it certainly sends a message-“Buy me!” But alas, this time the call to arms seems more like a gentle suggestion from a friend who forgot to take their medication.

Joao Wedson, the founder and CEO of our trusty analytics platform, suggests that the presence of leveraged traders might be akin to a group of clumsy dancers at a wedding-hindered attempts at recovery are their specialty.

Will we see a recovery or a Bitcoin bear market?

Axel Adler Jr has laid out the criteria for a possible trend reversal in Bitcoin’s chaotic dance. The first trigger involves Bitcoin’s supply in profit, which peaked at a respectable 19 million BTC in October, only to plummet to less than 13.5 million BTC now. A classic tale of riches turned to rags! 🥲

The difference between the 30-day and 90-day simple moving averages (SMA) of supply in profit stands at 1.75 million BTC, reminiscent of 2022 when the bear market wrapped its cold claws around the unsuspecting bulls. To avert such a fate, the BTC bulls must maintain prices within the current range to keep the supply in profit above the 30SMA. It’s a tightrope walk worthy of the circus! 🎪

Our analyst friend has noted that this 1.75 million BTC gap is narrowing by 28k BTC each day. Should these dynamics persist, we might just witness a bullish cross predicted for late February or early March-if only the stars align and Bitcoin prices stay above $75k-$80k in January.

Examining the Bitcoin price action similarities across cycles

In the year of our Lord 2021, Bitcoin’s weekly structure took a turn for the bearish, signaling a long-term trend shift, much like a melodrama where the protagonist meets an untimely demise. A brief bounce to the 50-week MA was observed before the bear market claimed its next victim.

Once again, we find ourselves in a similar scenario, where a weekly bearish structure shift precedes a plunge below the moving averages. One might wonder if we’ll see a bounce to the $101k-$103k resistance zone, only to have the bear market snatch it away like a mischievous child taking candy from a baby.

If BTC were to fall and linger below $75k in January, the bear market might just tighten its grip. Oh, the irony! 🐻

Final Thoughts

  • The prolonged elevated long/short ratio was an anomaly-a hopeful whisper that met with silence, like a comedian telling jokes to an empty room.
  • If Bitcoin manages to hold above the $75k-$80k range in January, we might just conclude that the recent volatility was a rather violent reset, ushering in a larger bull cycle. Or perhaps, just another act in this tragicomedy!

Read More

2025-12-31 16:21