Bitcoin: BTC is at a Crossroads
Yet again, Bitcoin returns to the $10,000 USD threshold, and with it BTC stands at crossroads, a crucial point of reference for not just the king of cryptocurrency (BTC), but also the future of cryptocurrency in general.
Cross·roads
ˈkrôsˌrōdz/Submit
noun
an intersection of two or more roads.
- a point at which a crucial decision must be made that will have far-reaching consequences.
"we stand again at a historic crossroads" - a road that crosses a main road or joins two main roads.
noun: crossroad
Why is this BTC Value Important?
The ten-thousand dollar threshold is pivotal for the cryptocurrency market for several reasons:
- Firstly because Bitcoin is the cornerstone of this market, and as BTC goes, so goes the global cryptocurrency market cap. Altcoins typically thrive while BTC profits are flying high, and alts suffer when BTC struggles.
- Psychologically, $10,000 is a significant number: It being five digits, and an even number are influencial in the minds of investors, even if these considerations have no fundamental relevance.
- $10,000 is a major point of resistance and support: On the one day BTC charts (see below) Bitcoin has bounced off this $10,000 level 10 separate times! Three times as resistance, and 7 times it has supported price allowing us to bounce higher.
My Thoughts:
Bear-market?
To close beneath this threshold, on the one day charts, would mark a significant new direction of Bitcoin in my view. If Bitcoin closes on the one day charts below $9,900 USD, would in my view confirm a longer trend bear market.
Healthy Consolidation?
To hold above this threshold, on the one day charts, would mark the continuation of healthy consolidation and a broader hope that we are not entering a long term bear market, but in fact preparing to build support for a return to bull gains.
My Plan:
The recent price action does not change anything about my investment strategies for cryptocurrency, I remain optimistic. This pivotal threshold does not change my plans because the fundamentals of bitcoin, and cryptocurrency have not changed for the worse. I still identify Bitcoin as a revolutionary technology, and I am 100% confident that whatever 2018 brings, the future is bright for BTC and cryptocurrency in general.
I continue to research the technological development around crypto, and BTC in particular, and I am hopeful. Lightning network is on main-net now, and actual transactions are taking place as we speak. As the network is widening in reach and affect, the criticism around fees and transactional backlog are being answered, albeit slowly.
And it remains the case that much of the world is unbanked, and that crypto can be their bank. So as those developing nations gain greater knowledge and access to cryptocurrency more money will come to this space.
Today I am not buying more crypto, but only because the money I set aside for investment this month has already been spent. Next month I will buy more crypto, not because I expect a short term gains, but because I continue to believe that blockchain is a fundamentally revolutionary technology.
Blockchain is a leap forward in terms of value storage and trustless, permissionless exchange, and in my view those qualities are worth investing in.
Conclusion:
The recent price of Bitcoin does not in my view take away from its long term value, as always price is not why we should invest but rather you should buy a product if you see value beyond the current price.
In my view, price today does not speak to the long term value potential that cryptocurrency holds.
I hope that Bitcoin holds on the one day charts, and if it does we can expect a bounce to $11,800, or $12,500 range, in the short, but regardless of the price tomorrow I am confidently invested in cryptocurrency for the long term.
If you are scared by the recent price volatilty do yourself a service and reconsider whether you believe that blockchain is a revolutionary tech or not. If you believe in that truth then take a deep breath and continue to hodl. If you realise today that you invested in crypto for some other reason, maybe today is the day you say this is not for me.
As always, my advice is that we all investigate, plan and then act. Do not FUD or FOMO into anything, and if you did so, repeating these steps (investigate, plan, act) will help you find a new path which is more appropriate for you, and your unique circumstances.
Disclaimer:
Do your own research. Do not buy or sell because I have said something here. I am not a financial advisor, nor am I an expert. I am just a guy talking about his interests on the internet.
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Muchas gracias por todo.
I think you'll get your chance to buy next month, probably for cheaper than now. In my mind btc is already back at like $5-6K.
Or even lower. Historically it returns to something close to its old floor (like 2-3x where it started) after it has a parabolic spike. Which would mean something gross like $2-3K.
It doesn't have to follow its historical pattern, or go quite that low, but seems an ok guess that it could.
And then stabilize and repeat.
We'll see!
I'd be ok with that. I suspect such price action would scare many buyers, but I've got another $10,000 on the side lines that I'd love to get into to BTC for $8000/per, or lower. I was thinking $7000-8000 might happen, but I was not considering $3000/per.
Thanks for the comment.
Sure! Don't take any of my advice, obviously lol.
If I had USD waiting to get in, I'd like buying under $8K for sure. You don't want to risk trying to let it go too low, or you might miss it, of course.
