Bitcoin back below $7,000

Adam Taggart
By Adam Taggart on Mon, Jun 11, 2018 - 11:51am

The crypto complex lost $25 billion overnight:

Bitcoin is back below $7,000. It has now lost 2/3 of its value compared to last December's high, and continues to follow the classic "popping bubble" curve:

With its latest drop, Bitcoin has broken below its support trendline (see the red candle dropping below the white line at right), suggesting lower prices are ahead:

The price drawdown is widespread across the entire crypto complex, with alt-coins liks SALT and Monero getting pounded to all-time lows for the year, as well. 

Analysts suspect this recent weakness is due to several factors, including:

  • A South Korea-based exchange, Coinrail, was hacked, leading to the loss of $40 million in alt coins
  • Weak trading volumes over the past month, a potential indicator of waning interest
  •  The CFTC has launched an investigation of whether big players have been manipulating the market

This appears to be a critical moment for cryptos, given that they're back at their lows for the year. If they crack even lower from here, how much father could they fall? Some technical analysts indicate the next potential support zone is all the way down at $4,000.

101 Comments

pat the rat's picture
pat the rat
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stocks/bitcoin

With the stock market being protected by the fed,bit coin market mght be a subatute for it ? 30 yeaars, 60 years,90 yeras 1generation, 2generation, 3generation who knows.   

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I guess I am in the camp of

I guess I am in the camp of bitcoin should be digital money. It should have all the qualities of money with the extra advantages of taking out the third party if desired and being divorced from a particular country. In my opinion btc no longer functions as money effectively. I will be looking for use-ability in my digital money as this space continues to grow and change and always with a mind toward freedom. 

New_Life's picture
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6k within a week?

Possibly a small rally for BTC and then a further dip below here looks a real possibility in the next week or two.

SALT hit $1.15 this morning, Monero is now a third of its value in early March.

Mohammed Mast's picture
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BTC

At least $5700 maybe lower. Great buying opportunity.

Adam Taggart's picture
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Further to go....(?)

I cautioned back in December that Bitcoin and the crypto complex at large were likely caught up in a massive speculative bubble, perhaps the most aggressive one in all of history.

If indeed the case, we could expect a retracement similar to the 'classic' bubble curve seen time and time again as speculative manias have unwound.

This chart maps Bitcoin's price action vs several of history's largest bubbles. You'll see it has been right in line with the others so far -- and note that this chart is from April. Bitcoin's price has dropped further since then:

It's increasingly looking likely that Bitcoin will continue following this classic retracement curve as the remaining speculation drains out. As mentioned in my original post above, technical analysts are predicting that ~$4,000 is the next support level, and then if broken, ~$2,000 after that.

As painful as it may be to consider for current crypto holders, the classic bubble retracement suggests that $2,000 is certainly possible.

Will Bitcoin get that low? Who knows? At some price, enough investors will feel comfortable putting money in at a volume that will end the descent.

If the price indeed gets close to $2k, I'll definitely be one of them.

New_Life's picture
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The biggest ever bubble...

Plenty of Fraud got it to $20k... 

If as Mark's says Tether (and presumably other fraudulent manipulation) is now "Too Hot"...

How will BTC fair for the next year or two without it?

https://cointelegraph.com/news/research-tether-bitfinex-manipulation-rea...

mrees999's picture
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Fun times, except for the people purchasing in the last 6 months

Trying not to catch a falling knife, but people in my circles are licking their chops at a chance to double down when it bottoms. I suspect it could be at the point where it is no longer profitable to keep mining. That current fixed cost is about six thousand per bitcoin. It has reached that parity once before and bounced back wildly.

Remember there are boatloads of industrial financial powerhouse groups working the back rooms getting the necessary regulation for asset custody, ETF and much more. Almost all investment so far is retail. Industrial purchasers will dwarf those numbers. You can't use Google trends to predict this behavior as a privileged few will be the one percent with most of the cash to make the deals.

The market is maturing. Remember this whole asset class isn't but a five year old. This is all child's play so far. Just think what can happen once the "adults" start to play in this new asset class.

You ain't seen nothing yet.

New_Life's picture
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Adults are already here.?
mrees999 wrote:

Trying not to catch a falling knife, but people in my circles are licking their chops at a chance to double down when it bottoms. I suspect it could be at the point where it is no longer profitable to keep mining. That current fixed cost is about six thousand per bitcoin. It has reached that parity once before and bounced back wildly.

Remember there are boatloads of industrial financial powerhouse groups working the back rooms getting the necessary regulation for asset custody, ETF and much more. Almost all investment so far is retail. Industrial purchasers will dwarf those numbers. You can't use Google trends to predict this behavior as a privileged few will be the one percent with most of the cash to make the deals.

The market is maturing. Remember this whole asset class isn't but a five year old. This is all child's play so far. Just think what can happen once the "adults" start to play in this new asset class.

You ain't seen nothing yet.

Mark, agreed on the Google trends being ineffective for capturing Wall Street purchases.

Where did you get the statistic of approx $6k for fixed mining costs, the figures I've seen vary quite a bit depending on location. Even in the US it can go from $3k to $9k

https://www.investopedia.com/news/how-much-does-it-cost-mine-bitcoin-aro...

