/r/BitcoinMarkets
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We reached all-time high before the halving then piddled around for seven months after. Why? I’ve got reasons. Butt-pulled reasons, but they are reasons.
This assumes halvings mean something. It also assumes exogenous factors like the 2020 money printing bonanza, 2021 China mining ban, and 2024 ETF approval affect the price as well.
The 2020 halving happened on 5/11/20. Bitcoin reached a new all time high 219 days later on 12/16/20. It then continued upward until the China ban.
In 2024, the Bitcoin price was $42,853 on the day the ETFs launched. It piddled around for a bit then rocketed into the fifth dimension in February going past ATH before the halving. This was because of the ETFs. THEN, that ran out of steam. It stopped propelling the price into the stratosphere.
The price fell and rose and fell and rose and piddled around prompting people to declare the #58KGang. The ETFs were enough to keep it above the level it should have been without the ETFs, but they weren’t powerful enough to rocket it anymore. If there were no ETFs, Bitcoin would have gradually gone from $42,853 to ~$64K today with normal Bitcoin variance.
It’s now 183 days after the 2024 halving. It will be 219 days on 11/24/24. We can expect choppiness until approximately then at which point Bitcoin will resume its upward trajectory.
Or the hypothesis is malarkey. I said it was butt-pulled. But it did occur to me.
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I am looking into using leverage for swing trading. I am still new to this and won't consider actually leverage trading before I better understand it, don't worry.
Here's a scenario. I hold 1 BTC and I will use 2x leverage (which is the maximum I am comfortable with for swing trading given its corresponding liquidation price). To simplify I won't include fees in my calculations. I close out the trade after each theoretical price increase and use the profits to buy BTC.
Scenario 1: BTC doubles in price, and I will have 1.5 BTC instead of 1 BTC (if I just held my BTC).
Scenario 2: BTC triples in price, and I will have 1.66 BTC instead of 1 BTC.
Scenario 3: BTC quadruples in price, and I will have 1.75 BTC instead of 1 BTC.
Meanwhile, in fiat terms I will have made 1, 2 or 3 times (in scenarios 1 to 3, respectively) my inital btc investment (in USD) in profits. But I do not want fiat, I want Bitcoin. so for accumulating Bitcoin it is markedly less interesting than for making fiat gains. So it would make sense for me to only use this strategy if I invest the profits in something else than the underlying asset, like the stock market for instance.
I am all-in on crypto and it would be good for me to diversify by investing in the stock market. In this case I think 2x leverage swing trading would be attractive, trying to exit at 2-3x current market price. But it is a lot less attractive reinvesting the profits into the underlying asset, BTC, given the diminishing returns.
Please let me know if my analysis has been sound thus or if I am missing something. I would not be comfortable increasing my liquidation price as the BTC price goes up.
Edit: the more I think about it, the more answers I think I am getting. Diminishing returns doesn't have to be a problem as long as Bitcoin outpaces, say the stock market, by roughly 2.5x (quick math). Given year on year historical growth records one would predict it will outpace the stock market by a far greater ratio so, actually, investing the leverage trade gains into Bitcoin will still be better than investing it into an asset like stocks.
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