Goodbye, Sadtember. Hello, Uptober. Time to Buckle Up for Bitcoin Q4.

S&P 500 is falling. China’s real estate market is in turmoil. Oh, and China banned Bitcoin and crypto again. There certainly has been no shortage of bad news. I bet many investors got spooked and left the market. But I’m not one of them, at least not yet. Now that September has fulfilled its destiny of being a red month, it’s time to party. Here’s my outlook for the next few months.

First things first, Bitcoin showed resilience by holding above $40,000. I tweeted the below saying we might see one last nasty wick down to $38,000 or even lower. I was short-term bearish because Bitcoin was trapped in a descending channel and a descending triangle in a 4-hour time frame. Also because, historically, Bitcoin tends to follow what the stock market does.

Not this time. The drop didn’t happen despite the continued weakness in S&P 500 or the China ban. Instead, Bitcoin broke out of both bearish formations and is already above $47,000. This is a true testament to the conviction of long-term Bitcoin holders who defend these important support levels and are not willing to capitulate at current prices. Bitcoin showing strength when pretty much everything else is showing weakness is quite amazing.

In terms of the specific next steps, I expect major resistance at $48,000 ~ $48,200 (which we kinda are already). It might take some time to break and close above it. But once we do that and flip this resistance into support, we should climb quickly to $60,000. That’s my minimum price target for the end of October. It may seem ambitious but it’s only a 27% increase from where we are now. Remember that we’re in crypto. It’s like stocks on steroids and in fast-forward mode.

I’m always long-term bullish on crypto but will be extra bullish when Bitcoin breaks above $48,000 and just hangs out in the $50,000 range. That will be the strongest proof that invalidates two things. First, the dead cat bounce scenario I covered a few weeks ago. The more time we spend in that range, the weaker the bearish hypothesis becomes. And if it gets invalidated, people will be FOMOing in at higher prices.

Second, continuing the current momentum will disprove those who believe that we’re in the “Return to Normal” phase. There’s certainly evidence for both sides, but my bet is on a strong Q4 performance because I believe we’re exiting the “Bear Trap” phase now. I see the crash from $65,000 to $29,000 in May as the first sell-off and we’re about to prove the bears wrong. Winter is coming. Bears had better be ready for hibernation.

Why so bullish you ask? I’ve got four main reasons.

1) Bitcoin Monthly Performance: History has shown that October, November and December are some of the strongest months for ROI. A bullish winter usually follows a summer lull. And I like to stand by the words of Mark Twain. History doesn't repeat itself, but it often rhymes. (Credits to @CryptoMichNL)

2) We’re Back Above the 21 EMA: The 21-Week Exponential Moving Average is widely regarded as an important indicator for Bitcoin’s market sentiment. If the price is above it, bull market. If below, bear. We’re not cleanly above it as Bitcoin’s still fighting to hold against heavy bearish sentiment. Precisely why I choose to go against the herd. We’ll see.

3) Missing the Final Elliott Wave: The Elliott Wave Theory claims that the impulsive phase is made up of five waves and the corrective phase is made up of three waves (the dead cat bounce plays by this rule also). The final leg up is missing and I believe it will happen in Q4 and peak by the end of the year or early 2022. I don’t know how aggressive the slope is going to be. But I do know that Bitcoin loves to defy expectations. I’m expecting to see something close to the trajectory of A.

4) Bullish Macro News: El Salvador is not only enabling financial inclusion and freedom for its people but also mining Bitcoin with volcanic energy (man, like this is super awesome). SEC Chair Gary Gensler is about to review multiple filings for Bitcoin ETFs. Big banks and companies have been jumping into crypto one after the other. Ukraine legalized Bitcoin and Dubai wants to be a crypto hub. And just yesterday, Fed Chair Jerome Powell said the U.S. has no intention to ban Bitcoin and crypto (though there will be regulations, which is a good thing for mass adoption). Things are evolving fast and I’m excited.

That said, I just need one more thing to be even more bullish than I already am. I want China to ban Bitcoin and crypto again, as they’ve done like a dozen times for the past decade. Because whatever they ban (usually things that stand for freedom and give people convenient access to knowledge & services) end up performing well. It would be smart for the U.S. to continue welcoming innovation and be a leader in the emerging crypto space.

Thanks for reading and see you in the next one.