The bitcoin price has fallen out of bed as I predicted in an article I wrote on November 15 (see Crash: Bitcoin And The Stock Market On The Brink).
The bottom is falling out of bitcoin and crypto looks like it is quickly heading for the final crescendo I’ve been waiting for. I should add that normally these matters take a lot longer than I anticipate but timing remains the nearly impossible skill we all wish we had.
I’m still holding out for $2,500.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
This was the set up, I wrote about here at the beginning of October.
I said this uncanny tightening of range would lead to a big break out to the high or low and that whichever direction would be a signal and the trade was to jump on that trend:
This is the chart I drew you in the summer of target levels to the downside:
So here we are today and I must say bitcoin stuck at the $5,500 level for a lot longer than I expected:
I’m still hoping for a buying opportunity at around $2,500 and while I really don’t expect to see $1,000, it could happen.
So much for yesterday, what about tomorrow?
The call you have to make is, does the current generation of cryptocurrencies–not tokens, but bitcoin-style minable, distributed, trustless coins–have a future or not. If they don’t, then they will go to zero, if they do then they will ultimately go to the much-promised moon.
I believe the latter although it must be said that a lot of countries are slowly but surely outlawing many aspects of them. However, I think that like the internet, cryptocurrencies cannot be erased even in near-totalitarian states. As such, the limited supply, big brands like bitcoin will recover like the denizens of the dotcom crash and ascend to great heights.
For me this crash is a buying opportunity, it’s just a matter of timing it as best we can.
I have been buying since the initial crash at about $5,000 but only tiny amounts, but I will start buying properly below $4,000, then more below $3,000 and finally I may decide to do a splurge at around $1,000 but at that level even my faith will be quavering a little.
While it might seem I’m a pretty good predictor of the market prices I prefer to play the markets as a zone of probabilities. Probabilities are that bitcoin will see $100,000 a coin one day but fall further before it sees a bottom. Steadily acquiring coins is good, but getting coins cheaper is better.
Most traders can’t abide that kind of woolly thinking, but I feel we have a woolly sense of the future so we should buy and sell in a woolly hesitant fashion to get the sort of solid average we want. Buy around the bottom, sell around the top is the best anyone can do.
Market predictions are not fate.
So what now?
I think crypto will continue to fall. There might be a period of sideways trading at these levels, but another drop should develop.
A dramatic rally is possible but that should be telegraphed by a bump in general altcoin fiat mining rewards and there are none in sight at the moment.
Like the precious metal stackers, I’m slowly staking bitcoin and that pace will quicken as it falls.
So you can imagine I’m keen for more bear market moves and I’m eagerly awaiting them.
I may never get my $2,500 bottom because other altcoins are already close or at what looks like theirs.
Take ethereum, which I predicted at the beginning of October would see $100 a coin here.
It is now here:
That is just a few hops away from a bottom.
Yet is doesn’t do to overanalyze things.
Crypto and equities are crashing because ‘fiat,’ old fashioned money, is being sucked out of the system by the Federal Reserve’s reverse-QE. To top that, the global order is suddenly wobbling on its axis with Trump’s ‘war on trade’ and the increasing ‘volatility’ of governance not just in the U.S. but around the globe.
A new era is ahead, and it looks like it is going to get kicked off with a financial market reset.
What to do?
Buy the crash.
But try not to ride too much of it down and don’t be in a hurry to get back in.
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Disclosure: I own bitcoin, ethereum and many other altcoins.
Clem Chambers is the CEO of private investors website ADVFN.com and author of Be Rich, The Game in Wall Street and Trading Cryptocurrencies: A Beginner’s Guide.