Bitcoin. Sigue con peor comportamiento que las bolsas. Esperando algo que le saque del letargo.

Market Analysis of Cryptocurrencies

Introduction to Bitcoin Trading and Holding

• The discussion begins with an overview of the cryptocurrency market, focusing on Bitcoin trading and holding strategies, particularly in the context of El Salvador's experience.

• A new term "chiviar" emerges from the use of the Chivo wallet, highlighting a trend where users exchange between Bitcoin and dollars for small profits.

Challenges in Trading

• Many individuals engage in trading without adequate knowledge or time commitment, leading to emotional mismanagement during Bitcoin's volatility.

• This lack of preparation often results in losses that reinforce negative perceptions about Bitcoin's viability as an investment.

Benefits of Holding

• A smaller group understands Bitcoin as a long-term savings tool, opting for holding rather than trading, which has proven more beneficial.

• Statistics indicate that 90% of traders lose money while those who hold their investments tend to see gains if they understand the asset well.

Knowledge Requirements for Holding vs. Trading

• Unlike trading, which can be done without deep knowledge of the asset, holding requires understanding what one is investing in to anticipate future performance.

• Holding necessitates patience and a long-term perspective rather than constant price monitoring.

Current Market Trends

• The speaker notes current market conditions with a slight increase (0.92%) after a negative day for Bitcoin; however, it remains disconnected from broader market trends.

• There is skepticism regarding whether we are entering a bear market similar to past cycles; differences in current behavior suggest otherwise.

Predictions on Market Behavior

• The speaker believes that this phase will not follow traditional cycles; instead, there will be fluctuations independent of historical patterns.

• Future movements may include both rises and falls without adhering strictly to expected cyclical behaviors seen previously.

Conclusion on Market Dynamics

• Overall sentiment indicates that current dynamics differ significantly from past experiences; thus predictions based solely on historical data may lead to errors.

Market Dynamics and Altcoin Viability

Current Market Trends

• The speaker discusses the current market decline, emphasizing that this downturn is unprecedented compared to previous cycles.

• There is a slow and painful destruction of many altcoins, which has been ongoing for four years, with recoveries becoming less significant over time.

• The concept of "zombie" blockchains is introduced, where some networks will persist with minimal activity due to low maintenance costs.

Case Study: Bitcoin Cash

• An analogy is made comparing Bitcoin Cash to a large warehouse with very few items stored, illustrating its lack of competitive interest and activity.

• The emptiness of such altcoins reflects their inability to generate value or attract users, leading them to exist in a dormant state.

Future Outlook for Altcoins

• Many altcoins are expected to gradually fade away over the next 10 to 20 years while Bitcoin experiences fluctuations without cyclical patterns.

• As Bitcoin approaches the issuance limit of 21 million coins, its behavior in the market will change significantly.

Bitcoin's Correlation with Other Markets

Disconnection from Traditional Assets

• Currently, Bitcoin shows disconnection from broader market trends; reasons for this disconnect remain unclear.

• Speculation exists that capital may be diverted towards precious metals until those markets stabilize before returning focus to Bitcoin.

Misconceptions about Software Companies

• The speaker critiques claims that Bitcoin's performance correlates with software companies' struggles due to AI advancements.

• It’s argued that since Bitcoin does not sell software or services like these companies do, any correlation between their performance and Bitcoin's makes no logical sense.

Demand and Supply Factors

• A lack of demand coupled with miners needing to sell at lower prices contributes to current market conditions.

• This situation may lead non-profitable miners to shut down operations eventually, impacting supply dynamics in the long run.

Understanding Bitcoin Scarcity and Derivatives

The Nature of Bitcoin's Scarcity

• The discussion begins with the assertion that as competition increases among market participants, equilibrium will eventually be restored, leading to a reduction in supply and a subsequent recovery in Bitcoin prices.

• A common misconception is addressed regarding derivatives in Bitcoin; it is argued that these do not negate Bitcoin's inherent scarcity. The speaker emphasizes that while derivatives can influence price exposure, they do not affect the actual supply of Bitcoin.

