Optimistic? Maybe we should be pessimistic!
2024-09-30

At this moment, I’m long Bitcoin, just like many others out there who are hoping for the next all-time high.
The dream of Bitcoin breaking its historical peak is alive, but there’s this lingering question I can’t ignore:  what if it doesn’t happen?

It’s worth considering a scenario that no one really talks about — what if Bitcoin doesn't break out to new highs and  instead stays in a range between 50k and 70k for the next few years?
We've seen this play out before in other markets.   Take gold, for example,  between 2020 and 2024.   After its big run-up, it stayed in a range,  teasing breakouts but taking years before finally breaking through its previous all-time high.

What If Bitcoin Enters a Prolonged Range?

The idea that Bitcoin might simply range trade between key levels for a long period is not that far-fetched.   The fact  that we now have Bitcoin ETFs isn't necessarily a bullish argument.   After all, ETFs exist for gold too,  and that didn’t prevent gold from ranging for several years.

Similarly,  the argument that institutional investors are buying Bitcoin also isn’t a guarantee of a breakout.   Big players have  been accumulating gold for years, and yet, the price didn't explode immediately.   Instead,  it moved in a sideways range, frustrating long term bulls, until it was ready for a sustained move.

The Danger of Fake Breakouts

Bitcoin is notorious for its spike-like moves that give traders hope of a breakout,  only to reverse in the opposite direction shortly after.   It’s entirely possible that in the coming months or years,  we could see multiple fake breakouts to the upside, triggering excitement that "this is it,"  only for Bitcoin to quickly retrace, leaving traders caught off-guard.
The same thing could happen with downward spikes that make people think the bull market is over,  only for Bitcoin to bounce back into its range.

Final Thoughts

Bitcoin’s potential to enter a prolonged range, despite the ETF and institutional buying,  is a real possibility.   The key takeaway is that traders and investors should be prepared for both scenarios:  the explosive breakout everyone hopes for,  but also the chance that Bitcoin could just as easily trade sideways for years, keeping everyone guessing.

As always, the market will do what it wants, and our job as traders is to remain adaptable, keep emotions in check,  and make the best decisions based on what we see, not just what we hope for.

Good luck to you. Good luck to us