I believe $4k area could be a possibility, especially as "Adults" are already playing to short it further. That could put some miners out of business, possibly forcing them to liquidate their BTC positions and further drop the price.

There's also possibility of longer-term price suppression by "Adults" to consider, if Gold & Silver can be kept to near production costs why can't BitCoin?

I like Chris'es latest podcast guest, Ronald saying Cryptos & PMs are bedfellows rather than enemies, think you'll enjoy it if you haven't heard it yet.

Good to see you contributing on here still, looking forward to the next chapter of your Blockchain series (in between you enjoying retirement)

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fun times
Fun times, except for the people purchasing in the last 6 months

"Well except for that, Mrs Lincoln, wasn't the play amazing?"

We can all see that retail is slowly dribbling out of bitcoin.

As I like to say, we don't know what kind of asset class bitcoin really is.  My gut tells me its a risk asset.  Currently, we're in a risk-on environment, and so bitcoin is moving counter-trend to that because of its  most recent bubble pop.  The 6k level seems important - it has bounced off that twice, but each bounce has been progressively less enthusiastic.  More likely than not, 6k will fail at some point.

Will buying this particular dip to 6k work out the same way the other two did?

Bounce #1 peaked out at 12k.  Bounce #2 peaked out at 10k.  Maybe this one will bounce to 8k.

Or it might just break down through 6k.

My sense, based on bitcoin's past behavior, is that we need to see the thing move sideways for a time before the chop-licking (or the knife-catching) by the whale group will be rewarded.

So far, we're still in the descending triangle pattern.

And of course if the world moves into a risk off mode due to a recession, I think bitcoin craters - with a caveat being the imposition of capital controls could rescue bitcoin as an escape hatch.  But if things get bad enough for capital controls to appear, the volatility in the coin space probably increases dramatically.

I know that Mark is hoping for an institutional Deux Ex Machina to rescue bitcoin from ugly chart and fleeing retail buyers.  Maybe that will happen.  Then again, those "goldman traders spending their bonuses on bitcoin" didn't work out so well for the traders, did it?  Promises of a secret, behind-the-scenes Deux Ex Machina getting ready to pump bitcoin higher...well it sure makes for an interesting story.  But I'm still seeing Tether fraud.  I don't think that shoe has dropped just yet.

That's my two cents anyway.

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Retail trading increasing.... & those Goldman traders

Retail trading increasing in countries in dire straits...
https://btcmanager.com/volatile-bitcoin-more-stable-than-venezuelan-curr...

Interesting article on price suppression...
https://steemit.com/bitcoin/@supercrypto1/4th-dimension-bitcoin-manipula...

Also Dave, "Then again, those "goldman traders spending their bonuses on bitcoin" didn't work out so well for the traders, did it? "

How do you know that? Why assume they went long? Surely the best traders make money when the price goes in either direction, there's tons of long AND shorting opportunities in the price action we've seen already this year.

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assumptions

NL-

I assume that the goldman traders were supposedly going long because Mark said that they were spending their bonuses on buying bitcoin - not spending their bonuses on selling bitcoin short.  Mark said this in an attempt to make a bull case for bitcoin.  It was clear to me from context - if memory serves, of course.

Of course Mark can correct me if he meant something different.

"Goldman traders were spending their bonuses piling into the short bitcoin trade"

Yeah.  Mark wasn't saying that.  That I remember, of course.

I do see a slight uptick in google trends interest in both ethereum and bitcoin in the past week.  It isn't a big move, and it is moving up from some very low levels, but it is improving.

I'm also seeing my reversal code was recommending a buy around 6300 two days ago - after which it said to sell around 6500, but still...it is the first strong buy signal I've seen in 2 weeks.

 

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Cryptocurrencies are worthless, apparently

When TPTB start squealing about a new asset class you're know that they're running scared, and conversely that the asset creators are doing something right.

 

An "assessment" of cryptos issued today by the BIS is reported here. I think someone's made a mistake. Some researcher has foolishly substituted "Bitcoin" or "cryptocurrency" where "fiat" should appear instead.

 

Excerpts:

1. "Cryptocurrencies are not scalable and are more likely to suffer a breakdown in trust and efficiency the greater the number of people using them". - I think you mean fiat, sir

 

2. "For any form of money to work across large networks it requires trust in the stability of its value". - Again, I think you mean fiat, sir.

 

3. "Trust can evaporate at any time because of the fragility of the decentralised consensus". - Yet again, I think- ...hey, are you listening to me?

 

4. "The BIS’ head of research, Hyun Song Shin, said sovereign money had value because it had users". - That's how we're defining 'value' now, is it.... users? Kim Kardashian's Twitter page also has users.

 

5. “Not only does this call into question the finality of individual payments, it also means that a cryptocurrency can simply stop functioning, resulting in a complete loss of value.” - You haven't studied the history of fiat even to a small degree, have you? 

 

6. "Without users, it would simply be a worthless token. That’s true whether it’s a piece of paper with a face on it, or a digital token,” he said, comparing virtual coins to baseball cards or Tamagotchi. - Yup, righty-oh. A banknote is completely different then.

