Bitcoin Market Crashing: Is this the end of Bitcoin or a pause before the next Bull Run?
Whenever the masses fully embrace a market, trouble is usually close at hand, and that’s what occurred with bitcoin; the masses were completely enamoured with Bitcoin. The masses were euphoric and were expecting bitcoin to soar to the next galaxy. Wild targets of $100,000 were being issued that sounded more like the ravings of a lunatic than of an expert. In an article published on the 4th of December 2017 we made the following comments:
Bitcoin, on the other hand, is now in the feeding frenzy stage, so this market is ripe for a correction. Tactical Investor
The problem with Bitcoin is that it’s not the only cryptocurrency; every Tom, Dick and Harry can issue a cryptocurrency, and to date, that is is what is occurring as we speak. There are so many cryptocurrencies out there that it in our opinion the better way to score a home run would be to issue your own cryptocurrency.
What caught our attention was that the masses were jumping up in joy and embracing bitcoin, but for over nine years they refused to embrace the equities bull market. Mass psychology states that when the masses are euphoric (not to be confused with bullish); the outlook is going to take a turn for the worse. And more or less that’s what transpired with bitcoin.
Clear Psychological signals that all was not well
Long Island Ice tea; a company that has nothing to with the Bitcoin market decided to change its name to Long Block Chain Corp. Mind you the name change had not taken effect yet, but the effect on the stock price was immediate; it tacked on almost 200%.
The CEO of Long Island Ice tea had this to say about the upcoming name change:
“We view advances in blockchain technology as a once-in-a-generation opportunity, and have made the decision to pivot our business strategy in order to pursue opportunities in this evolving industry,”
What a load of rubbish as no one in the company has a clue as to how blockchain operates. It’s interesting to note that other than the intended name change, this company has no viable block chain product (as of the date of the above announcement). It just thinks it would be a good idea to get into this market. The company makes beverages for crying out loud. Before the name change, its stock was down roughly 40% for the year. It is a tiny company with sales of just $1.6 million, and viola all it had to do was change its name, and its stock surged.
Riot Block Chain was known as Bioptyx, and its price soared after it changed its name. LongFin (LFIN), a financial company saw its price skyrocket after it announced it would be buying a blockchain microlender. And most recently Kodak decided to take a similar route, and its stock price jumped.
At this rate, even companies that specialise in garbage might decide that it’s a good time to add the words blockchain to their names. Hey, why not right? It’s like share buybacks on steroids; here you don’t even need to borrow money to buy back your shares, just change your name and voila, your stock soars in value.
The creator of Litecoin Charlie Lee sold his entire stake before bitcoin crashed; he claims it was due to conflict of interest. Strange he waited till now to sell it. Maybe it took a few hundred million for him to figure out that there was a conflict of interest issue? http://bit.ly/2leWumd
People were taking out mortgages or cash advances on their credit cards to invest in Bitcoin. Taking money you don’t have to buy something you can’t afford in the hopes you score a home run; what could go wrong with such a brilliant plan?
The last Psychological Straw?
When two experts, James Altucher and John MacAfee stated that bitcoin was destined to soar to $1 million, it was almost a given that the outlook would change for the worse. We sent out the following warning to our subscribers:
Bitcoin is now in a full-blown mania stage; people are taking mortgages to speculate on bitcoin. Insane price targets of $1 million are being tossed into the air, and the masses are lapping it. That is how the market works, it gives and gives but then it strikes and takes everything back ten times faster. Market Update Dec 17, 2017
Bitcoin futures; the perfect vehicle to manipulate Bitcoin
Bitcoin futures provides a great venue for the big sharks to swallow up the silly sardines hoping to strike it rich. The big players can now manipulate the bitcoin market via the futures market. They can use Fiat money (worthless paper) to push it up or down, much the same way they did and are still doing with the precious metals markets. Which illustrates the lie behind the “Bitcoin is different nonsense”; Bitcoin is nothing but digital fiat; in some ways, its worse as anyone can issue their own cryptocurrency.
If you look at the above chart, it puts into perspective how fast the situation went from excellent to unpleasant/painful. While the crowd is anxious, they are still not in panic mode. The bloodletting will continue until the trend of lower highs that started after Dec 14, 2017, comes to an end. On the conservative side, we think Bitcoin could drop down to the 8,800-9,200 ranges, but this market is far from your typical market, and there is a good chance that Bitcoin could drop down to the $5000-$5600 ranges before the dust settles. The masses are notorious for selling at or close to the bottom, so while $5000 might appear implausible now, just remember that panic has a way of distorting reality. When a person panics, they forget what they are doing, their objective is to get out of the game as fast as possible regardless of the cost.
