Transcription
Mel everybody, Cantonese cat here. I haven't done a video for a very long time. I don't have my usual setup, as I'm still traveling internationally. Don't have my mic available. So, if you don't like the audio quality, then just skip the video. If you like, then uh, keep listening in. I'm going to try to share some quick thoughts here with Bitcoin and a couple of proxies, if you will. MicroStrategy, Coinbase, and I'll use Marathon Digital Holdings (Mara) and CleanSpark as examples for the miners, which have completely lost favor from the retail community.
First of all, looking at Bitcoin, am I bearish or bullish here? I am bullish. But with that said, we are running into some problems here. First of all, we are still in the process of trying to reclaim the 20-week moving average, kind of like we did over here, right? You see how we look like we're going to reclaim it, but we end up just having a hard time holding on to it. So, we might still have a little bit of a battle over here. I don't know. But it's good to see that it's trying to reclaim the 20-week moving average. That is the first thing.
The second thing is if you're looking at the Gann fan that I have here on the weekly chart, that has been playing out extremely beautifully. You can see how this arc over here means something. This arc over here meant something. As it breaks out, it went to the next arc. As it breaks out, it went to the next arc. As it breaks out into the next arc. And when it has a hard time breaking through an arc, it basically tries to go back down here and try to find some support down here below. Looks like we have found some pretty decent demand down here in the $70,000s, right? And guess what? We have basically been trying to get back to the arc up here. And guess what? We're getting rejected here so far, right? Around [Music] $96,000 or so, give or take. That's going to be the level to watch, right? If we are not able to push through the arc, it is still resistance, and we could go down. But do I think that we're going to go down that much further? I don't think so.
Part of the reason why I don't think so is because I think that the momentum is now shifted towards the bulls. Because we look at the daily chart here, this whole thing right here, the downtrend over here was really on bullish divergence, and the bullish divergence is playing out. And so far, we have a little bit of a bull flag up here, right? As you can see, this downtrend over here was also on bullish divergence. And next thing you know, that was kind of the bottom over here, right? and we end up having another leg move up. Do we end up shooting up all the way up in a straight line? No. We end up having a lot of volatility on the way up, right? So, do I expect some volatility potentially with us getting rejected here at the horizontal zone and also the Gann fan arc? Could we, you know, expect some potential downward volatility before going up higher? It's possible. It's always entirely possible for it to back test $88,000 or maybe even lower before going up higher. Right?
Regardless, I think that the bullish divergence here is playing out. And if you also look at this daily Gann fan chart here, and I've been following this daily Gann fan chart here for months and months and months, it has been working out extremely beautifully. You can see how price action was just stuck between these two arcs over here for about half a year. We have broken above the arc. We have finally broken above the arc, and we are riding the angle resistance up here, a 45-degree angle. We're riding the angle on the way up, right? Could we come back down and back test the arc? Maybe even go back inside the arc here to the $88,000 zone before bullish continuation? That's entirely possible. But it's important to note that we have broken above this Gann fan arc here that has served as very beautiful resistance and support here for quite some time now.
If you're looking at the proxies here, you're trying to look at Bitcoin. You're like, okay, so it's looking more bullish. It's breaking out above. It's looking better and better. Should I use some kind of proxies to play Bitcoin? And what would be the best way to play Bitcoin? Everybody at this point is going to get programmed into looking at MicroStrategy's strategy. One more thing I want to show you is it's holding the 10-week EMA in here. As long as the price is holding the monthly 10-week EMA, it is bullish, right? Because you can see how in 2015-2017 it basically rode the 10-week EMA all the way up to the top, right? And even during this like mini bull cycle here from 2020 to, you know, 2021, it was riding the 10-week EMA all the way up to the top. When it came back down to the 10-week EMA, the red line, that's when things get a little bit tired, right? But so far, we've just been taking a stepwise approach on the 10-week EMA on the way up, and this actually looks like a pretty bullish setup because you have all these wicks down below, and this is a little bit more like a morning star look to it where you have a red candle, a little bit of a doji here, and a green candle. This is a bullish formation, right?
