9 Reasons Why by Charles Edwards

by James · February 28, 2023

Charles Edwards, a renowned analyst and founder of Capriole Investments, has outlined nine reasons why Bitcoin has been in another bull market since January in a new Twitter thread. Contrary to the growing voices that Bitcoin will plunge again, Edwards offers a bullish prediction.

The first reason is that Bitcoin has exited a multi-month period of low value, as defined by many on-chain metrics, including trading at its electrical price. Historically, this has been the global price floor for Bitcoin. The current bear market was the second longest period Bitcoin has spent on its electrical charge.

The second reason is the insanely fast recovery after the FTX crash. “We eclipsed the price collapse of a top 3 scam in human history in just 2 months,” Edwards said, further explaining that this proves there are very few marginal sellers left.

[A]nd the level of deep value was too much to sustain such cheap prices for long, regardless of such negative news and financial damage.

According to Edwards, it is also an important technical confirmation of the most important price level on the Bitcoin chart, the breakout above $20,000. The price is particularly important for five reasons at once: it is the all-time high of 2017, the FTX collapse price, a critical order block level, the limit of profitable mining and a psychologically important “round number.”

More reasons to be bullish on Bitcoin

The Capriole Investments founder also cites the recent massive short squeeze as a fourth reason for an end to the bear market. “We witnessed a 40% short squeeze with identical characteristics to the 2021 China mining ban Bitcoin price floor.”

Also, according to Edwards, the Bitcoin price has entered a new regime of upward momentum, which is confirmed by several long-term moving averages moving upwards. “Select, almost all daily averages are going up now,” Edwards said.

He also sees a reason for the Bitcoin halving, which he says will be “the most important halving of all time,” as BTC is poised to become the hardest asset in the world, overtaking gold as the best store of value in the world. The timing of the bottom formation was perfect, he said:

We are at optimal halving cycle timing where Bitcoin typically bottoms (Q4 2022 and Q1 2023). Like clockwork, Bitcoin has bottomed in the 12-18 month window before each halving in the past.

Moreover, Bitcoin has already reached its biggest pain point with a price discount of over 80%, he said. “At the end of 2022, sentiment was at its worst, and market hedging at its highest ever. When I tweeted in December, most key gauges of sentiment across crypto and stocks posted their worst or second-worst readings in history.”

Edwards concludes with perhaps the most central reason, although it is probably the most controversial. According to him, there will be a macroeconomic regime change as early as 2023. According to the analyst, the Fed will take a break on interest rates and change its policy, which will be massively bullish for Bitcoin.

The last point is particularly controversial because the market is currently pricing in a “higher for longer” interest rate policy from the US central bank after both the consumer price index (CPI) and the price index for personal consumption (PCE) came in much worse than expected.

As a result, at the time of writing, the Bitcoin price continues to struggle with its key support at $23,300.