BTC & Crypto: Is now the time to buy?
With BTC prices hitting a major support level just above 6k it is worthwhile to ask:
Is now the time to buy?
The answer to this is question is perhaps not as clear as we would like it to be. At present, I see no reason to say "the market has finished with capitulation". Yet, at present, I see no reason to say the market should go dramatically lower.
In other words, a sideways see-saw market for the summer is what I am expecting to see at this point.
The only way we would conclude "now is the time to buy" is if we were very certain that the 6k support level holds, and we were also very certain that the market will propel higher with vigor and speed. I believe there is better than a 50% chance that the market holds the 6k support level. I might put the odds at 60% which is not amazing odds. But it is the second condition where I do not anticipate that the market will propel higher with vigor and speed to previous market highs. I would put the odds of this at about 20%. I believe it is more likely we have a sideways see-saw motion, or just a new low.
To put it more plainly, for how I see the present market:
20% chance the market propels to prior market highs
60% chance the market goes sideways until fall
20% chance the market tanks below 6k BTC price
In other words, for long-term investing, there is only a 20% chance investing at this point will be profitable over the next 3 months. Certainly, I expect a bounce in the market. As a trader, a person might buy now, put in a tight stop-loss and wait, and then sell when the market hits 8k BTC again.
As a long-term investor though, this strategy may not be worth it. A person who buys now, may buy and ride BTC (and the market) up to 8k, but then ride it back down to 6k or even lower. I also favor that it may not be worth selling anything at this point as well. I sold some holdings at 10k BTC, but now I am not looking at selling, only buying if the market decides to really crash below 6k BTC.
The Sensible Position
Wait and see.
Waiting and seeing what happens seems best to me. If the market decides to go for the recovery where it is going to speedily head higher, this should be identifiable to us during the price rises. We should see a renewed market attitude with a great deal of skepticism, rather than a hopeful bounce that is unlikely to hold. Waiting and seeing avoids any unlikely (but possible) major crashes lower. Waiting and seeing does not have us buying into market doldrums of no activity. I'm willing to miss a 10% or 20% move in price if it means I am buying at the right time, rather than buying at a time that is seemingly not opportune.
@crypto-investor You have earned a random upvote from @botreporter & @bycoleman because this post did not use any bidbots.
It all depends on your risk tolerance and if you can afford being without that money. Great risk = great rewards but also great pitfalls no one knows you would just be betting that it would go up based on what you know. Speculation
I thing this time for buy
Great advice. I agree, I’m expecting some prolonged sideways action.
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Great to have you back @crypto-investor, I reckon your 60% chance of sideways price action is rather optimistic, the Tether scandal suggests that the price of BTC got immensely inflated during the 2 years bull-run and Google Trends shows there is no new money entering the space to support current price. Unless big players agree that $6400 is fair price for BTC and start accumulating I think we'll continue to go bear for a while.
It's a fundemental factor, but the 1 USD peg for USDT wouldn't hold at 1 USD unless it could be exchanged for 1 USD through their mechanism. So the exchange has held because USDT is priced at 1 USD. Meaning, if USDT is a bubble because they've faked it, eventually they'll have to stop exchanges into USD because they wont have any.
It might be worth a temporary panic, but the crypto market is bigger than USDT. The value in the market exists apart from one company doing the USDT stuff. When a market blows up there is always stuff that goes belly up with it, but it's never a big deal compared with the prevailing purpose of that market if it is investment worthy.
That all said, the article I read is proposing that the entire market was faked through USDT issuance... the problem I have with this idea is that USDT is still holding at a 1 USD peg. It couldn't have bore that much weight without breaking USDT itself. It's worth calculating out the math, but if you just flood funny money to create a BTC bubble in the billions, then this would also create hundreds of millions of dollars in redemptions as when they go flooding USDT on the market by buying BTC, those people purchasing the USDT would need to do an exchange into USD to make their arbitrage profit. If it was funny money, they would then not be able to. If they were not able to, they would stop supporting the USDT prices on the markets, and it would have crashed already, if the entire BTC market was made from funny money.
But a "wait and see" approach accommodates for what you're anticipating. If we're wrong and we find ourselves in a bull market, it's easy enough to change our minds.
This was the article I read: https://www.financemagnates.com/cryptocurrency/news/analysis-bitfinex-tether-still-close-comfort/
Thanks for the link @crypto-investor, you raised some fair points about the value of Tether holding up. Tether aside, I reckon the other problem in the market is overvaluation and dilution of assets, based on the numbers aggregated in DappRadar, most crypto Dapps only have a very small number of active users yet have market caps in the millions of USD. There is no way those dapps are making money and can justify such high market caps, once their ICO money runs out they'll go bankrupt and token money will probably return to Bitcoin/ETH but right now the market is still very diluted and need a crash to bring their value back down to earth. Cheers!
Well in this year its the first time that is happening that people are now afraid to buy at $6k these were the same who wanted to buy more when it went to the low this year after the high in jan time changes quickly but seems like it might fall a bit more
Yes because we're actually getting real capitulation. It's a normal market phase. It means we're near the end of the bear market phase. May be more to the bear market, though, but long-long term buying now should be good I just don't suggest buying usually, unless it's pretty certain in my book.
that's a great comment to read today specially coming from you seems like good time is about to start in crypto again :D
It is,
if you have a surplus of money.