Bitcoin, Fed, Stocks and Bonds

Bitcoin, Fed, Stocks and Bonds

Bitcoin, the plan, and its execution

The Plan:

It is an election year when Democrats will project political pressure upon the Federal Reserve to not risk through aggressive policy changes a stock market collapse to keep their votes. As a result, more money printing expands inflation, which supports the interest for bitcoin as an inflation hedge. Should we see in opposition for whatever reason a rapid stock market decline, the investor would unlikely be interested in owning stock or bonds. While initially, bitcoin prices would likely fall alongside the markets, money will likely flow into bitcoin shortly afterward.

February 1st, 2022, Crypto Chartbook - 1

The execution:

With bitcoins prices suppressed from their recent decline (down 52% from its last all-time high at around US$69,000), we have another edge for minimizing exposure risk.

BTC in US-Dollar, monthly chart, high likely turning points:

February 1st, 2022, Crypto Chartbook - 2

Bitcoin in US-Dollar, monthly chart as of January 31st, 2022.

The chart above depicts five supply zones we have our eye on. We will try identifying low-risk entry points on smaller time frames at or near these points and reduce risk further with our quad exit strategy.

We already had entries near zone 1 and 2 and posted those live in our free Telegram channel.

February 1st, 2022, Crypto Chartbook - 3

BTC in US-Dollar, weekly chart, bitcoin, the plan, and its execution, reload trading:

February 1st, 2022, Crypto Chartbook - 4

Bitcoin in US-Dollar, weekly chart as of February 1st, 2022.

Once the more significant time frame turning point is identified (white arrow), we will add what we call ‘reload’ trades (see chart above) on the smaller weekly time frame.

We do so by identifying low-risk entries in congestion zones (yellow boxes) on the way up. We aim to arrive near the elections in November with a sizable position that is due to our exit strategy being risk-free. Playing with the market’s money will allow for positive execution psychology and ease us to observe our position through an expected volatility period, with further profit-taking into possible volatile upswings that are only temporary in nature.

BTC in US-Dollar, Quarterly Chart, long-term profit potential:

February 1st, 2022, Crypto Chartbook - 5

Bitcoin in US-Dollar, quarterly chart as of February 1st, 2022.

While this year’s midterm trading on the long side of the bitcoin market could provide for substantial income from the 50% profit-taking of each individual trade and reload based on our quad exit strategy, the real goal is to have a remaining position size that could potentially go to unfathomable heights, since we see in the long term the inflation problem not going away but rather culminating in a bitcoin rise that could be substantially much larger in percentage than alternative inflation hedges like real estate, gold, silver and alike. Not to say that we find it also essential to hold these asset classes for wealth preservation.

The quarterly chart above illustrates the potential of such a position. We illustrated both in time (six years) and price (US$ 134,000) our most conservative model in this chart.

Bitcoin, the plan, and its execution:

We see no scenario where inflation is just going away. The above narrative shows that a short-term fueling of inflation is likely. Furthermore, a high-risk scenario is fueling inflation even more. Should markets decline rapidly, it can be expected that money printing and buying up the market is the most predominant solution applied. Consequently, the average investor would wake up relieved that prices wouldn’t decline any further but liquidating their holdings in a further inflated fiat currency will have massively decreased purchasing power.

February 1st, 2022, Crypto Chartbook - 6

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Disclosure: This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.

By Korbinian Koller|February 1st, 2022|Tags: BitcoinBitcoin bounceBitcoin bullishbitcoin consolidationcrypto analysisCrypto Bullcrypto chartbookDeFilow riskquad exittechnical analysistrading education|0 Comments

About the Author: Korbinian Koller

February 1st, 2022, Crypto Chartbook - 7

Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

Korbinian Koller

Korbinian Koller

Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent.Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.