The "Bitcoin is a bubble" camp is finally vindicated!
After tagging 20K, Bitcoin has shed almost 50% as BTC/USD approaches 10K during 12/22 Friday trading. But let's not panic.
- The daily chart above shows the rapid retreat after tagging 20K last week. The dump is accelerating during the 12/22 session as price cracked below 11K during the early US session.
- The pace of price action is alarming and indicative of a panic that follows an unsustainable euphoric rise.
- We might see price slide further down to 10K, and even 8K.
- I can only say that if this slide were to stall soon, it would be in the 8K-10K area.
- Looking at the daily chart, the short-term price mode is definitely bearish. It is a falling knife and a dangerous time to buy.
- But at the same time, the saying goes "buy when there is blood on the street". After a little more bleeding, I suspect this will be the case for bitcoin and other crypto-assets.
- When we look at the daily chart, price is actually still above the 50-, 100-, and 200-day simple moving averages (SMAs).
- Furthermore, the RSI is at 40, and if it can turn up from here, the bullish momentum of 2017 is still on.
- The scenario of holding bullish technicals would probably require BTCUSD to hold above 10K.
- But we should give it a lot of elbow space and not be surprised by an extension down to 8K.
COINBASE's Shady Insider Trading Probe
- This week, we saw an unsuccessful roll out of Bitcoin Cash on the Coinbase/GDAX exchange.
- There was also a cloud of shady insider trading around this event.
- The news was just bad, and I think the combination of this Bitcoin Cash pump and dump mess with this bitcoin panic sell-off will sting a little and keep some investors at bay.
- My Opinions:
- Full disclosure: I invest in bitcoin and other crypto assets.
- I am a believer in bitcoin/blockchain. It is like a second layer of the internet that goes beyond connecting people. It is making the internet a platform for dramatic social change.
- I think it's good this space shakes out some weak hands. There will still be legitimate crypto projects, although too many will either be offering pie in the sky or be a scam.
- The bitcoin network and blockchain technology is here to stay, but price will be choppy. Remember, price action is a reflection of human behavior. When we are faced with something great we don't understand, you can expect a wide range of human emotions.