 

7. "The dependency of users on so-called miners to record and verify crypto transactions is also flawed, according to the BIS" - Really? So a solid blockchain platform and 1,000-or-so verification nodes across its network are all simultaneously wrong? Have you reported this to the network(s) in question? [They may be blissfully unaware of it.]

 

8. "Agustin Carstens, general manager of the BIS, has described bitcoin as “a combination of a bubble, a Ponzi scheme and an environmental disaster”. - Now I know you're definitely not listening. Refer to my response to item 1 above.

 

I don't know whether to cry hysterically from laughter or fear [about the fact that the fate of our collective financial future is in the hands of some of these bloody doughnuts].

 

Mark - should I keep stacking? cheeky

 

 

 

New_Life's picture
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OMG, sliced in half

OMG now under $9.

It's now lost more than 50% of its value since Mark suggested we "Watch it very closely" just a couple of months ago...

Like many alts, (including SALT) it could be bottoming out here, all rides on whether BTC breaks below 6400 and lower support just under 6k.

If BTC breaks 5800, this could get really fugly.

New_Life's picture
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Cool HODLing

In fact not cool, but COLD.

This stat is pretty amazing.  If its true I reckon its approx 8% of all BTC being held in Cold Storage. 

Now that is serious HODLing.

https://dailyhodl.com/2018/06/17/crypto-pioneer-protecting-10-billion-in...

mrees999's picture
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Cost of mining

The latest estimate for bitcoin mining was mentioned by Tom Lee with the Fundstrat research group. He mentioned $6,000 estimate as of a few weeks ago.

I need to get back to writing those blockchain education posts.  I just made another trip back from Sturgis (I go in June to avoid the crowds for the August Rally). Picked up a nice Indian Scout Bobber this time.  Too painful to ride 800 miles back home through huge thunderstorms, so bought a Goldwing to go with it. (Bobber is being shipped).

Seems like every time I go to Sturgis we have a price tank.  Correlation = Causation? 

 

;-)

 

 

 

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Welcome to my world

Haha, These comments are in a loop for the last five years. Read Bitcoin Obituaries (google it). These are all recycled from when bitcoin was less the $10.00 -  any. day. now.

He forgets to mention that currency is only one use. There are around 500 use-cases for blockchain so will all tokens suffer the same fate?  Perhaps he should google 'web 3 technology'.

 

I'm still stacking.

 

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Welcome to my world

Haha, These comments are in a loop for the last five years. Read Bitcoin Obituaries (google it). These are all recycled from when bitcoin was less the $10.00 -  any. day. now.

He forgets to mention that currency is only one use. There are around 500 use-cases for blockchain so will all tokens suffer the same fate?  Perhaps he should google 'web 3 technology'.

 

I'm still stacking.

 

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Bitcoin crash (with popcorn)

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An oldie but goodie

That was recorded in 2014.  

To continue:

 

Then another time, in January 2017, it finally went back to $1200 before it CRASHED all the way down to $750.

 

Then another time, in December 2017, it went all the way to $20,000 before it CRASHED all the way down to $6,200

 

If you are worried about bitcoin crashes, don't buy bitcoin.

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Those sneaking Goldman's buyers

My context was that they were buying - but this was clearly antidotal evidence. This was a non-randomized poll involving people we knew and we might have held some influence on some of their decision-making opportunities.  It is also possible that the reports coming back to us were exaggerated at that time.

 

As far as what kind of asset to consider... Is it safety?  'Short' on the dollar? Technology position Tech(like) stock?

For me, when it was all about bitcoin (no mention of blockchain back then) - it was 100% safety\alternative. I clumped this with precious metals very early (2013) - some are just coming around to realize that now.

Then in 2015 when ethereum had its crowd-sale (now commonly referred to as an ICO) it became 50% safety and 50% new paradigm tech.

As a currency - they are slow to catch on and not liquid enough. But if there is a run to safety like we see in many countries where they are tipping towards hyperinflation, I can see that use-case gaining traction. Other more flexible payment systems like DASH are much better right now at performing currency-like transactions but it doesn't have any critical mass to move it.

So we had currency, and hi-tech, both carving out space in the asset class, and I see at least two more major categories developing that might take the majority of the pie even yet.  These new broad categories are even bigger, but 99.99999% of the world doesn't know it yet.

These talking heads are still stuck in 2013 when they analyze only currency use-case. That can't yet imagine the paradigm tsunami that going to make their jobs obsolete within a decade.

 

 

 

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BIS Turkeys
locksmithuk wrote:

When TPTB start squealing about a new asset class you're know that they're running scared, and conversely that the asset creators are doing something right.

An "assessment" of cryptos issued today by the BIS is reported here. I think someone's made a mistake. Some researcher has foolishly substituted "Bitcoin" or "cryptocurrency" where "fiat" should appear instead.

Found on the internet.... LockSmithUK - thought you'd like this....

The Bank of International Settlements saying Bitcoin is bad is like turkeys releasing a research paper about all the reasons Christmas is a terrible idea

 

New_Life's picture
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Mining Costs

Tom Lee's interview talking mining costs, all very generalised statements IMHO

https://cryptocoinspy.com/tom-lee-talks-bitcoin-crypto-mining-btc-price-on-cnbcs-fast-money/

Yet to see any really detailed research from FundStrat on the mining costs (probably only available to clients).  I'll keep hunting, meanwhile did find this.. 
 
