Cryptocurrencies

Bitcoin – checking in

Introduction

Though the market has been (extraordinarily) quiet, it is time for another Bitcoin update.

As my readers know, there is little value in individual altcoin projections in times like these, because they all broadly track the movements of BTC price anyway. This is not to say that certain coins won’t have a great week or even month of performance, just that such things give way to the movements of the macroeconomic market in the greater scheme of things.

Here’s where things become difficult:

I’m basing this post on a nagging feeling in my gut. Because this post is based more on gut feel than anything else, it’s very difficult to quantify. Make no mistake: “gut feel” is a damn solid indicator when it belongs to someone who knows the market, but it’s hard to explain to someone else.

Gut feel is the cumulative sum of market movements, news, projections and other indicators – making it a most powerful tool. But to list each of the factors that have informed it is nigh impossible. So basically put, this post boils down to this: How much do you trust Bit Brain’s instincts?

Let it be said: as usual, I have no certainty on this matter. If I had to put a figure to it, I would say that my confidence level on this call is 60%. Here is what I think:

Bitcoin

As I Tweeted almost a day ago, I’m expecting the price of BTC to take a significant tumble this week.

How big is “significant”?

Put it this way: I consider BTC to be oversold. Bitcoin is trading just BELOW my famous/infamous Long-term Base Trendline.

This means that I already consider it to be chronically oversold and cheap at the price.

I have skin in the game. I’m currently busy with a DCA-style process so this call is important to me (“Your call is important to us, please continue to hold” *cheesy music*). I often say it’s better to get in at a good price than at the very best price, and I stand by that, so I wouldn’t try to time a buy unless I felt that there was a decent amount of money to be made by doing so.

Thumb-suck guesstimate? I reckon that I can score an extra 15% or so if I set the right price target/time the buy correctly. I would consider 10% a conservative estimate and, depending on how the global markets shudder and shake, figures in excess of 15% are absolutely possible.

A little bit of justification

I’ve said that I can’t put a finger on which exact information I’m basing this call on, but I’ll throw you a bone by offering you a couple of the more obvious market indications:

1) $9000 is acting as psychological support

This is a weak form of support and for that reason I don’t expect it to hold. When a psychological support level breaks, the resulting price drop is often fast and significant. Note: this means that the predicted price dip may be short-lived and only the quickest traders will benefit from it. That will depend on whether such a dip signals the beginning of a downwards trend (which will be determined by the greater markets in general), or if it instead results in a V-shaped bounce (signalling that market confidence had just waned a little and traders needed some reassurance that the hodlers are still hodling).

2) Volume is dropping tanking

Volume has dropped like a stone. Anyone who has recently viewed the three-month BTC chart on coinmarketcap.com should have seen this for themselves. A quick hover over the CMC chart will show you a decline from over $60 bn/day in mid-May to below $15 bn/day now. We’ve lost about 80% of the trading volume in less than two months!

Conclusion

Being oversold, I’m as bullish on Bitcoin as ever, BUT, I do still expect a dip soon. On Twitter I said “this week”, which is as good an estimate as any. Oversold times are the best times to buy, and dips during oversold times are a special gift indeed.

If this entire post is wrong and the price of BTC goes up – well then, I’m not exactly going to be angry about it, am I? I’m calling this a win-win situation!

Looking broader: I believe that we are in an economic depression, a reality that hasn’t hit home on the artificially inflated stock markets just yet. When it does hit home, then EVERYTHING will plummet – crypto included – but crypto will bounce back. As for the rest – well the money printers are already set to “BRRR!”, junk bonds have already been bought, bailouts have already happened, interest rates are already at “0” (etc etc…) – this giant is about to fall hard.

I believe that now, more than ever, it is important to be sitting in safe havens. Precious metals are VERY expensive right now (but should go a lot higher), the property bubble has yet to burst (again), but crypto – oh dear beloved crypto – for whatever reason it is greatly undervalued.

And that makes it the most valuable of all…

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

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