Bitcoin will trend upwards again, but the trending upwards does not mean it has to surge to new highs. A bottom will be close at hand when experts stop issuing lofty targets and turn on this market. Compared to the wild bubble like action the bitcoin/blockchain sector has experienced, the equities markets appear almost timid. One could argue that if these markets follow a similar path, then the Dow and SPX could trade a lot higher before experiencing a strong correction. And that lofty targets of Dow 30K might not be that lofty after all. We will discuss this in a follow-up article, which we hope to publish with the next 1-2 day.
For those who want to play the bitcoin market, a somewhat safer alternative would be via Bitcoin Investment Trust (GBTC). Its quite liquid and you can jump in and out with the click of a mouse. Consider waiting until the sentiment turns decidedly negative or bitcoin is trading at least in the $8000 ranges before deploying some of your funds and don’t bet the house on this market.
On a final note, the outlook for Gold right now is far brighter than that for Bitcoin.
We are entering a new paradigm; get used to forever QE, though it will be given other names along the journey to make it appear more palatable. The US and by default worldwide debt is set to soar to preposterous levels; if a national debt of almost $22 trillion is shocking to some; imagine how they will feel when the debt soars to $100 trillion. Market Update Feb 28, 2019
If you shook your head vigorously when you read the above statement, print it and put it somewhere, you can easily access and then review it a few years from today. You will be unpleasantly surprised to see how much the situation has changed; the masses are not paying any attention to the national debt.
Central bankers have become very adept at deflating a nation’s currency while maintaining the illusion all is well. This is achieved by subsidising key industries, using a basket of goods that (and the sectors these goods originate from are usually the one’s receiving massive subsidies) paint a false picture regarding inflation and most importantly, they control the media. Let’s briefly look at some of these subjects today.
The press and the crowd effect
Any student of history can spot a pattern that goes back to ancient times; the powers that be knew that the key to controlling the masses was to control the news outlets. In the old days that meant having control of the gossipers, as time passed on, the name gossiper was replaced with the term reporter. Today’s reporters are only concerned with the number of eyeballs they can attract to a given story; it does not help that the people that hire them also encourage this behaviour. The press is the most potent weapon available; it can destroy a person even if he is 100% innocent. Mass media’s sole function is to manipulate the masses; think about it mass media is not for the observer or for the critical thinker; it’s for cows who are begging to be led to the slaughterhouse, hence the term mass media. If you want to have a good idea of what is really going on; you will read several sources that are not widely referenced by the masses and then use that (collective) data to paint a picture.
Elias Canetti’s view on crowd behaviour is spot on:
It is only in a crowd that man can become free of this fear of being touched. That is the only situation in which the fear changes into its opposite. The crowd he needs is the dense crowd, in which body is pressed to body; a crowd, too, whose psychical constitution is also dense, or compact, so that he no longer notices who it is that presses against him. As soon as a man has surrendered himself to the crowd, he ceases to fear its touch.
That is the mass mindset for you, individuals feel great when they all share a common theme and a so-called common goal, but nature clearly states that everyone cannot win and that there has to be a loser or losers for every winner as it depends on how much the winner takes home. 10 losers might be needed to fund one big winner. Teamwork never pays off except for the person that is pushing the concept of teamwork. Misery loves company; how rare it is to find a group that is happily sharing positive stories; bragging does not constitute a positive development, in fact, it is usually a sign of mental instability.
Subsidising goods
The idea here is to keep critical products at prices that appear to be reasonable. If essential items become too expensive to purchase, the crowd will scream. However, if they have access to reasonably priced education via public schools and colleges, access to affordable food and other basic necessities, then one can create the illusion that inflation is not an issue. So when we state that inflation is a non-event, we are using the Fed’s distorted figures to make this point. In reality, inflation is a massive problem. Just look at the cost of housing, which includes buying or renting, one can easily see that inflation is an enormous problem. Another area is medicine; anyone with a brain can see that inflation in the medical sector is alive and thriving.
Getting the mass to believe old newspapers (your paper money) is real money
In this area, they have been incredibly successful; very few of today’s young generation even understands the concept of hard cash or what constitutes real money. They assume fiat is real and they are now embracing digital forms of fiat such as Bitcoin. This means that the central bankers are now in a position to inflate the money supply beyond the wildest dreams of their predecessors. There will be a day of reckoning but those waiting for that day will probably see their day of reckoning first. Until the masses start to doubt Fiat money, nothing will change; the masses are showing no signs of resisting Fiat. So no matter what the hard money expert’s spout, their knowledge is useless for nothing will happen until the masses reject Fiat. Just like the stock market is unlikely to crash until the Masses embrace this bull market.
