Bitcoinbig dump behind

Author: MacroScope

Compiled by: Liam

A brief explanation of the BTC sell-off and what to watch for next:

I have said before that during the gold bull market, Bitcoin’s performance should far exceed that of gold. However, it is important to note that when risk assets are impacted as they were last week, Bitcoin’s risk factor will drive its trend more than its long-term inflation hedging factor. However, its ‘fast horse’ relationship with gold remains unchanged. The price levels I mentioned in my tweet on February 19th are still valid. If BTC’s trading price rebounds to these levels (which are basically new highs), then we will usher in a new era of excellent performance of BTC relative to gold and other assets. The key word is ‘if’… this is not a prediction.

Understanding institutional mindset is very important. After the election on November 10, I posted a message: ‘The pullback in Bitcoin’s price may trigger a lot of buying. This situation has been ongoing for several months, but I believe it will intensify in the future. Many institutions are price-sensitive and will choose to wait and see when the momentum is strong, but they will actively participate in the bidding when the price reaches a level they can accept.’ Do you remember the 13F filings that showed a significant increase in holdings and new buyers (such as Middle Eastern sovereign wealth funds)? These filings were as of December 31, so all of these purchases occurred in October, November, and December. Last week’s drop in Bitcoin brought us back to mid-November price levels, and most of the 13F purchases occurred during that period. Many price-sensitive buyers are active again. Sovereign wealth funds will not buy heavily for losses or small gains a few months later. Unless his investment thesis changes, Paul Tudor Jones will not let IBIT become the largest stock/ETF position in his entire portfolio (according to the latest 13F filing, he did do so), but only to exit shortly thereafter. These buyers live at a certain level and like to enter liquidity. We will learn more in the next round of 13F filings.

It is important to closely monitor DC. It is understandable to feel frustrated by the slow progress of the BTC reserve strategy, but this is wrong. Remember, Trump’s executive order on January 23 set a deadline of 180 days for the working group to submit the national reserve report. This means by the end of July at the latest (or possibly earlier). Traders will begin to anticipate this report in the coming months.

Trump has always defined his presidency by the performance of the stock market. BTC is now obviously also a part of self-assessment. If the price remains weak before the working group submits the report, it is expected that Trump will make a statement in support of BTC, and may even take unilateral action or announcement. Traders, especially bears, should understand that this situation could happen at any time.

5 The Lummis Bill proposes large-scale purchase of Bitcoin in the United States. I have said that if the bill (or similar initiatives) is passed, the price of Bitcoin may soar to six figures or even higher. But even if the bill is not passed, does anyone really think that the only country that has recently started buying Bitcoin is a country that must be disclosed through 13F?

6 Finally, please remember the wise position management I mentioned earlier. This is crucial for both investors and traders. If anyone is concerned about this sell-off, it means they need to reassess their position size. After the election on November 10th, I stated the following: ‘It will be more important than ever to stay conservative to avoid being eliminated from the significantly changed long-term market.’ We feel sorry for leveraged traders and speculators.