Will tomorrow be the day of Crypto reversal? Are you bullish/bearish? OR Will it be a dud like Consensus?
If you are invested in cryptocurrency markets, you must have heard about this theory already - Major price high lows for bitcoin, since the Feb 06 low have been on the 06 of a month. The chart below explains it very well -
Source: Coindesk
This is has led many to believe, that 06 June, i.e. tomorrow will be a major turning point for bitcoin and mark the end of the short term correction or bearishness in the market.
Now, I am neither bullish nor bearish as I am not a trader. I think Bitcoin is a phenomenal innovation and I have invested for the long run. Luckily, I invested around the December 2017 high, so the initial panic after the bear market is now gone and the volatility in bitcoin does not bother me much. In fact, before I invested in bitcoin, I was already aware that the currency is volatile but it was very different experiencing it than just knowing about it.
Volume has been low in these markets and that again is a good or a bad sign, depending on your analysis. It could be good if one assumes that bears don't have enough power behind this correction, and buyers are using this opportunity to build up their bitcoin position. On the other hand, it could be bad if you think volume is low as there are no new buyers.
June is interesting for another reason. Remember all the news about Goldman starting a crypto desk in June? This month will also prove whether that is coming into existence and should be bullish for the currency. However, its still money going into futures and till now, no regulated entity is buying bitcoin, at least that is what I think. To me, any theories of banks already buying millions worth of bitcoin is conspiracy theory because banks would have had to report these assets in their annual reports and also hold capital against it, as required by regulation (Banks need to hold capital against risky assets).
What I think is that this theory might be another dud like the Consensus bullshit. Because besides the date, there is no fundamental or technical reason why the trend should change. Never in my professional life have I seen theories like these appear and I see no reason why such theories should be relevant for crypto markets.
What do you guys think? Are you bullish about tomorrow? Do you think there are other reasons why bitcoin might pump this month - any banks getting into crypto, regulation or simply the fact that bitcoin is cheap. Let me know in comments.
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