Emotions govern everything, and if you can identify the emotion driving the masses, you can profit from almost any situation.
Central bankers have suddenly changed their chant
What is remarkable is the speed at which central bankers changed their tune and how equally fast and without question, the masses accepted this change.
Nobody is objecting to QE, 10 years ago, they made a big noise, but now the populace at large believes it is a necessity. Let’s start off with the quote we posted by Clarida in the last update, for it clearly tells us that the Fed is not going to stop supporting the stock market, but in fact, it will take even more drastic measures to help the markets in the future. Let the contents slowly sink in, and you will understand why Central bankers will not stop deflating the currency until the masses scream bloody murder and by then it will be too late.
Clarida acknowledged no doubts. He said that radical monetary policy has worked, that it will continue to work, and that it may well become more radical. He contended that low-interest rates are here to stay and that new policy “tools” must be sharpened and kept at the ready.
U.S. inflation forecasts decline, supporting rate-hike holiday
The survey of consumer expectations, published on Monday, is one of the Fed’s price gauges as it weighs the need for rate rises. It showed one- and three-year ahead inflation expectations were down 0.2 percentage points to 2.8 percent last month, with sharp declines in expected medical care expenses. Both the one- and three-year gauges had been roughly unchanged since April 2018.
Stable and low inflation is one of the main reasons that the U.S. central bank, having raised interest rates four times last year, is now taking a wait-and-see approach to any more tightening in 2019.
The New York Fed’s survey found that consumers expected tame inflation despite also forecasting their own wages would rise. Average one-year earnings growth expectations increased to 2.5 percent last month, from 2.4 percent the month before. Consumers also forecast a lower likelihood that unemployment will rise. Economists are debating whether rising wages and low unemployment figures still translate into higher inflation as orthodox economic theory assumes. Full Story
ECB holds interest rates steady to curb Eurozone slowdown
Policymakers at the European Central Bank on Thursday announced a new round of cheap loans to banks and said record low-interest rates would remain unchanged “at least through the end of 2019.”
Previously, the bank had indicated that the earliest rate hike would come in the fall. The measures aim to allay fears of a eurozone slowdown spurred by uncertainty over Brexit, a US-China trade war, and threats by Washington to impose tariffs on European auto imports.
“We’re coming out of, and maybe we still are in a period of, continued weakness and pervasive uncertainty,” ECB chief Mario Draghi told reporters in Frankfurt.
“Our decisions certainly increase the resilience of the eurozone economy,” he added. “But can they address the factors that are weighing on the economy in the rest of the word? They cannot.”
Carsten Brzeski, the chief economist at the bank ING Germany, said the measures came surprisingly early.
“It is clearly an attempt to stay ahead of the curve,” he said. “Any next step from here to tackle a severe downswing of the economy would now require unprecedented measure. Full Story
Global economy: Why central bankers blinked
The wariness descending over leading central banks is a jarring contrast to the buoyant mood this time last year. At the gathering of business and political leaders in Davos, Switzerland in January 2018, optimism was simmering, with one survey of bosses putting confidence at its highest for six years. The IMF hailed the broadest synchronised global upsurge since the start of the decade, with 120 economies enjoying a pick-up in growth.
An update from the IMF last month bemoaned the “backdrop of weakening financial market sentiment, trade policy uncertainty, and concerns about China’s outlook”. Growth in advanced economies will slow from an estimated 2.3 per cent in 2018 to 2 per cent in 2019 and 1.7 per cent in 2020, it said. Global manufacturing activity is at a two-and-a-half year low.
“You are getting a much more sober assessment of global growth,” says Mohamed El-Erian, chief economic adviser at Allianz.
What has gone wrong? The sea change reflects, in part, a realisation that policymakers became overly bullish last year, says Mr El-Erian. The Fed, in particular, over-reached by signalling four increases in interest rates for 2018 when the global economy was still fragile, he says. Its new-found caution is providing “air cover” for other central banks to mark down their own rate expectations. Full Story
What do these headlines indicate?
