Bold Statement: We Are Headed For The Dead Cat Bounce (A Must Read For Every Steemian)
I am extremely bullish on cryto currencies in the long term. Crypto currencies are the future no questions asked but that doesn't change the fact that it can drop like a guillotine and not come back anytime soon. Don't mistake this post as trying to spread fear. This isn't my first rodeo. I saw my parents get smashed in the dot com bubble and have studied what happened in that bubble. I had money in the stock market when it collapsed in 2008 during the real estate bubble. I first found out about Bitcoin in late 2013 and ultimately I lived through the crypto nuclear winter of 2015. It was terrible. A high of $1200 in 2013 and a low of $176 in Jan, 2015. FUCKING TERRIBLE!
This boom cycle has literally been like Déjà Vu in a lot of ways. The Bitcoin Cash scenario was the one main difference. This time around instead of having clone coins of BTC and LTC we have all these ICOs. 90% of them are scams or go no where projects that don't make sense.
On September 10th
Four days ago I made the following statement that this boom cycle was likely over. I texted that to @steve-mcclair . Basically that it wouldn't overtake the high of $5,000 this cycle. That was before the last few days of brutal drops. Check out the date on my text.
You Think This Time is Different?
I know the feeling of not knowing how long a run will go on. There is no real way to tell a lot of times. These booms in all sectors tend to go on way longer than expected. The rise of the stock market, real estate, and this cryto boom cycle have all honestly lasted longer than I expected them to. Focusing on the crypto market my main concern with Bitcoin was that there were all types of scaling issues.
Bitcoin worked better in 2013 when I got involved then it does now. That is honestly pretty sad. I'm not talking shit but what if your cell phone you have now didn't work as well as the one you had in 2013? That would be unacceptable and you would be pissed.
Main Stream Attention
As far as celebrities scenarios or crazy things that happened it honestly feels exactly the same for me when you take a step back and take a look at it. First I'm going to have a list of stuff that happened in 2013/2014 boom cycle. It was exciting and it went "main stream."
2013/2014
December 1st, 2013 - "A College Kid Made More Than $24,000 Yesterday Just By Waving This Sign On ESPN"
January 14th, 2014 - "Kanye West Sues Amazon, Others Over 'Coinye West' Cryptocurrency"
http://www.hollywoodreporter.com/thr-esq/kanye-west-sues-coinye-west-670844
January 22nd, 2014 - "Online Donors Send Jamaican Bobsled Team To Sochi"
February 26th, 2014 - ObamaCare uses a Dogecoin like meme to promote ObamaCare.
https://coinreport.net/bitcoin-can-learn-dogecoin-community/
April 27th, 2014 - "The NASCAR Dogecoin car is real and it is beautiful"
http://ftw.usatoday.com/2014/04/nascar-doge-dogecoin-dogecar-josh-wise
October 30th, 2014 - Shaquille O'neal Mentions Cryptocurrency Quark
2017
All the stuff of Jamie Dimon running his mouth about Bitcoin, Paris Hilton tweeting about crypto, Floyd Mayweather mentioning crypto on Instagram, the OG dude holding up the Buy Bitcoin sign at the Fed Meeting.....etc....etc...etc. All great stuff and as you can see from the events above Bitcoin and crypto went "main stream" back in 2013/2014 from a media perspective.
Yes I get it, volumes are way up and institutional money has been coming in and all that and that is why the price is higher. Each boom cycle will go higher for the coins that can keep people's attention. A lot of coins will fall by the wayside and the top 20 and top 100 will look way different in a couple of years.
Now let's look at the common chart that gets shown for all bubbles that burst.
So I believe with this crypto boom cycle we are at the "Bull Trap" AKA the Dead Cat Bounce stage. I honestly thought when it dropped to $2,000 a few months ago that that was possible the Dead Cat Bounce. I think it could have been but then suddenly we had the Bitcoin Cash situation and everyone wanted to hold or to buy Bitcoin to get their "free money." It was tons of fun and one of the most interesting things that happened in this space in it's history.