So the $2-3K per is more "I'm bracing for this possibility" rather than it's what I'd wait for if I was buying.
Bitcoins price history has had MANY bull runs and major dips. I am not concerned with the stagnation taking place at the moment. I believe the massive bull run to $20k was a bit out of whack and the pull back all the way to $10k seems healthy..healthy when considering the crypto market at least :)
waoooww !! I think Bitcoin will raise $50000 in this year :) Whats your opinion ? By the way i appreciate your work man :) Thank you for sharing keep in touch :)
I think to answer your question we first have to discuss the major hurdle preventing such growth. The main consideration or hurdle as I see it, is market manipulation. I believe firmly that rich investors, who knew futures markets were coming months before they arrived, took the second half of 2017 to buy BTC at low prices, and throughout 2018 they have been invested in futures, shorting BTC, and selling off their holdings.
This is my opinion, and I cannot prove it, so take that with a grain of salt.
But if that is a major factor in recent price dips, I think we can anticipate that the wind in those sails will run out shortly. They can only sell off until they have no more. Also we have seen $10,000 has held 7 seperate times, which tells me that buyers (like me) agree that value is fair for BTC, which is why when it reaches that low it gets bought up.
I think rich people are monkeying with the value, and will continue to monkey as long as weak hands in crypto continue to sell into FUD, why? Because those rich, strong hands, want to scare you and me into selling so they can buy.
Long story short. I believe by end of 2018 the price will be at least $30,000, maybe as hig as $60,000, but it could go down before it goes up, and no one should ever buy because they think it will go up, but rather because they believe in the tech, the development, the meaningfullness of the coin, and then separately because they believe those factors will eventually drive the price up.
The difference is subtle, but important.
Bitcoin Vs. Litecoin: Which Investment is Better?
In short, where BTC goes, LTC follows. Charlie Lee being the face of LTC has burnt into the minds of the culture that LTC is the silver to Bitcoin's gold, and so investors are always going to think of LTC as second fiddle. Not to say its a bad investment, it isnt, but I never expect LTC to replace BTC, because the LTC founder has convinced everyone that it won't.
In terms of gains for 2018, I think LTC could grow proportially more, but that difference will be marginal.
I also consider that if anything ever passed Bitcoin, from there it becomes less likely that anything will ever hold longterm as the default.
So even in the off chance that LTC (or BCH, or whatever) was able to replace BTC.. then I'd consider it a decent chance something else will come in and replace them.
So there's essentially an implied loss of value, whereas with Bitcoin you still have the idea that the network effect makes it really tough for something else to overtake the lead.
I hadn't considered this, but I do agree with your point.
Now that you mention it, it makes me think: part of what holds BTC as # 1, is the fact that it has been #1 for so long. This feeds into the psyche of buyers and sellers, influencing where perception of price resides.
I often hear people say such-and-such coin could never be $200 billion dollars because that would make it worth more than BTC, but this assertion is founded on the presupposition that BTC must always be # 1 and that, this makes sense for some undisclosed reason.
I also agree that having a king is best for crypto. A figurehead on the market place, can focus media attention, bringing the spot light into one focused location, as opposed to spread across say top 10 coins. Its like a sports team with one star player, that player sells seats, and merchandise, having multiple good players is less exciting, and less attention grabbing.
Interesting.
Ya, I think even more than psyche, the network effect is a real thing.
There's price, and then there's also real activity. The network becomes more useful as it adds more users, and having a coin that's used commonly by almost everyone is kind of the hope and the most utility. (And having two that everyone accepts isn't necessary.)
To overcome the momentum of there already being users on the bitcoin network (vendors who accept it, etc) there would have to be some meaningful improvement on it.
And while some people would criticize bitcoin for being old and basic relative to i.e. ethereum, Andreas would tell us that being simple is the point. The characteristics that make Bitcoin simple also make it best suited to be the reserve/default.
In my mind improving on Bitcoin seems similar to trying to improve on the wheel. Once it's discovered there's really no tweak. It's a p2p ledger and that's all we want it to be. (In terms of being the reserve/default basic unit. And then things like ethereum and steem serve more specialized roles.)
So I think there are very real reasons that sort of "glue" bitcoin to the top, and that speculators are recognizing this more than driving it.
Not that something passing bitcoin couldn't happen, but to me it seems more the exception than the rule of what to expect.
Right! Even the name is suggestive of that.. "Litecoin".. lighter than what? You wouldn't describe it this way if it wasn't born to be relative to something else.
esperemos que la decisiones que se tomen sean las mas adecuadas amigo por el bien de muchos..
Últimamente he seguido el valor de las cryptomonedas y están en una balanza hoy suben pero mañana puede bajar y así seguidamente.!
Ojala que el Steem siga subiendo su valor, muy buen post :D