These stories confirm that we were on the right track when we stated that the Fed had no intention of pushing rates too high for the past 24 months. We pointed to the reaction from the bond markets, Baltic dry index, the world economy, etc.; these indicators showed that this rate hike scheme was nothing but a game of smoke and mirrors. This manipulation of the money supply is going to affect the stock markets dramatically; every single expert that refuses to adapt will be flung under the bus; there will be no exceptions.
The markets will experience many corrections ranging from wild to mild, but almost all of them will prove to be buying opportunities unless the trend changes. If one takes a look at the megatrend (megatrends are ultra-long term trends) then every back-breaking correction has to be embraced; however, by employing human emotion as a timing indicator, we can determine the optimum time to jump in and out of the markets.
Easy Money altering Market Dynamics
Such vast amounts of money sloshing around can alter the picture dramatically; what should happen in most cases does not. Under normal circumstances, precious metals should have soared to the moon, inflation should have been rampant, commodities (in general), should have risen in value. The housing sector should have tanked as rates would have risen in an inflationary environment, hundreds of business should have filed for bankruptcy, the stock market should have experienced another back-breaking correction, and the list of woes goes on. But almost none of the above has occurred, which clearly indicates that the old tools economists and financial experts are relying on are practically useless.
Random Quotes About Fiat Currency
“Growth for the sake of growth,” says Edward Abbey, “is the ideology of the cancer cell.”
“Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” economist Kenneth, Boulding
“If corporations are indeed ‘persons,’,” David Niose writes in Psychology Today, “their mental condition can accurately be described as pathologic
Be prepared for the unprepared and remember everything can change but human emotions never do; 90% of humans are wired to do the exactly the same thing at precisely the wrong moment, ensuring that the maximum amount of damage will be inflicted by their ill-planned actions. If you can identify the emotion driving the masses, it is not too hard to find a way to stay out of harm’s way.
However, every problem ranging from declining moral standards, corrupt politicians, surge in wars, political polarisation, and a host of other terrible factors, can in some way be attributed to FIAT Money. As the money supply increases, the situation will continue to deteriorate. Freedom levels have to be curtailed the more a nation debases its currency and nowhere will this been seen more clearly in the US. Think about how much freedom we have lost since 911 and how the national debt soared after it.
Taking things are a step further
This 2-hour movie is an excellent starting point as to why the Top Players go out of their way to control the masses. The idea has always been to target the next generation at the earliest age possible, and with the passage of time, these guys are getting better and better at this game. This video covers a lot more than this concept, hence the length, it definitely makes for an interesting watch.
Final Parting Thoughts on Fiat Currency
Never wear your emotions on your sleeves; observe and use the data to formulate a plan. If one is part of the emotional chaos, one cannot see or hear anything other than the picture they are being directed to examine. Only a calm mind can see what is going on. You have a millisecond to question the emotion that is about to take over; will you examine it and in doing so open a new door, or will you allow it to take over and lead you astray. Insanity is doing the same thing over and over again and hoping for a new outcome. New outcomes come from new actions, not hope; change the angle of perception and in doing so change the outcome.
Kodak surges at it becomes latest ‘cryptocurrency’ convert
NEW YORK (AP) — Kodak, which traces its roots to the early days of film-based photography, is getting into the digital licensing and cryptocurrency market as part of a partnership with WENN Digital. The companies are launching blockchain technology with KodakOne and KodakCoin. Blockchain is a ledger where transactions of digital currencies, like bitcoin, are recorded.
Rochester, New York-based Kodak, founded in 1880, is the latest company to enter the cryptocurrency market as Bitcoin makes gains. Bitcoin has surged from less than $1,000 a year ago to more than $14,000.
Recently, Long Island Iced Tea Corp. said it plans to change its name to Long Blockchain Corp., as it wants to focus more on blockchain technology while continuing to make beverages.
The Kodak systems will allow photographers to register work that they can license and then receive payment. The initial coin offering will open Jan. 31. Full Story
A clear indication that Bitcoin will probably trade below 10K and possibly as low as 5K before rallying to new highs; more and more companies will follow this path. Eventually, a garbage collection company might decide to join the pack.
