Why I'll Sell Bitcoin if it Reaches $17,000 Soon
Bitcoin touched $10,500 yesterday and bounced back with ferocity. At the time of writing this, Bitcoin is currently sitting at around $15,000. Is this Bitcoin recovery healthy? In my opinion, it isn't.
The reason I suspect this isn't a healthy recovery is simple - it happened too swiftly and too strongly. I believe, from a psychological perspective, that dead cat bounces occur because people FOMO into a recovery with little faith in the price of the underlying asset (Bitcoin in this case) which leads to a nice pump. But when selling occurs, everyone says to themselves "I knew I shouldn't have bought!" and they all panic for the exits.
As such, I will sell a decent portion of my Bitcoin if it reaches $17,000 as there is significant resistance at that level. The reason I'm not selling immediately is because Bitcoin continues to defy my expectations, generally to the upside, so I will give it an opportunity to rise higher. In the event it comes down prior to that level, I'm prepared to hold (or buy if it goes low enough).
In the event it skyrockets (say up to $30k), then I'll provide updates on my expectations and entries. But for now, these are my thoughts on the market. As for altcoins, I still prefer Bitcoin over them given dominance has reverted back to 43%. I will continue to generally prefer Bitcoin until dominance reaches around 50%, although I will provide an update if my mind changes on this for any reason. As such, I believe selectiveness is more important than ever with altcoins right now.
Let me know your thoughts on the markets below - I'm happy to hear them!
Great thoughts and reasoning as always. I was thinking about bitcoin dominance on the market the other day. What if people realized that there are a lot of other currencies which are also worth buying? Bitcoin being the most expensive, "useless" for paying because of high fees and slow transactions, might not be the best coin to buy. It is actually only good for long term investments, not for every day use. "Digital Gold", as we all heard it already. What if people want useful coins to buy? Coins that are on the news not only because some big financial company bought in, but because of something interesting happened to them, like develeopment in their technology, new wallet, more possibilities, etc... can be more attractive. If you have a coin as an investment and you can use it in your every day life, say buying a cup of coffe, you have a good reason to pick those coins over BTC. How about bitcoin's dominance being under 50% or even around 40% or less in the long run, instead of around 60%? I think that scenario is very possible and healthy.
I don't think people want 'useful' coins or we'd see much higher transaction numbers in altcoins than we currently do and we wouldn't see cryptocurrencies that are just ideas with no products have valuations over $1 billion.
I think they do want useful coins, there are just not many ways to make use of them.
Thank you for providing such insightful perspective. I'm following your youtube channel for a while now and this is my first comment here so I hope you find the time to read it. I have many questions since I'm new to crypto space but for now I'm gonna stick to the point.
like every other human I might be making a huge mistake, however the way I perceive the market behavior, it seems to me that most of the big players who benefits from the price going up were scared of the bull run we had recently and they themselves catalyzed the process for a correction. the same people who are believers in the bitcoin brand and the underlying technology as well as future potentials of the whole blockchain industry. I know there are gonna be major sell offs as always, however, I think corrections in the market will recover and we see new capital flow no later that late January. this is mainly because I don't see substantial capital escape from the market and furthermore, I think most of the profits made by sellers is gonna attract more capital simply due to holiday gatherings and people talking about the bull run of past year. this in turn will further increase the confidence of the original sellers in the cryptos they sold and brings them about to re-invest, pouring the lost capital back into the market.
On another point, as a member of the community from middle east, I can tell you that a lot of capital is waiting to enter the market from all these countries that you might not think about them. I myself have many limitations purchasing even bitcoin or ether simply because there are very few providers in my country and for the last month there has been close to no supply at all. Now think about the holiday events that I talked about. The news will articulate around the world face to face and after a while new members will join the network. As a member of academic society in my country I meet many friends coming to visit during holiday season. If I tell them about my investment on verge and how it 40x ed after a month, I don’t think they can resist the temptation to create a wallet and throw 50 bucks when they get back from vacation. I know I’m not gonna fomo people in to buying, however, I suspect many people will. This all is relying on an assumption that bitcoin does not lead us to a bear market in coming days as you mentioned before.
My opinion about bitcoin is that as long as we see potential for further network growth, the bull will beat the bear and taking advantage of the dips seems rational to me. I apologize for my long comment. I'd be glad to hear your response
It's interesting hearing about other countries because you're right, I generally only think about the 'big' capital providers but there are plenty of places to add additional liquidity to the market which will help prop up price.
Most of what you have mentioned in your comment (about new people being dragged in from price going up) is exactly what has caused Bitcoin to rise so much in the first place. So while it is a valid argument, there does have to come a point where it stops because it is circular logic (price is increasing because people see price increasing). It's called momentum, and I'm not saying that it will stop soon, but it is worth noting that that particular catalyst does eventually run out of steam. Thank you for taking the time to comment!