I suppose a US average could be around $6k, still plenty of room for BTC to go lower to $5k (or $4k) in the next month or so and give the expensive over leveraged miners a moment of concern..
 

 

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Turkeys and bitcoin
New_Life wrote:

Found on the internet.... LockSmithUK - thought you'd like this....

The Bank of International Settlements saying Bitcoin is bad is like turkeys releasing a research paper about all the reasons Christmas is a terrible idea

 

 

Aye, I do! It reminds me of something which was overheard coming from the house where Bitcoin lives -:

 

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Sweepstake...?

Okay for a bit of fun how much lower than $6k do we think this will go in the next week?

I'm going to guess around 5.2k.. any takers for lower?

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Catherine Austin Fitts belief on Bitcoin

I'd be curious to hear what others think abuot Catherine Austin Fitts' comments on Greg Hunter's USAWatchdog re Bitcoin, starting about 30 minutes: Elite Stole $50 Trillion and Will Invest in Space

.  If I got it right, she thinks Bitcoin was an experiment, a prototype by the elites to test out and learn more about moving to a digital currency. She believes their goal is to move to a digital/cashless society in order to have the ultimate control over people.  Interestingly, Catherine's connection dropped soon after she started talking about this.

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Bitcoin Just Broke Below $6,000

Important development: Bitcoin just dropped below $6k (9:40pm PST Sat) for the first time after hitting it's all-time high near $20,000 in December.

This after several days of failed rallies for BTC.

As I've reported earlier in this thread, many technical analysts have seen $6k as a critical support level that, if breached to the downside, could see Bitcoin and the rest of the crypto complex drop a lot lower -- some predicting $4k as the next resistance level.

Will that be the case?

Tomorrow will be a key day. And we'll be watching the action closely.

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Bitcoin Market Cap about to drop below $100B

5 minutes after writing the last post about Bitcoin breaking below $6,000, it's now down to $5,900.

This is important because Bitcoin's market cap is now threatening to break below $100 Billion (currently at $101 Bil) -- a psychological milestone likely to depress enthusiasm for holding BTC (and cryptos in general) even further.

BTC has now lost more than $200 Billion in market cap since the beginning of 2018. Could it lose even more?

Quite possibly.

With the breaking of $100 Bil, a lot of speculators may be less enthusiastic than before about trying to catch the falling knife...

New_Life's picture
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All eyes on tonight's weekly close (Sunday 23:59 UTC)

The current area of $5.8k correlates with a previous strong Weekly close on 6th Nov after which another Tether fuelled boost shot BTC up to new heights.

Will this area hold?

It's looking weak right now, price has already wicked below the weekly close of 5810 if I get chance I'll post up a chart when I'm next in front of a PC, hard to see the strength of any bullish divergence forming on a phone.

As I mentioned above I'm targeting areas below here, the first of which is $5.2k area...

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not to pile on...

Not to pile on or anything, but one phrase sticks in my mind: Mark said that a bunch of bitcoin whales were licking their chops as bitcoin was dropping towards 6000.

But I got to thinking: if you are a bitcoin whale, what do you use to buy more bitcoin?  Presumably, if you're a whale, that means you already own an absurdly large amount of bitcoin.

Alternatively, if you owned bitcoin before, and then you sold it on the run to 19k - are you still a whale?

So I thought some more.  If you are heavily long bitcoin, and you have dutifully sat through the drop from 19k down to 6k (HODL!), you are almost certainly not licking your chops.  You are probably doing something else entirely - such as rueing the day, kicking yourself, re-thinking the whole HODL concept, wishing you'd sold more at the top, and so on.

Of course if you're a former bitcoin whale (which we might call a fiat-whale), then you could well be doing some chops-licking.

Just some musings as we break $6k.

I must admit, I do find myself doing a bit of chops-licking at these levels, being a fiat-minnow.  I'm trying to upgrade my reversal code to give me a hint as to when the low (a low?) will occur.  The trend-following code is largely useless due to the rampant manipulation, but I'm hoping that the reversal code will be able to learn what the bad guys are up to.

 

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Catherine Austin Fitts = old news...
pinecarr wrote:

I'd be curious to hear what others think abuot Catherine Austin Fitts' comments on Greg Hunter's USAWatchdog re Bitcoin, starting about 30 minutes: Elite Stole $50 Trillion and Will Invest in Space

.  If I got it right, she thinks Bitcoin was an experiment, a prototype by the elites to test out and learn more about moving to a digital currency. She believes their goal is to move to a digital/cashless society in order to have the ultimate control over people.  Interestingly, Catherine's connection dropped soon after she started talking about this.

She's been suggesting a similar thesis for a while... Seen previously on Greg's site...

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Gold "death cross"

ZH reports several indicators where a trend has turned down:  EM Market Stocks, the Global Most Systemiclly Important Banks Stocks, Chinese stocks, Bitcoin and now Gold.

The 50 day moving average dropping below the 200 day moving average (the death cross) suggests a change in trend to downward.

