Advertisements

Bitcoin Has Crashed–What Now?

Bitcoin (BTC) has crashed. No one really knows why but in my model we should be in for “good” news on the China trade war or some such China-related information that is strong for the Chinese currency. This is only a theory but if it is correct, bitcoin will either rally vertically if no news breaks or the news will appear very soon. This is being written at 12 p.m. GMT September 25 and the news ought to be out there by no later than the end of the week.

If I’m wrong and there is no such news and the price stays down or falls more still with no positive trade war news then my bitcoin theory, which has served so well, will be severely challenged. In any event, bitcoin has crashed. The dreaded flag has broken to the downside and the bottom is anyone’s guess. The decision what to do next comes back to the schism between believing BTC will be worth $100,000-plus a coin or $0 a coin. You have to pick your side.

Way back before this year’s rally, I stated there is another way of looking at this price action. In commodities a big bubble is followed by a series of smaller and smaller echoes of the initial price shock which erupt over time as the years pass.

Each new price eruption is smaller than the last until the original bubble is all forgotten about. If this is your model, this BTC bubble echo is now dead and BTC will fall back to the $2,000-$3,000 range or even lower. Then after a year or two there will be another small vertical and on this pattern will go, until bitcoin is all  but forgotten.

Today In: Money

The alternate model is the tech boom, where the original bubble was replaced by another bigger rally, one we have still not seen the end of. Is bitcoin a commodity or a value added instrument? Bitcoin isn’t like gold or copper, where a price rise creates a glut.

Or is it? For me this is a very tempting model because I experienced it as a youngster and saw it play out all the while everyone continued to wish for the return of the moment when copper or gold went to the moon. However, bitcoin is not going to flood the market as miners pour resources into a race to over produce.
Bitcoin protects itself from exactly the economic reason why high prices are the solution to high prices.The choice is clear for players in this game of speculation, steer clear or buy the dip. I’ll be buying the dip but not in a hurry. This is the chart of what has happened:

Bitcoin has crashed

Credit: ADVFN

The flag got broken to the downside and it’s clear as day that a lot of people took this as a cue to get out, causing a panic. I’ve put some levels equivalent to some zones where the price might settle. I will be buying a little in the coming days and more if we hit $6,000 and a lot if we see $4,000.

Meanwhile, there was been a strange crash in hash rate before this price fall, so everyone is free to link that up with this fall. There may have been a BTC miner who needed to sell a big chunk of BTC and in this fragile market with everyone staring at the same delicate chart pattern, it doesn’t take much to create an avalanche. I must admit to staring at this chart before it crashed thinking I should sell.
This would have been a good move but experience has taught me that you can win on the exit but lose on the reentry. It’s great missing a fall but you can also miss the rally which can end up even more painful. This is the basic lesson of the randomness of markets. Back the direction you believe is the long-term outcome and buy the dips or don’t play at all. Bitcoin is like backing Apple when it was on the edge of going bust: do you believe in the future or not?

If you do, you hold forever and buy the dips. The only thing you mustn’t do with the position is let that put your finances at risk or hurt your sanity. As a believer I will buy this dip, in the same way as I bought the last, little and often. For those who don’t believe in the long term you should stay well clear.Be among the first to get important crypto and blockchain news and information with Forbes Crypto Confidential. It’s free, sign up now.

—-Clem Chambers is the CEO of private investors website
  ADVFN.com

and author of
Be RichThe Game in Wall Street

and
Trading Cryptocurrencies: A Beginner’s Guide

Chambers won Journalist of the Year in the Business Market Commentary category in the State Street U.K. Institutional Press Awards in 2018.

I am the CEO of stocks and investment website ADVFN . As well as running Europe and South America’s leading financial market website I am a prolific financial writer. I wrote a stock column for WIRED – which described me as a ‘Market Maven’ – and am a regular columnist for numerous financial publications around the world. I have written for titles including: Working Money, Active Trader, SFO and Technical Analysis of Stocks & Commodities in the US and have written for pretty much every UK national newspaper. In the last few years I have become a financial thriller writer and have just had my first non-fiction title published: 101 ways to pick stock market winners. Find me here on US Amazon. You’ll also see me regularly on CNBC, CNN, SKY, Business News Network and the BBC giving my take on the markets.

Source: Bitcoin Has Crashed–What Now?