So you're holding all your BTC on GDAX and go directly to fiat ?
I've got some btc on exchanges from selling altcoins (and ready to buy alts, when something dips big time) and some BTC on GDAX.
I guess it would be too complicated to sell all of my bitcoin, so my 'strategy' is to hold the amount of bitcoin I have on the other exchanges and trade the btc I got on GDAX for fiat..
Is this possibly what you're doing as well ?
How does this approach sound to you ?
btw, everyone's bitching about how negative you are in your videos... total bs.
There's a difference between being negative and rational, straight to the point, providing solid facts and opinions. Thanks!
I have a decent amount I leave on exchanges just so that it is fully liquid, because often when you need to sell / buy, that is when the exchanges are the most sluggish and it is difficult to transfer in.
First off, I would like to commend you on your videos, not only in their content but also in their timing. Though you cannot hold someone’s hand or even offer much sought after comfort in the real world of speculation, a calm, even monotone voice of reason is something most welcomed.
I agree with your assessment and think that Bitcoin will continue to correct over the holidays and move back up aggressively around 1/15/2018. There are a lot of eager investors (speculators) who have yet to get their accounts funded, wanting to ride the next wave.
That being said, let’s talk about something that I believe to be very interesting. As I took the time to go through the very, very long process of obtaining a Coinbase account, which now seems light speed compared to that of Bitstamp, I began to look for other was of investing (speculating) in crypto currency. My search led me to GBTC. I have a brokerage account so it was almost an instantaneous process to buy shares of the fund. My thought was that I could get in the game while I was waiting for my bank funds to show up in GDAX. I had done some research and found the fund produced about a 1600% return over the last year, which was indeed lower than a direct investment in Bitcoin, but still pretty good. I have read all about the horrible things that could happen to the fund but have chosen to place some bets there regardless.
I have found that on a buy/sell cycle I can double my money just by following Bitcoin. In a 7 day period, $7500; Bitcoin buy in @ $17500 and sell off at $19500 would yield about $800 in increased value. That same amount of money placed in GBTC just about doubled. I have done this more than a few times with the same results. I wanted to get your take on the topic and would be most interested in what your thoughts are in the long term viability of GBTC.
Thanks and keep up the great work!
GBTC is a double play - you're not just betting on the price of Bitcoin, but also the premium to net asset value (NAV). So you really want to try to line up both where you buy Bitcoin at a low AND GBTC at a low premium to NAV and hope to capture both a rise in Bitcoin AND the premium. It's an odd instrument that I wouldn't recommend to most people, but if you know what you're doing it can be a nice play.
Could you explain the correlation between Bitcoin dominance and the timing to invest in altcoins?
I don't fully understand why it's more favourable to invest in altcoins when Bitcoin's dominance is 50%+ (in your opinion).
It's simple - when Bitcoin's dominance is higher, altcoins have moved out of favor. When they go out of favor, there is more room for them to increase when they come back into favor. It's just another way of saying 'buy low, sell high' except instead of comparing altcoins relative to USD, we are comparing it to Bitcoin.
I think by the end of this entire fiasco, bitcoin (core) will hold 25-30% of the entire cryptocurrency market. This will not happen for probably another year or two though.
Have you seen any well-documented empirical evidence for this inverse correlation? I hear it often so I'm sure it has at least some merit, but I'd like to see some concrete data supporting it.
The past couple of months, I have often (but not always) witnessed Ripple (XRP) and DASH, being inversely correlated to BTC in terms of price. DASH often holds, or even grows when BTC falls. Except the recent correction this past week, where only Ripple held close on to its recent gains.
Great song! One of my guilty jams when it comes on in car.
lol...such an appropriate song to describe what has been going on this weekend:)
Hello, Could you make a video about how they manipulate the orderbook on the Gdax? And how we can spot it and what we should do when somebody is manipulating it. Thanks in advance!
Maybe in the future I'll record the order book for a while and watch through the footage painstakingly to find moments where it is manipulated. I haven't read it yet, but I think Bitfinex'd did an article recently about price manipulation on GDAX. He sometimes goes a bit too far with his theories, but he has a lot of good info so you pull from it what is useful.
Good to find you here in steemit land. I enjoy your logical, unemotional analysis on You Tube .... but in future will watch it here where I can throw you a tip {grin}. For the record I hold BTC for long term (2 year horizon) but should it hit $30k in the next month or two I shall definitely liquidate.
Keep up the good work !!
Thanks for stopping by magus, I appreciate it!
Actual picture of me...