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Bitcoin Market Cap now under $100 Bil
Adam Taggart wrote:

5 minutes after writing the last post about Bitcoin breaking below $6,000, it's now down to $5,900.

This is important because Bitcoin's market cap is now threatening to break below $100 Billion (currently at $101 Bil) -- a psychological milestone likely to depress enthusiasm for holding BTC (and cryptos in general) even further.

BTC has now lost more than $200 Billion in market cap since the beginning of 2018. Could it lose even more?

Quite possibly.

With the breaking of $100 Bil, a lot of speculators may be less enthusiastic than before about trying to catch the falling knife...

Well, moments ago, Bitcoin's market cap just broke below $100 billion. So it's 'game on' now...

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I think you are right.

Looks like "The Powers That Be". Decided that $6k will be the low point. The Whale miners (yet the miners are the true whales) have decided it so. Do the folks at Tether (bitfinex) have the banking to back the tether?  Perhaps they sold their bitcoin for cash to back the tether? 

Having met some of these mining operation folks, I wouldn't be surprised what kind of backroom deals might be going on.  David brought up an interesting point about if they are still considered whales during the times they've divested themselves of the bitcoin. I believe they are because they can then buy tether (or cash) and wait for the moment to rush it back up at the time of their choosing. Plus they continue to mine at a huge profit - they were earning almost $20k per bitcoin at a time where their cost was $3k. 

Manipulated?  You bet. Illegal? Who's jurisdiction? Law is subjective at a world-wide level. If the bitcoin mining cartels are big enough to largely control supply and demand - they are still the whales. Will regulation stop it?  It will be interesting to watch. I do know that they aren't even considering shutting down the mining operations. They've been working to secure power needs for a growing empire through next year at a continued exponential pace.

A lot of people in the industry (insiders) are still calling $50,000 BTC by end of the year. Regulations, forwards, ETFS, custodian of the tokens allows for more Wall Street players \ mutual funds etc to diversify into the new asset class just now teething. If we start measuring market cap in Trillions (with a T) perhaps the whales will get overwhelmed with new money at their next dump and the whale status will be removed. Might it be this opportunity as FOMO again will take its cycle?

It's just a matter of time now.  I think most of the people that have studied this space for some time have removed the question of "If" this market returns. During the various pumps and dumps the strategy of HODL can look stupid or brilliant.  But I have to tell you that spending time riding the canyons on my Indian motorcycle are a lot more fun than sitting in front of a computer looking at charts all day.

Then again, if I was a 100% HODLER, I wouldn't have the time or money to go enjoy those moments so there must balance to all things. 

 

 

 

 

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Last chance?

This isn't financial advice, but to my close friends and family- I've suggested in the past that they do what they can- to aspire to own just one bitcoin if they can afford it.  It's being a part of history and a little diversification. When the price was near $20,000 this was a tall order for most of my friends and family are not wealthy. I also advise to not spend an amount on cryptos that they would lose sleep over if something unexpected happened and it all went to zero (I personally doubt that would ever happen). 

My reasoning is this:  eventually, there are going to people curious enough that bitcoin isn't dead despite many so-called 'experts' predictions it would die dozens of times in the past, but it keeps coming back. That fact is: you really can't kill it.  There is a famous book called "The Spider and the Star Fish" that explains if you cut off a leg of a spider you get a disabled spider. But if you cut off the leg of a starfish, you get two starfish. Bitcoin is anti-fragile and is easily forkable so that one can do what they want to disrupt the network, but people will just fork it and it will go on. Winning the hearts and minds of people is different than the actual network itself. People will agree that the new version is 'bitcoin' and this history will remain intact.

When people realize the benefits and intrinsic value of this network,  and the revolutionary inventions that were started because of this, the increase will be more comfortable with it and will make room in their mind, and in the portfolio to own at least one. While they can. There are only about 17 million in the world. Around 4 million are estimated to have been lost forever in the early days. The inventor (Satoshi) is said to have about 1 million himself as he was one of the only miners in the first year as he continued to tweak it and improve on it before the world knew what it was. He has never moved them - and in my opinion - likely never will (if he's still alive).

We have a few large holders who don't move them, so the liquid amount available is very small relative to all other commodities. If even just a million people in the world give in a decision they want just one in their life, the price is then easily out of reach for all but the super wealthy, and various funds around the world that will hoard them as a store of value which will increase as inflation erodes fiat currencies.  Eventually creating its own gravitational effect - 'eating' bank accounts, checking accounts and so forth as people look for safety from inflation.

 

There will always be critics and bring up a thousand reasons why it won't.  Just like they always have. But they underestimate the will of the people that have found a home in the technology and the ability for it to adapt in ways they couldn't conceive.  It's not the network that you have to defeat, it's the will of the people.  Us.  We've been burnt, lied to, taxed to death for corrupt leaders and bitcoin represents a defiant 'last stand' from the people that have decided that enough is enough.  There are problems with it at this young age. It is manipulated and slow. But it is improving. Sometimes it is in fits and starts but it continues to mature. 