• An analogy is drawn comparing Bitcoin to apples: regardless of how many futures contracts exist for apples, the physical number remains limited (21 apples). This illustrates that derivatives cannot create more of the underlying asset.

• The speaker reiterates that owning a derivative does not equate to owning the actual asset. To control one of the 21 million Bitcoins, one must own an authentic coin rather than just a derivative contract.

• It is emphasized that true value lies in holding actual Bitcoins, which are decentralized and controlled by individuals. Derivatives do not provide this level of control or ownership.

Misconceptions About Financial Products

• The argument continues by stating that financial products like derivatives do not diminish the limited nature of Bitcoin. Just as stocks have finite shares despite numerous financial instruments being available, so too does Bitcoin maintain its scarcity.

• The speaker critiques the notion that financial products can alter scarcity; he argues this logic would imply all assets are non-scarce due to existing derivatives.

• He further explains that tangible assets like gold also retain their value through physical ownership rather than through paper contracts or options.

Value Determination and Market Dynamics

• There are 21 million Bitcoins available for genuine ownership; only these coins can be transferred into personal wallets. Derivatives cannot replace this fundamental aspect of ownership.

• Authentic Bitcoins hold intrinsic value based on what users can do with them directly within their wallets, contrasting sharply with mere price exposure offered by derivatives.

• The speaker asserts it’s absurd to claim Bitcoin isn't finite because there are derivatives; real market dynamics depend on those who hold authentic Bitcoins and their willingness to sell at certain prices.

Price Manipulation and Market Control

• If holders of authentic Bitcoins decide not to sell at current prices, it could lead to significant price increases since market dynamics favor those who possess real coins over those trading in derivatives.

• There’s an acknowledgment of psychological manipulation where traders may feel pressured to sell at lower prices due to derivative influences but ultimately highlights that power resides with those holding real assets.

Current Market Behavior

• A brief update on recent market behavior indicates some recovery after negative trends were observed previously. Notably, there was a sudden spike in price without clear external factors influencing it during specific hours yesterday.

Market Behavior Analysis

Unusual Price Movements in Bitcoin

• A significant price increase occurred within a short span of 10 minutes, where Bitcoin surged from $67,300 to $68,300, indicating a large purchase by an unknown entity.

• The market exhibited strange behaviors with sudden accumulation followed by abrupt sell-offs, suggesting manipulation or strategic buying and selling patterns.

Accumulation Patterns

• There is speculation that buyers are accumulating Bitcoin at current levels but are allowing prices to drop intermittently to instill fear and encourage lower buy orders.

• The pattern of rapid price increases followed by drops indicates a strategy aimed at creating optimal buying conditions for larger players in the market.

Short-Term Market Outlook

• A bearish channel has formed on the hourly chart; breaking out above this channel could lead to a quick rise towards $71,500.

• Current oversold conditions suggest a potential rebound is imminent despite possible future declines; the market appears ready for a significant upward movement soon.

Weekly Candle Analysis

• The weekly candle's performance is crucial; closing with minimal loss or slight gains would indicate bullish sentiment moving into the next week.

• Conversely, if the week closes low, it may signal continued weakness in the market and further declines ahead.

Dominance and Altcoin Performance

• Bitcoin's dominance has decreased slightly to 58.69%, indicating altcoins have been performing relatively better recently without significant fear in the market.

• Notable altcoins like AV and Cardano show resilience while Ethereum struggles to recover losses from mid-February due to concerns over Vitalik Buterin's sales impacting confidence.

Market Analysis and Weekly Candle Insights

Current Market Behavior

• The market is currently showing signs of slight loosening, indicating a potential shift in momentum.

• Previously, there was an upward trend; however, the current state suggests a need for caution until certain conditions are met.

• The formation of enveloping candles in the area is crucial for determining future price movements.

• The weekly candle's closing will be pivotal; its outcome could lead to either a very positive week ahead or signal further challenges.