Today’s headlines:
- $BTC rallies above $100k on the eve of Trump’s inauguration.
- Trump takes credit for bitcoin all-time-highs: ‘The Trump effect’
- State of Wyoming presents strategic Bitcoin Reserve bill.
- Coinbase restarts bitcoin-backed loans.
- Coinbase CEO Brian Armstrong advocates for US Strategic Bitcoin Reserve.
Over the past two weeks, $BTC has been moving through the range we highlighted in the 6 January edition of the Weekly Alpha. We noted in that edition that Bitcoin would likely need to spend time in the range for a couple of weeks.
Those two weeks have now passed, and right on cue, $BTC is breaking out of the range.
Figure 1: $BTC now breaking out of the range.
Price is currently retesting the top of the range and bouncing from it. This is very bullish and we may well see $BTC start to rally up over the coming weeks.
The Big Story
Day 1 Announcements?
The main story right now is around Trump’s inauguration and his pro-Bitcoin and crypto policies that are likely to be rolled out soon after he comes into office.
As we write this newsletter, $BTC is beginning to rally hard. This is likely in anticipation (or based on known information) about what Trump may announce soon after his inauguration later today.
Figure 2: Price rallying on low time frames.
Over the past hour, $BTC has rallied +5.26%. Most of those gains have come in the last 20 minutes.
The market is anticipating some very positive news to be announced for Bitcoin by Trump and his team.
Shock to the system
We may be about to experience a shock to the system, as in recent weeks, we have seen a slowdown in the selling of bitcoin from long-term holders.
This can be seen in the rounding out of the orange line in the chart below, which shows the percentage of bitcoin that has not moved onchain for over 1-year.
Figure 3: +1yr HODL Wave is now rounding out as selling slows.
If we also start to see a fresh surge in demand, which would show up on the chart below, then this combination of restricted supply and increased demand will rapidly send price higher.
The red zone in this chart shows the realized value of bitcoin in relatively new addresses. Addresses that have held bitcoin for less than a month. When this new money piles into the market, it pushes price significantly higher - as we have seen in previous cycles.
Figure 4:Proportion of Realized Capital in addresses that have held $BTC for <1 month.
Is Trump about to make announcements that will bring this new capital flooding in?
Key Chart
NEW CHART - Bitcoin Seasonality
Figure 5: Bitcoin Seasonality
This is one of our new charts on the Bitcoin Magazine Pro platform. It shows the historical average monthly returns of Bitcoin since December 2010.
With 14 years of data, it throws up some interesting insights.
- November is the standout month for Bitcoin historically.
- June, August, and September tend to be weaker months - potentially due to summer holidays, with markets trading less.
- February and March are typically strong months.
With big announcements like the potential Bitcoin Strategic Reserve on the horizon, we may see this repeat in February and March of 2025.
Bitcoin Magazine Pro platform subscribers can view this chart in the Portfolio Tools section of the platform.
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The Bitcoin Magazine Pro Team.