Some musings on BTC's bullish activity...

Obviously anyone who's been in this space for more than a couple of weeks knows that bitcoin is a highly volatile asset (not to mention alt coins which I do have some thoughts on too) that can often seem completely unpredictable when it comes to price action.

I've seen a few people say that they don't understand where this bullish action is coming from and are wondering if it's a bull trap.

While I'm not claiming here to know exactly how BTC's price will play out (nobody could possibly know that), I will say that I do believe that the massive upward trend we are seeing is legit, and outline a few main reasons why:

1. After basically two straight years of raising rates, most economic analysts agree that the Fed appears to be done raising rates in response to persistent inflation throughout '21/'22. In fact, some are even forecasting potential rate cuts in '24 to help the economy achieve their "soft landing". CNN article to show I'm not talking out of my ass

   This is a big deal for the crypto space for obvious reasons. A less restrictive cash supply allows actors to take on more higher risk assets. A lot of the downward price action that can be observed on BTC (that was not related to an exchange going under) can be traced to the Fed being hawkish on rates. It's not hard to see how a change in policy there is bullish for BTC.

2. The stock market just had one of its best months ever. 8.9% growth in the S&P is no joke, and it further expresses the sentiment that people are, on the whole, becoming more bullish on the economy. Even though in the last year or so the infamous correlation between BTC and the stock market has pretty much gone away, it's still encouraging to see the economic situation as a whole improve.

3. Kind of an addition to #2, but the improving economic situation alongside massive institutional interest with multiple ETFs being filed for. Even though it's by no means a sure thing that anything ultimately does get approved, it's extremely encouraging (that is, if you mostly care about price action) to see all of this institutional interest in the crypto markets.

   During the last bull run, most institutions downplayed the meteoric rise of BTC and everything you saw in the media about crypto markets that didn't specifically cater to crypto basically advised people to stay away from the market. If you have the backing of giants like Blackrock (even though I think they're pretty much scum), I guarantee you the media narratives around the crypto market look a lot friendlier. It also just allows a lot more avenues for adoption. Even if the ETFs got rejected, the institutional interest is clear this time around.

4. BTC dominance is up 36% this year and continues to rise. This is bullish for the market at large as generally speaking BTC dominance has historically made a massive jump at the beginning of bull runs and then cooled off as money starts to flow into alt projects once the market stabilizes. Currently we're at around 55% dominance, so I'd expect that number to go up a bit more until things stabilize and then we'll see cash flow around to other projects and alts.

5. This is kind of the more miscellaneous section, but we have things like BTC halving coming up and the Ukrainian war appearing to be nearly over that just give more support to the positive environment that the crypto market finds itself in. On the halving side, you're getting a guaranteed decrease in supply when it happens. Whether or not that's already "priced in" is impossible to say but the fact remains that at some point in the near future, we will have a situation where it will become twice as hard as it is now to mine a bitcoin. You don't need to be an economics expert to see why that's a positive for price movement.

   As for the Ukrainian war thing, I know that it's basically because another "war" has taken its place, and I'm not going to comment politically on any of it (not the purpose of this post), however the war taking its place is much less likely to destabilize the world economy. It's not really global superpowers going at it anymore, so there's much less risk when it comes to global turmoil.

All of this is to say that, on the whole, there are a lot of positive indicators economically and politically that, to me, make the beginnings of this bull run look very legit. Now, that doesn't mean there won't be some corrections or retracing as BTC makes its move upward. BTC is a volatile asset, and I don't see that changing any time soon. However, we are entering an economic landscape that seems like it will be very accommodating for the crypto market.

Anyway those are my thoughts, happy to hear any opposing viewpoints/things I might be overlooking. At the end of the day I'm sticking to my DCA strategy and have implemented some limit orders to ensure that I take some profit if/when that does happen.