Another Similarity
With all the uncertainty from China whether crypto exchanges will be legal or not has a lot of people worried. This same type of thing was happening back in 2013/2014. There was always news in Russia and China as if it was going to be outlawed. Then we had the Mt. Gox fiasco. Then MintPal went down. There was tons of good news going on at that time as well. Merchant acceptance was rising and PayPal even signed a partnership with Coinbase and a few other companies in the crypto space.
The Bitcoin Football Bowl game was coming up. There were all kind of exciting things but the price kept sliding.
The Main Reason For The Price Decline
Cryto has had a great run and people are going to take profits and try to avoid drops when there is bad news. The big drops like this crush the little guys who need the money in the next couple of months to pay bills. A lot of the people getting in lately are people who just don't want to miss out and think they might get rich or at least make a bunch of money in a couple weeks or a month before their bills are due.
Everything is so debt based these days that people don't even own their cell phones, cars, homes.....etc. How are they going to withstand the mental pressure of 30, 40, 50% drops? They can't. They need the money for the bills.
They fold one by one. A lot of people getting in recently don't know how to transfer coins, they don't understand what it is, they just think they can make a quick buck and do see potential in the general premise of it.
How Sure Am I That This Is The Dead Cat Bounce?
90% Sure. I have other things to do today but I have spent a lot of time on this blog to warn my followers and have this record on the blockchain.
It is possible the market overcomes this and Bitcoin goes to new highs but I'm anticipating that it falls to around $2,900 and then it will bounce back to about $3,800 before starting it's long VERY PAINFUL death spiral down to a base of $1,500 possibly lower.
Can We Make Money off The Dead Cat Bounce?
YES, but it will be tough. It will happen very fast and if the price targets are off slightly you can get dropped on your head. I might do a bunch of instant buys on Coinbase around that $2,900 mark if it gets there anticipating the bounce back up and then I will sell again on the rebound. It is extremely risky.
I wouldn't try to short Bitcoin because there is always that chance it could turn around and head to a new high but I think that is unlikely.
What Should You Do If You Are All In Right Now
At this point it probably makes sense to just hold and wait for the bounce and then when it is gets around $3,600 or so start skimming profits or retreating to things like the STEEM backed dollar.
What Am I Basing This On
Experience, History, Long Term Charts, The amount of dumb money entering the market, the amount of scams popping up, and my gut feeling.
Conclusion
Once again I'm very bullish on the crypto space over the long term. These drops can be extremely vicious and I don't want to see people get washed out. It will happen to a lot of people. It is a tough thing to do and sounds cliche but crypto money has to be money that if you lose it all it doesn't effect your current life at all. I don't follow that rule sometimes but I don't have any kids or anyone who depends on me. If I end up sleeping in a tent then FUCK IT! I went big if nothing else!
This post probably won't get a lot of upvotes and people will think it is "negative". Hopefully this was helpful to someone.
This isn't financial or investment advice. I'm just some guy who swims around in his pool and talks to himself. Ask your grandma or someone in a suit for advice or make your own decision.
Earn $10 Of Free Bitcoin From Brian Phobos!
Thank you for reading my post and please consider following me @brianphobos
I've been thinking the same thing last month. I've been in this space since 2012 and remember all the pain like it was yesterday. I'm still 100% "buy the dip". In a small way I hope it crashes to $1200 (I'd buy). I do sympathize with those experiencing this for the first time.
This is honestly one of the best posts I've read on Steemit - deep analysis based on yer best knowledge, and honest - 'gut feeling' - I like that!
Let's face it if the world's leading economists couldn't predict the financial crash of 10 years ago, who the hell knows what crypto's gonna do!
I'm only a very cautious crypto investor, in BTC etc. for the long term - very long term - so all the peaks and troughs, they're just irrelevant to me!
I've actually bought some BTC recently just so I can buy STEEM - but I honestly don't understand the difference between that and BTC, why is it more stable exactly?
