Bitcoin: Will It Take Another Leg Up?
The question everyone is asking right now is, "what is Bitcoin going to do next?"
The truth is, nobody knows. But, we can get a good idea by pulling up this chart. This previous drop looks pretty scary. My first thought is that Bitcoin will continue to tumble and revert to this trendline that I have drawn out. But, then again, Bitcoin has surprised us before.
Bitcoin's Previous Pullbacks:
In 2017 Bitcoin had a grand total of 6 pullbacks of 20% or more, yet finished the year with gains of 1260%.
The current pullback we are experiencing is about 50%. This is larger than any pullback it has experienced during it's current bull run, but I don't think this means certain impending doom for the alternative currency. What makes this whole situation really laughable is that a 50% market correction in the stock market would bring total fear and despair. From what I've seen, sentiment in the crypto world is still fairly good! I still see many bulls and optimists, more than I see bears.
Here's What The Bears Have to Say:
Jamie Demon (I mean Dimon) has been known to be a crypto bear. He came out in October 2017 calling Bitcoin a fraud. He thinks the underlying technology of the blockchain is going to be useful for global money transfers, but nothing else. He doesn't see the value of a crypto that is limited in supply.
I have suspicions about JP Morgan and other banks that may be trying to manipulate Bitcoin, but there is yet to be recorded evidence. Although, I do think creating a futures contract gives these banks the potential to drive the price down just like they have been doing to precious metals for years.
Check out my post where I spotted gold market manipulation first hand here.
Each time Bitcoin took a hit, market pundits were out on the mainstream news boasting about how they new the bubble would pop.
One of the most infamous Bitcoin bear and gold bug, is none other than Peter Schiff. Schiff is known for making a ton of money in the gold market through selling and storing the precious metal. But, for some reason Peter can't understand the new paradigm of what may be "digital gold."
Here we have two bears.
One is in charge of one of the largest and oldest banks in the world. Cryptocurrencies have the ability to disrupt the banking cartels hold on the money system. This is bad news for Jamie, we can't blame him for being biased.
The other bear is an old gold bug who makes a living in the gold market. His main goal is for the gold price to rise, so of course he's going to slam gold's main competitor for a store of value, Bitcoin.
As an investor, it is extremely important to tune out both bears and bulls. Both have the ability to cloud your judgement and help you make unwise decisions.
So, What Will Bitcoin Do Next?
It's hard to say, but here's the strategy I'm taking:
Since I got into the market at a good time, I am no longer putting new money into this market. Instead, I'm holding the cryptos that I have. The only coins I am holding as of now are Litecoin and EOS.
The majority of my coins are held in my wallet. But I am using about 20% of my Litecoin to day trade LTC/BTC. I absolutely love day trading LTC for BTC because if I really mess up on a trade, the worst that can happen is I end up with Bitcoin rather than Litecoin. Plus LTC/BTC pretty much move laterally with the occassional pump or dump.
Great post. Perhaps consider making Youtube videos!
What's your view on not diversifying and only holding Eos & Litecoin?
Both seem promising and safe so I'm not referring to safety in regards to diversifying but rather missing out on other gainers. Curious to hear your thoughts.
There are others that I like, I just prefer to stay away from speculating on those at this current moment. I like bitshares. The underlying technology there has the potential for local businesses to issue their own shares and create local stock markets which would bring prosperity back to dilapidated communities. I like Steem obviously. Litecoin, EOS, Steem and Bitshares have the greatest potential to make an impact in my opinion. To me, a lot of other cryptocurrencies are 90% hype. It's almost as if some people aren't even taking supply into consideration. It's not that these other coins don't have good tech, but the people who invest in most of them are foolish and are causing the price to go way higher than it should be. Similar to how people with no money get zero down loans and drive the housing market up ruining it for everyone else. Having a house is great, but not when it's been bubbled up by non thinkers.
Thanks for the response. Very interesting. I'll have to look into Bitshares. Never had a proper look at it but Dan seems to know what he's doing.
I think we'll still be in this hype for very long. Long enough to profit off of it but will have to watch out when things start crumbling...
It's kind of like the internet. The Nasdaq took a huge hit in 0-01 but has bounced back many times over since then. The people who sold amazon shares as they started to hit the floor back then greatly regret it today.