Bitcoin headed to $100,000 in 2018, says analyst who predicted last year’s price rise
Bitcoin (Exchange: BTC=) could hit $100,000 in 2018, an analyst who correctly predicted the cryptocurrency’s rally at the start of last year told CNBC on Tuesday. Kay Van-Petersen, an analyst at Saxo Bank, added that other rival digital coins could also outperform. Van-Petersen forecast in December 2016 that bitcoin would reach $2,000 in 2017 . At the time, bitcoin was trading below $900, according to CoinDesk, a website that tracks the price of digital currencies on a number of different exchanges. Bitcoin blew past the $2,000 figure in May. Van-Petersen said Tuesday that bitcoin could hit between $50,000 and $100,000 in 2018. “First off, you could argue we have had a proper correction in bitcoin, it has had a 50 percent pull back at one point, which is healthy. But we have still not seen the full effect of the futures contracts,” Van-Petersen said. The CME and Cboe both launched bitcoin futures trading contracts last year. Full Story
This eerily similar to some of the articles the Gold camp was pumping out in 2011 and early 2012 after Gold topped out. Their take at the time was that Gold was just building momentum and getting ready to soar to the next galaxy. Instead, the spacecraft blew up before it even achieved escape velocity. Individuals that pen such articles are nothing but shills looking for a way to push the markets up so they can bail and leave the masses holding a rusty can.
Bitcoin cryptocurrency is part of blockchain technology, and while the outlook generally appears good for blockchain, some technology experts are already warning that quantum computers could blow a hole through blockchain. We feel that several significant discoveries will be suddenly announced in the field of quantum computing.
Bitcoin could still trend higher, but when people keep pushing ridiculous targets, it indicates that the market in question is more likely to pullback then rally to new highs. At this point, the odds are far better for bitcoin to trade to 5K then 100K. Bitcoin is not something we would invest for the very long term, it is going to go through a brutal correction at some point, but this market is still indicating the superbubble pattern we spoke of last year is still intact. For this to play out, the market would need to experience a very strong correction and shed at least 60% of its value, but we would prefer a pullback of 70%.
The story below discusses the quantum computer threat
Could Quantum Computing Kill Blockchain and destabilize cryptocurrency?
Quantum computing gives us extraordinary computational power, making mince meat out of problems classical computers struggle to solve. The world’s most pressing issues, like that of climate change, can only be overcome with machines like quantum computers. Yet, as with all new technologies, it has the power to render features of other technologies obsolete. These technologies must mutate to survive and thrive, or else be left in the junkyard of one-hit wonder technologies.
With blockchain, that predator is quantum computing. Blockchain’s security comes from its enhanced encryption standards, but the power of quantum computing leaves experts worried that the encryption employed by blockchain will be overcome too easily by quantum computing.
Recently, researchers from the University of South Wales constructed a new architecture, similar to the ones used in today’s processors, to perform quantum calculations. This has significant implications for the average person. It means that the same technology used to run the devices you use today could be used to run quantum computing calculations.
Quantum computing, even pocket quantum computing, is inevitable. However, it has always been seen as a distant dream – 10 to 15 years in the future has been the industry opinion on the arrival of commercial quantum computing. This discovery by UNSW researchers discredits that prediction. It could now arrive much faster and that may not bode well for cryptography and blockchain as a whole.
It is technically possible for a classical computer to break through the asymmetric encryption that coins like Bitcoin use, using sheer brute force (running through all possible solutions); it would just take a very long time. Quantum computers operate at a magnitude many times quicker than classical computers though, and it is easier for it to defeat asymmetric encryption.
That puts cryptocurrency and blockchain in a tight spot. Cryptocurrency and blockchain could be forced to evolve, to mutate so as to possess new characteristics, or else the much-loved security and privacy that enthusiasts sing praises about might be a thing of the past.
If quantum computing research continues at its current pace, then it will have no problem breaking the encryption used by blockchain. The economic system of cryptocurrencies would become all but useless since it would be possible for hackers to steal your coins, commit fraud and control the blockchain. If someone could easily steal your bitcoins, it wouldn’t be good for Bitcoin’s reputation.
You may have heard of the term “51% attack”. This is when miners control over 50% of the network, allowing them to double spend. In layman’s terms, this means they can spend money twice by deleting transactions from the blockchain.
Quantum computers could give malicious miners the power they need to break this 50% threshold. This particular security worry is not an immediate concern. The projection is that it will be at least 10 years before quantum computers are capable of doing this. However, with the recently revealed engineering architecture for quantum computers, that timeline may be shortened.
There is a far bigger concern which, as we mentioned, is the ease with which quantum computing can break public key encryption. Quantum computing is expected to reach this level of power by 2027. In other words, if today’s encryption standards and by extension, blockchain security, doesn’t evolve new security techniques or encryption standards, it will be practically useless.