Thank you for your comment! This blog post won't do as well as a lot of other people who just say. "Buy the Dips" and act like everything is a good buy. So I appreciate that you like the post for sharing my real feelings and what I'm seeing out there.
Well the differences between BTC and STEEM are several different things. So for BTC the block times are each 10 minutes. For STEEM the block times are 3 seconds so you can move coins around WAY faster. Also with BTC there are traction fees the way they have the incentive structure set up. With STEEM they masked the transaction fees in the inflation model so eventually when more commerce occurs with STEEM and the STEEM backed dollars there will be less tranaction friction between merchants and customers because there are no transaction fees.
A social network like this requires a lot of input and outputs for comments, posts, votes.....etc so it requires a faster mechanism to achieve that. Something like this couldn't be done on the Bitcoin, or Litecoin blockchains.
I hope that helps!
Yes that helps thanks, inspires me to look deeper - part of the reason I invested a few squid in crypto is to make learning about it more interesting!
And yer right, 'depth posts' seem to have little value on Steemit, which is a fundamental problem with the model, unless the creators are Lyotardian cynics viz 'knowledge' (which I imagine they probably are) in which case the platform reflects the value of knowledge perfectly - fickle as it is!
Thank you for that info !
I heard the same prediction a month ago or so.
And I could not belive it.
Now it looks like more possible scenario.
:-(
You are welcome!
I just feel it and with this China situation there are going to be more and more Bitcoins being off loaded most likely because the news just came out and then all these week hands in other parts of the world fold and can't take the pressure and it can tumble fast.
But the thing is, that we have no public in BTC and the crypto in whole.
There is no big institutions went deep into market yet.
It coud be just reaction for the news, + some miners and traders took profit...
And I think a lot of people will buy at 3000 + price.
I wouldn't say we don't have any public in BTC. Signups at Coinbase have been going crazy. People flooding onto these platforms who don't really know what Bitcoin is or how to transfer it. They just think they can get rich off of it and don't want to miss out.
How deep is deep? We have major financial institutions invested this time around.
Thank you for reply.
Get me right:
I am not saying we do not have them at all. But for now it is relatively low amount. I do not know that any pension fund bought BTC.
And if you going to ask people about bitcoin most of them know nothing about it.
And if we have JP Morgan in, that makes even more possibilities for manipulations ;-)
I get what you are saying. The general population has very little exposure or knowledge of what this is. I could go down my whole street and probably no one would know what Bitcoin is.
Followed.
Looking for a new thoughts.
;-)
I agree with you and my analysis tells me that Bitcoin could go down to around 1800USD before it starts going up again.
According to my technical analysis we could see a rebound from current levels (3400), may be up to 3600 and then it will go down again. That is the short term. On the medium term we could be completing Elliot Wave 4 which means that only Wave 5 left before a long term bear market starts which with Fibonacci analysis takes us down to 1800.
Here is my technical analysis
https://steemit.com/bitcoin/@freedomvigilante/is-bitcoin-going-to-recover-from-this-crash-technical-analysis-with-ledger-levels-fibo-and-elliot-wave
Thank you and I'm glad that other people are seeing a similar thing. There are so many of the people on the trending page that just say "Buy the dips" "Great time to buy" etc.
That is a very bold statement and backed up by facts. I see the $2900 being in the cards..perhaps even $2500. What will it do from there? I agree the profit-taking would be over at that point so a run makes a lot of sense. Where to then? It is anyone's guess.
One thing about bubbles...they are usually credit induced. The dotcom had people buying on margin (and credit cards)..the housing market was full of liar loans. My question is where is the credit in this instance? Being relatively new to the crypto world, I just dont see the plethora of "dumb" money in this arena yet. Am I missing it?