 

Consider if the current price (under $6,500 today) is an amount you can afford to lose, and consider the risk - but also consider the possible reward. Hundreds of thousands?  Possibly more?  This simple fact will eventually seep into the consciousness of enough people that it becomes a self-fulfilling prophecy (in my opinion). 

Is this theory something I just came up with?  No.  I was telling my close friends and family about this eventuality when bitcoin was only $100.00.  I call it the 'curiosity buy'.  Eventually, that bug will get out of control and for those that capitulate to the fact earlier will be amazing the next generations with stories of how they could purchase one full bitcoin at a time when it took more than one to buy an average house. 

That time is slipping away.

 

 

 

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5465
powers that be

Ultimately, the powers that be decide nothing in bitcoin.  All that matters are money flows.

The big rally to 19k had nothing to do with the powers that be, nothing to do with whether bitcoin was a great idea, or a stupid one, and everything to do with a tidal wave of dumb money pouring into the space.

Given that, the only way bitcoin moves to 50k (its a 10-bagger!  don't miss out!) is if an even larger wave of dumb money pours into the space.

Definitely, dumb money can get sucked in by the manipulation shenanigans - which can (and is) used to start initial rallies - but that technique only works in the absence of selling pressure.  In other words, it only works if all the current longs decide to HODL.

Right now, we have a huge amount of dumb money that bought all the way up in 2017.  They were promised bitcoin $100,000, but what they are seeing is ever-smaller rallies and a declining price.  The guys who bought at $3000 and told to HODL (presumably, until $100k) are now wondering if, maybe, they should take their twobagger and go home; many are regretting not selling at 19k, and we know just by looking at the chart, a large number of them have lost the "HODL faith".

"Sure I was told to expect downturns, but this 6-month thing is ridiculous.  I'm out!"

So all those new (2017-vintage) buyers represent selling pressure, and until the selling pressure from them abates, the tether-inspired rallies will just be opportunities for more dumb money to bail out.  And of course bitcoin miners are always sellers - they have to pay their electric bills, and the only way they can do that is by selling mined bitcoin.

So who can stop the downtrend?  Fiat-whales, and dumb money.  That's it.  Bitcoin whales can't.  Miners can't.  Sure, both groups desperately want prices to rise, but they are already long.  Only uncommitted fiat can move price higher.  (Tether isn't large enough by itself to do this).

So how do we know when the selling pressure from dumb money (and probably tax-owing whales) is exhausted?  Well, we could try riding our motorcycles, heaving a dart at the old dartboard blindfolded and trusting that "the powers that be have decreed $6000 is the ultimate low", or we can look at the current chart and see if we can get any clues.

While I dearly enjoy riding my motorcycle (no joke, actually), I think I'll choose the chart approach.

In the 2013 bitcoin crash, the selling pressure had (more or less) been wrung out once bitcoin made its first higher high. I've marked that helpfully below.  Of course, that higher-high didn't hold, but the higher high did signal that the bulk of dumb money had been flushed out from the 2013 10-bagger spike high.

And that's when it was time to start buying the dip - or the breakout.  Buying breakout is safer, because you have a fixed price signal to trade off of and a well-defined stop too.  Buying the dip, you have to guess "how low the dip will go" and just hope for the best.

Anyhow.  Do we see a similar "higher high" signal in 2018?

We do not.  All we see are lower highs, and lower lows.

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charleshughsmith
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Posts: 718
I'd draw in a descending wedge

Dave, I'd draw in a descending wedge on your highlighted area, which is a pretty reliable bullish pattern. But it's all in one's initial bias-- I have yet to see one TA type draw what I consider painfully obvious. Instead, they all draw the same triangle with the base at $6000.  The failure of $6K was therefore supposed to trigger a collapse to $3K.  What happened was a stop-clearing drop to $5780 or so and a quick rebound.

 

davefairtex's picture
davefairtex
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Posts: 5465
what i saw

Well what I saw was a plunge through 6000, and then a manipulative (Tether?) spike which pulled price back above it in short order.  The question I have is, will that spike draw in buyers driven by FOMO, or dumb money sellers looking to get out?

An old teacher of mine said, "trade what you see, not what you think."  Regardless of what you and Mark both "think", on the longer term charts, I do not "see" any evidence that the chops-lickers are winning the battle over the dumb money looking to bail out.

That evidence would be a higher high.

Tether can move prices in the short term, but these Tether tricks will be ultimately overwhelmed by the money flows from the fundamental players.

Mohammed Mast's picture
Mohammed Mast
Status: Silver Member (Offline)
Joined: May 17 2017
Posts: 180
Waiting

i really don't care about the price. I am just waiting for someone to hack BTC. Hell it's been almost ten years.  Conspiracy threorists here ans elsewhere havine been saying the NSA or some such dark figure is going to do it. Well I am still waiting for the virtually unhackable technology to be hacked. There's 100 billiuon reasons to do it.

Oh well I guess we will just have to wait for quantum computing. Wonder what the price will be then?

 

locksmithuk's picture
locksmithuk
Status: Silver Member (Offline)
Joined: Dec 19 2011
Posts: 126
Hacking BTC
Mohammed Mast wrote:

I am just waiting for someone to hack BTC. Hell it's been almost ten years........  Well I am still waiting for the virtually unhackable technology to be hacked. 