So, would you want to play MicroStrategy's strategy? Am I bullish on MicroStrategy's strategy? Yeah, I'm pretty bullish on MicroStrategy's strategy because it got rejected here at 1.618, when it closed, it again bounced off the arc level, came back down to 1.272, holding as support for many, many weeks, right? Nice wicks down below. Even touched the arc down here below. Initially, we had a hard time breaking above the 1.414 here on the first try, came back down, found energy, found demand here again at 1.272, and we're able to push through. So far, we have a weekly close above the 1.414. That to me means maybe for a bullish continuation up here. Maybe back test 1.414 first before going up. Who knows? Who knows which path it's going to go? But it does graphically point up to the next level if we are convincingly able to close above the 1.414, back to the 1.618 here, and we'll see how it reacts here at the arc. Right.
Is MicroStrategy the best play for Bitcoin? If you're bullish on Bitcoin, this is an extremely, extremely challenging question to answer. My answer is I don't think anybody really knows, right? Because if you're looking back in terms of what happened on the last cycle, MicroStrategy topped out in February 2021, right? and it has struggled to make any higher highs since then. Whereas Bitcoin made a higher high later on in November 2021, right? So MicroStrategy's strategy might have underperformed because it's like a very leveraged play for Bitcoin, and whenever it's getting close towards the end of the cycle, it might end up underperforming Bitcoin, right? At the early cycle, it might end up overperforming Bitcoin. In the late cycle, it might underperform Bitcoin, right? It's a very, very, very tough question to answer. But even the MicroStrategy chart right now, because it's broken back above the 10-week EMA indication here on the monthly, whereas last time it was underneath resistance here for almost a whole year. Right now, we're above, so it favors a bullish continuation. I am still going to be bullish on MicroStrategy until otherwise proven.
Right now, the question is, is MicroStrategy the best play for Bitcoin? If you're bullish on Bitcoin, a very, very tough question to answer. Let's compare MicroStrategy to Coinbase. It has outperformed Coinbase ever since January of 2022. There's no question. This is the weekly chart of MicroStrategy over Coinbase. This is a spread chart, right? A weekly chart. You can see that whenever you have an increase on this chart, that means MicroStrategy is outperforming Coinbase. And it has happened over here for quite some time on bearish divergence. And we end up having some relative underperformance of MicroStrategy over Coinbase here for almost a whole year until it picks up again. Right? So you can see that bearish divergence, downward trend, bearish divergence being built up here. Right? RSI is going down, and this spread is going up. Does it mean that we might end up having some rotation from MicroStrategy over to Coinbase? That's possible.
We're also going to look at another alternative thing here, including looking at MicroStrategy over Mara. Mara is underperforming MicroStrategy here for quite some time, right? Really ever since December of 2023. Significant underperformance against MicroStrategy here. So, you can see that it's going up on an ascending wedge here, which leans bearish. You can also see that this is happening on RSI going down. You're building up a lot of bearish divergence over here, and it might be unsustainable. But with that said, because it's forming higher highs and higher lows, it can keep going up for a long time. But because it's been building up a lot of bearish divergence in here for a very long time, I do wonder about the possibility of MicroStrategy maybe underperforming Mara at some point soon if the bearish divergence continues to build up.
Finally, I also want to show the bearish divergence has also been building up here with RSI for MicroStrategy over CleanSpark. Right? You can see how whenever you have a bearish divergence here, it ends up playing out here, right? We're building up a bearish divergence here again. So, it might end up playing out here again soon. We will see. I'm not saying that, you know, go all in with miners and all that. But it is interesting that right now the retail community are looking at MicroStrategy as the Bitcoin play. So, it does make you wonder what's going to happen next. I do not know the answer to all these questions. I'm just here showing charts and letting you know kind of what I'm seeing. Again, these bearish divergences can build up for a very, very long time, and you can have outperformance of MicroStrategy over Coinbase, Mara, or CleanSpark for a very long time. There's no guarantee, but I'm starting to see a little bit of exhaustion of MicroStrategy over the other potential, you know, Bitcoin proxies, if you will.
All right, guys. Take care. Bye.