It is some very good points about credit being utilized in other bubbles with the margin trading and with the housing crisis it was liar loans....etc. Some of the crypto exchanges you can utilize credit cards to make purchases. Also people can do credit card convenience checks and write them to themselves and put those in their banks and buy Bitcoin with them. I don't know how big of a percentage that is but just in general people are more and more leveraged out these days just with their whole lives. It is hard to know exact numbers but there are tons of people living pay check to paycheck. Now the question would be if those are the types of people who are investing in Bitcoin? I think there could be a lot because for instance @trevonjb has a pretty large following and a big thing he says on some of his stuff is that he went from food stamps to having over $100K worth of Bitcoin in a year. Like he has $180,000 worth of crypto a lot of it came from pitching the Bitconnect scam. So those types of followings pore in and they might not have the money. But regardless it could be your run of the mill person with a 30 year note on their house and a car payment and a 2 year device payment agreement on their cell phone.....etc with other obligations like kids and all that. Then life happens and you need the money and this Bitcoin thing that has just been keeping you up at night because it seems to keep sinking ends up being something they sell because they need the money.
Plus another thing I would say is that in the crypto market the pops and drops are so much faster that the emotions can run higher. The stock market and real estate markets seem like snails pace compared to this stuff so people can get scared a lot faster and retreat to fiat money.
With the dumb money I'm just having people come out of the wood work contacting me because they knew I was in Bitcoin back in 2013. Finally they have warmed up to the idea at exactly the wrong time. It is a sign it is way over heated. Plus I'm having a lot of non techincal people sending me information on ICOs to get my opinion and I read the stuff and I'm like "What the Hell? This doesn't even make any sense at all." But those people would have maybe put money in if I wasn't there to say NO WAY. A lot of people don't have a trusted resource to go to. They are watching @craig-grant and @trevonjb and joining the BitConnect Ponzi scheme.
Hopefully that helps!
Ohhhh @craig-grant is the super star !
=D
HODL HODL HODL! I'm in long term for EOS, IOTA, Monero and STEEM! I don't need money for bills. Its all from money earned on steem and every day I'm earning more. OH! And I made money today on Bitconnect. Down market, up market...the bot makes money on volatility. Bitconnect only sucks when the market moves sideways and the bot can't trade and make anything. Bots are the future of the market.
Thanks for commenting. I like EOS, Monero, and STEEM. There is a lot of evidence to suggest that the Bitconnect bot doesn't actually exist.
I might change my bounce target on this to about $2,300. It is getting nasty out there. LTC and Monero have almost lost half the value from their peaks here recently. That is nuts!
All the banks use bots today. Charles Swab, JP Morgan, etc. They won't let you see their bots either. But they have been using them for almost 2 decades.
Haas online will sell you a bitcoin trading bot for a couple hundred bucks. Anyone today can get a bot and use it if you know how to program and code it.
I think Monero will come back. I'm hoping EOS will.
Of course there are bots out there but basically what I'm saying is that Bitconnect doesn't have any kind of bot that is able to dominate the market so much that it is earning so much that it is able to pay all these people all this interest and also referral fees and the whole bit.
If the bot was so good there would be no reason to pay so many people all this interest. Why not just pay themselves and keep everyone else out of the loop. With those types of returns they could gain so much money so fast and just keep stacking the profits.
It's just a Ponzi scheme with a Multi Level Marketing compensation structure stacked on top of it to get tons and tons of people to bring their capital to the table. When we have a real hard crash suddenly the system won't pay out and it will be over.
Awesome analysis that we really need to hear sometimes, especially in a sea of non-stop positivity and bullish attitudes. I think I might sell 50% of my Holdings and take some profits now.
Thanks for the comment.
Yeah a lot of stuff I see out there is always "Buy the dips" and "This is a good opportunity to buy" And oftentimes that can be true to a certain respect but I can tell you that in the last crash in 2013/2014 everytime you thought that there was a solid base forming and that it was going to recover it would ultimately just keep going down. It wasn't fun at all.
As fast as this is falling and the Chinese could be just waking up to more news and start fire selling.
It might got under $2,500 real fast. But I really don't know. Do what you think is best for you.
Thank you @brianphobos for your post. As I am only starting to understand crypto world, you are helping me to understand it a little bit faster. :)
great post.
Thanks for stopping by!
amazing ur post
Good luck@brianphobos👍👍👍