 

And then what? / To what end? 

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5465
hacking

And then what? / To what end?

Trolling.  He's just trolling.  Which is why I ignore him.

 

mrees999's picture
mrees999
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 428
Dumb money was so 2017

Each mania and depression has a slightly different story to tell. The dumb money rushes in, then panics and rushes out. Then a new wave of dumb money FOMOS in and then panics out. But what I see in the background this time is slightly different. It is institutional money. 

Perhaps I'm wrong. I certainly didn't make a call for 50k by EOY, just reported what a lot of other money managers have said so I'm just a messenger here. I think in terms of decades, not months. For those that were following my posts here on PP from the beginning and doing as I did, they are all set for life. Despite the 'wall of worry' some people continued to report looking at the charts and dismissed my point of view.  The grapes are particularly sour at times.

What we have in the crypto space is something that defies the triangle chart mentality. I don't know of any chartist that has become crypto-rich as this space has a way of humbling even the best of them. The hordes of Youtube crypto chartist that sprouted up again last winter and fall have gone silent once again.

Now on to important business.  Puerto Rico.  For high net worth people - they offer tax incentives to live there for six months (plus one day) without paying taxes. They want to lure new money and have to incentivize people enough to overcome their high crime rate, the bad poverty rate, the debt problem, and cleanup of a couple of terrible hurricanes. 

So you can get a lot of farmland fairly cheaply and become self-sufficient with year-round good weather (outside of an odd hurricane or two). So, say you're one of those 'set for life' people that were of good fortune to ignore the nay-sayers and follow my lead -  now do you take some of those profits and put them to work as a good Peak Prosperity member might do and invest it in good self-sufficient lifestyle on the island where your dollar goes 50% further (if you live there at least three years)?

Or would the language barrier and propensity for islanders to elect socialist government promises that might allow the corruption to continue enough to keep you out? I could see a winter home possibility. Act 20 / Act 22?  Pondering....

 

 

 

locksmithuk's picture
locksmithuk
Status: Silver Member (Offline)
Joined: Dec 19 2011
Posts: 126
BTC chartists
New_Life wrote:

One particular "chartist" 

 

Csre to share? I gave most of them a wide berth once I listened to the nothingness in their words. So many opinions with no supporting foundation.

New_Life's picture
New_Life
Status: Gold Member (Offline)
Joined: Apr 18 2011
Posts: 339
locksmithuk wrote: New_Life
locksmithuk wrote:
New_Life wrote:

One particular "chartist" 

Care to share? I gave most of them a wide berth once I listened to the nothingness in their words. So many opinions with no supporting foundation.

I follow the evidence, trust the ones that publish analysis and then detailed progress of their trades before, during and after showing Risk/Reward and their profit and loss.

The best ones also gain more credibility with me when they make mistakes, they are humble, own up to it straight off rather than attempting to blame anything or anyone else.

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5465
summarized

Mark-

.... For those that were following my posts here on PP from the beginning and doing as I did, they are all set for life. Despite the 'wall of worry' some people continued to report looking at the charts and dismissed my point of view.  The grapes are particularly sour at times.

I don't know whose grapes you are referring to.  My grapes taste just fine.  :). Perhaps this is strange to you, but my sense of self worth isn't attached to whether or not I bought bitcoin at $10, and HODLed it until 19k.  I get the sense that some people's sense of self worth is entirely wrapped around their bitcoin trades.  Perhaps that's the world you live in.  It isn't my world.

Let me summarize your response:

a) It's different this time.

b) It wasn't me that said $50k.

c) I'm really rich, so you should believe what I say.

d) Charts are useless with bitcoin.

Did I get that right?

I think your ability to HODL is second to none - its sure a lot better than mine, although that's something I'm working on.  I think your advice to buy during this downtrend @ $12k was too early, as New_Life has suggested.  And its also - probably - too early right now, although my code might tell me different someday, so I'm open to changing my opinion on that one.

Mohammed Mast's picture
Mohammed Mast
Status: Silver Member (Offline)
Joined: May 17 2017
Posts: 180
Ignore

Glad to see you are ignoring me Davy. rotflmao

Seriously BTC IS unhackable. The price will be the price with its wild volatility there is a lot of money to be made. That being said that is secondary to the fact that it is a disruptive technology. The early adopters were anarcho/captialists. They saw it as a way to break the power of the banksters. Unfortunately that has been lost to speculation.

Crypto currency has now become a novelty asset class. People try to apply rechnical analysis to it which is a fools errand. it doesn't work because it is not a mature market that is regualted. Yet people with no skin in the game continue to cast stones and try to make inane predictions.. They completely miss the point

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5465
chartists

New_Life-

I should probably go look up that guy with the good track record.  Maybe I could get some ideas from him about what I could code up.  I trust my computer a lot more than I trust my self with these things.  The last buy pick from my code at ETH 400 was pretty solid...but of course the sell points are the key, yes?

Still working on the selling.

 

 

mrees999's picture
mrees999
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 428
Mystory god chartist

I hear no names dropped. Can't follow the evidence. Mine is clear. Do you pick my call at around 12k?  Great, what about my call at $100, $200, $1000. Let's hear the whole truth.  Or do you consider yourself that mystery God chartist?  My evidence is clear.