The good news is that long-term thinking developers of cryptocurrencies are in fact preparing for this eventuality and they’ve got a few tricks up their sleeve. https://goo.gl/df4ykZ
China has opened the world’s largest Quantum Computer research centre at the cost of $10 billion. Russia with the world’s best hackers has several covert programs dedicated to quantum computing. It is just a matter of time before they figure out a way to use quantum computers to not only hack the bitcoin market (very easily) but to hack many other encrypted systems. We have already witnessed the many heists hackers have performed on the bitcoin market using non-quantum computers.
The underground world is usually always two steps ahead of the corporate world, and that’s generally because the corporate world does not want to spend large amounts of money to update their systems to new threats. They rely on an uninformed consumer believing their pathetic excuses that something unprecedented happened that was beyond their control and now that it has happened they are implementing top-notch technology to protect their systems. When hacked again, they will mouth the same excuse, which is what they have been doing for the past 30 years. Full Story
Despite the heavy beating Bitcoin has taken, the sentiment has not turned bearish, and there are still have too many articles being published on a weekly basis claiming that Bitcoin is going to surge to 100K and beyond.Do these experts ever bother to look at the charts before issuing such targets or do they do so after ingesting some toxic substance? We will never know the answer to that question, but what we do know is that in most cases they have no idea of how high or low the market is going to go.
They issue lofty targets that have a very low probability of being hit because if the market trades to these levels, they become instant heroes if they miss they can push some convoluted theory, for example, market manipulation to justify the bad call. The fact that Bitcoin is trading over 50% below its highs does not seem to faze these experts; they are quite resilient and continue to push for targets that border on the fantastic.
We warned our readers that the bitcoin Bull was going to run into trouble
We published two articles on bitcoin since Dec of 2017, one on the 4th of December, and in that article, we made the following claim
Bitcoin, on the other hand, is now in the feeding frenzy stage, so this market is ripe for a correction
The second article on the 24th of January, and in that article, we issued price targets
The bloodletting will continue until the trend of lower highs that started after Dec 14, 2017, comes to an end. On the conservative side, we think Bitcoin could drop down to the 8,800-9,200 ranges, but this market is far from your typical market, and there is a good chance that Bitcoin could drop down to the $5000-$5600 ranges before the dust settles.
On the 4th of February, Bitcoin prices dropped down to $6, 627, that’s within striking distance of the low-end targets ($5000-$5600) we issued. So is the correction over and is this market ready to trend higher.
Bitcoin has violated the Main Trend Line
The first thing that stands out is that Bitcoin is trading below the main uptrend line and until that obstacle is cleared the path of least resistance is down. Based on this one observation we can state that the probability of it testing the $5000 ranges is significantly higher than of it surging to new highs. It could trade lower, but that will depend on how it behaves when it tests that level, so there is no point in discussing targets below that mark. Experts expecting Bitcoin to surge to new highs could be in for a shock this year.
There are still too many bullish articles on bitcoin
Here is a small sampling of the articles published over the past four weeks
Bitcoin price: Cryptocurrency to soar above $30,000 in 2018
Bitcoin price to ‘double’ in 2018 cryptocurrency boom
Struggling bitcoin will double by mid-year, Wall Street’s Tom Lee says
Bitcoin Bull Tom Lee Goes Hyperbolic on Latest Price Forecast
Cryptocurrencies Forecast to Resume Surge According to Expert
Bitcoin Price Will Double by End of 2018
Bitcoin Will Stabilize, Hit $50K by 2019: Neu-Ner
Bitcoin price ‘to double’ in 2018 – so what about Ethereum and Ripple
Lower Highs Trend is a negative factor
The trend of lower highs shows no sign of abating. A series of lower highs is usually a bearish signal and signifies lower prices. The first positive sign would be for Bitcoin prices to surge above its downtrend line.
Lastly, if you look at the above image, you can see that the Bitcoin camp is still not in disarray. One of the things we pay very close to attention is investor sentiment, and until the Bitcoin camp is in disarray, we feel that it’s unlikely to surge to new highs until this gauge is in the hysteria zone.
Conclusion
Bitcoin had a fantastic run; in fact, the run-up was so spectacular that it makes dot.com mania of the 90’s seem sane in comparison. Any market that has experienced such a spectacular run must also experience a back-breaking correction. While it appears that the drop from $20K to $6600 ranges might qualify as backbreaking, one has to remember that Bitcoin surged over 11,000%, so the current pullback is only backbreaking for the latecomers. Usually, when a market experiences such a strong move, the 1st few breakout attempts tend to fail.
The prudent course of action would be to wait until there is a surge in the number of articles calling for the demise of bitcoin and investor sentiment sours, before committing new capital.
