It’s really not very often you uncover a Win-Win opportunity in a market. Sure, at a granular level you can always ‘trade a range’ and potentially benefit on both sides of asset movement. However, with BTC we find ourselves with an almost perfect upside/upside opportunity.
Win One
BTC corrects in the near future. Most analysts are calling for a 35% drop from recent highs – referencing past price action. I personally feel a correction is likely either now / sub 10k run up / or after clearing 10K but the extent of the correction will be shallower, in my opinion, because institutional demand is higher and the fundamentals are much better. Charts offer guidance – they are not written in stone.
So a correction to
A) 8.4k to 6.3k
B) 10k to 7.5k
C) 12.5k to 9.4k
All figures are rough approximations.
So What Will I Be Doing If BTC Corrects?
Why buying more Bitcoin.
Does any serious analyst believe that BTC is about to tank for the longterm (6 to18 months)? It could – there are a host of outlier risk factors that could and would take BTC to sustained lower levels – regulatory crackdown, a China ban, a critical bug, a 51% attack, and on and on go the risk factors.
However, with the exception of a China ban, none of these risk factors are likely to play out in the next year or two. My reasonably in-depth analysis of China’s role in crypto and the likelihood of a ban can be found here.
To balance these we have a range of possible positive catalysts that may prove market supportive.
Actual institutional involvement in crypto, the emergence of a killer application utilizing crypto, regulatory clarity in the US, corporate unboarding, retail FOMO and on and on.
My Thesis
When a correction finally occurs it will bottom out at 20-25% and I will but the dip.
Temporarily cheaper BTC is always a good thing!
I already have buy orders in for BTC at $6505 / $6305 and $5465 (just in case that 35% dip occurs).
These are investment positions, so $17,000 is my profit target – a very conservative profit goal (I already have my multi-cycle BTC positions stored away which target much higher returns).
Win Two – BTC Continues on its Merry Way
BTC continues to be range bound for a week or two and continues from strength to strength. In this case, I see two ‘Ifs‘ playing out
If BTC breaks $8,500 and opens and closes above that level on the daily chart:
BTC will move to test the psychological level of $10,000 very quickly (within days).
If BTC breaks $10,000 and opens and closes above that level – this time on the weekly chart – we are off to the races.
I’ve already accumulated my core BTC position so if we move up sharply from here – all good.
For those you who still want to accumulate BTC (and why wouldn’t you) – dollar cost averaging is the lowest stress /risk approach.
Simply add a little BTC to your portfolio once a week/fortnight/month. This is my current approach (small weekly purchases) while I await a market decision.
So either way – a steep retrace = a buying opportunity
Or onwards and upwards = seeing my core investment appreciate.
Win-Win
Caveat
Bitcoin is undeniably a high-risk investment – take your time and research it in some depth before you follow anyone’s advice about it. The one certainty with Bitcoin, is its volatility – without a proper understanding of why you bought BTC in the first place you are likely to be spooked by such volatility and end losing capital. Always do your research first and question the assumptions you find before you. Verify, don’t trust!
Get involved!
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