I think of the two camps I mentioned: "The Sour-Grapers" and the "Set-for-lifers".  If your chosen "Chart-God" is so good, I doubt he would be spending much time with mortal men who are spellbound by his every word on such a profit maker like Youtube. He would be more likely spending time building a mansion on his own island.

But perhaps I'm wrong. I'm not spellbound by Youtubers. How about proving you're not all talk to the others on this forum as I don't really care myself. Perhaps you'll benefit them too if you really care to. I'm sure you're man-enough to able to keep your chin up with the public criticism involved. I have faith in you, so spill the beans on your chosen Chart-God with the 90% track record.  As I've happily exposed mine and encourage anybody to research  my long-running banter (which would include my long-time friend and nemesis, and honorary first-Sour Graper, David Fairtex) 

We need to come up with a title for that... "President Sour-Grape"?  Sour-Grape Extraordinaire? Would that be an appointed position or open to election?  I'll have to let that be up to you guys.  I'll be happy to lead the 'Set-for-lifers".  All in good fun of course perhaps will meet in Peurto Rico.  This bear market would be an exquisite time to unpack our crypto holding and sell everything.  For easier accounting as you can only count on profits made while you live on the island itself. So buying them right back in this deep bear market would be incredible profit-making ability as these markets eventually enter the next mania cycle.

Not financial advise of course, as always do your own research. Sour grapes are always welcome to switch camps. Or perhaps follow "New-Life" to find his Chartist burning bush. (My Spell check sometimes tries to fix the word "Chartist" with "Christ", Perhaps there is some divine meaning in those triangles?

 

 

 

 

 

 

 

 

 

mrees999's picture
mrees999
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 428
Mystery God chartist
But perhaps I'm wrong. I'm not spellbound by Youtubers. How about proving you're not all talk to the others on this forum as I don't care myself. Perhaps you'll benefit them too if you care. I'm sure you're man-enough to able to keep your chin up with the public criticism involved. I have faith in you, so spill the beans on your chosen Chart-God with the 90% track record.  As I've happily exposed mine and encourage anybody to research  my long-running banter (which would include my long-time friend and nemesis, and honorary first-Sour Graper, David Fairtex) 
 
We need to come up with a title for that... "President Sour-Grape"?  Sour-Grape Extraordinaire? Would that be an appointed position or open to election?  I'll have to let that be up to you guys.  I'll be happy to lead the 'Set-for-lifers".  All in good fun of course perhaps will meet in Peurto Rico.  This bear market would be an exquisite time to unpack our crypto holding and sell everything.  For easier accounting as you can only count on profits made while you live on the island itself. So buying them right back in this deep bear market would be incredible profit-making ability as these markets eventually enter the next mania cycle.
 
Not financial advise of course, as always do your own research. Sour grapes are always welcome to switch camps. Or perhaps follow "New-Life" to find his Chartist "Burning Bush." (My Spell check sometimes tries to fix the word "Chartist" with "Christ," Perhaps there is some divine meaning in those triangles?

 

 

 

 

 

 

 

 

 

mrees999's picture
mrees999
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 428
Dave Summary guide

Dave said:

Let me summarize your response:

a) It's different this time.

There are potentially additional aspects to consider that didn't exist in previous manias.  Much will likley be the same - dumb money will surely follow the new spark that could be the biggest mania of them all.  And again it will crash likely bigger than ever before. - The trick is knowing when to 'fold them' - which you've seen in the past - I'm pretty good and picking tops.

b) It wasn't me that said $50k.

Pretty much. There will be a day where it reaches 50k but my timing isn't aways accurate. There are a lot of moving parts that need to be in place. As we are talking institutional money that hasn't been there before, and this requires regulations that aren't yet set - this might take years.  Until then, it's an accumulation phase in my opinion.         

c) I'm really rich, so you should believe what I say.

I have a proven track record. Many people track believablity in dollars and sense, the proof is in the pudding. So that's as good as measure as I can think of. Of course I could give the full history by listing bitcoin and ethereum addresses so people can see for themselves, but if somebody was new to the forum and didn't want to spend days reading our back-and-forth dicussions to decide who was right or wrong, we can objectively compare who is 'set for life' on the topic we often disagree. I wouldn't take crypto advice from a guy who lives in a van down by the river.  (No offense intended if that fits your lifestyle) ;-)

d) Charts are useless with bitcoin.

Charts have consistantly proven to be not very helpful in short term gyrations. They likely helpl with big picture cycles and trends - but it is pretty obvious to people that have been watching the space for a few years when we are in manias and panics. I don't need a chart to see the obvious.  However, to a carpintor with a hammer, everything looks like a nail. If you got that one tool that you've become and expert - I get why you would want to yeild that on everything you see. I don't blame you for it. I'm not interested in trying to change you or your methods. They are entertaining. You're going to pound the square peg through that round hole even if it is;

the.

last.

thing.

you.

ever.

do.

"Did I get that right?"

You missed the whole half where i talk about Puerto Rico, but between you and me, I got your advice in person on that topic so we're good. (For all else, his very good advice was to go spend time there before making long term commitments).

 

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