26.6K subscribers
Check out the Cryptocurrency Technical Analysis Academy here: https://bit.ly/2EMS6nY In this video we discuss the recent Bitcoin crash, and the affects that Bitcoin crash may have on the Bitcoin market over the coming days. Bitcoin crashed nearly $2,000 yesterday while we were livestreaming, and found support around the Bitcoin support level of $11,700 as expected. Whether Bitcoin will continue it’s march ever higher from here, or if Bitcoin has now started a longer Bitcoin correction is yet to be seen, but we do know that Bitcoin has finally had opportunity to consolidate the gains Bitcoin has made over the past few weeks. – – – If you enjoyed the video, please leave a like, and subscribe! – – – Follow me on Instagram & Twitter: @cryptojebb Join the Discord! https://discord.gg/59jGjJy #Bitcoin #BitcoinToday #BitcoinNews I am not a financial adviser, this is not financial advice. I strongly encourage all to do their own research before doing anything with their money. All investments/trades/buys/sells etc. should be made at your own risk with your own capital. Spare Change? BTC 127eLjKTBKU9HTFhYowCDC4D3JBxonVk15 ETH 0x5115ACa82edf204760fE3B351c08a48d6004D89B LTC LSKXx3fQRK5LMowGznVvo6A9NtmtaQaoqP Please do not feel obligated to donate, though donations are appreciated!

Advertisements

A Stark Prediction For The Future Of Bitcoin, ETH, XRP, And LTC

uncaptioned

Bitcoin, ETH, XRP, and LTC prices, will be on a roller coaster for a long time. Traders and investors will make and lose fortunes in record time, betting on them. In the end, say some analysts, these cryptocurrencies will either die on their own, or be killed by the ‘establishment’ — big governments and big banks around the world that defend sovereign currencies.

Take the case for Bitcoin.

The “people’s currency” holds a great promise: to become the first true global currency, free of the control of central banks that print money and big banks that generate credit.  But to do that, Bitcoin must gain the trust of the “general public.“ This means it must be adopted as a medium of exchange, standard of value, and store of value, replacing national currencies.That isn’t easy, given the many obstacles Bitcoin has to overcome. Like lack of awareness, familiarity, and stability, etc. And that makes some experts bearish about the future of Bitcoin.

Bitcoin Price YTD

Bitcoin Price YTD

Lars Seier Christensen, Chairman of Concordium, the next-generation decentralized world computer, is one of them. “In the longer term, I am bearish on bitcoin as I believe it does not have the necessary characteristics of a longer-term valuable asset and, eventually, that reality will catch up” says Christensen.“But in the short term, price movements will likely be random as Bitcoin is affected by low liquidity and unpredictable bigger trades.”

Unpredictability will make it hard for Bitcoin to gain broad adoption as a medium of exchange. And without broad adoption, Bitcoin will remain a play for speculators and true believers, and eventually die on its own.

But even if Bitcoin overcomes all these obstacles and gains broad adoption by the general public, and was in a position to replace national currencies — ie, become the new currency — what would happen then?

Bears argue that the “establishment” cannot afford to let that happen.

For a couple of reasons, including  the loss of Seigniorage” — simply put, the profit made by the national governments by printing currency. Then there’s the profit made by banks helping circulate that money and create credit.

The establishment will do whatever it takes to defend these profits from Bitcoin and any other cryptocurrency that seeks to replace it.

Recent Congressional hearings on Libra attests to the determination of the establishment to protect the dollar from competing cryptocurrencies. In a rare display of unity, Democrats and Republicans opposed Libra, and had many unkind words for Bitcoin.

“Cryptocurrencies that are ONLY there as a currency substitute, however, have no real long-term future,” says Christensen.“They will be outlawed by governments wanting to control the money supply and taxation, and in any case, cryptocurrencies have no intrinsic long-term value of significance. Hence, Bitcoin will only survive as a fringe activity.”

Not everyone agrees with this gloomy assessment, however. Dave Hodgson, Director and Co-Founder of NEM Ventures, is one of them.

“In my opinion, Bitcoin will never die nor be killed by the establishment, despite some people’s efforts to the contrary,” says Hodgson. “The recent drop we have seen in Bitcoin is within the boundaries of what our analysts were expecting from technical analysis. However, the timescale has been slightly skewed in light of recent announcements, primarily from US government representatives.”

 Corentin Denoeud, CEO and Co-founder of Blockchain Studio, is another .

“The fact that governments around the world are even talking about crypto is a sign of progress for the blockchain industry in general,” says Denoeud. “While countries such as India have called for the outlawing of cryptocurrencies, representatives from Germany’s Central Bank have responded favourably and advanced the view that cryptocurrencies are not a threat to global monetary stability. Even China, who has previously banned ICOs and cryptocurrency trading, has called bitcoin a ‘safe-haven asset’ (via its state-run media agency) and is now reportedly stepping up its own efforts to create its own cryptocurrency, following Facebook’s unveiling of Libra.”

 While it’s still unclear which side is right, one thing is clear: Bitcoin (and ETH, XRP, LTC, etc) true believers who think that cryptocurrency will eventually replace national currencies, need a 101 lesson in Money and Banking.

Follow me on Twitter.

I’m Professor and Chair of the Department of Economics at LIU Post in New York. I also teach at Columbia University. I’ve published several articles in professional journals and magazines, including Barron’s, The New York Times, Japan Times, Newsday, Plain Dealer, Edge Singapore, European Management Review, Management International Review, and Journal of Risk and Insurance. I’ve have also published several books, including Collective Entrepreneurship, The Ten Golden Rules, WOM and Buzz Marketing, Business Strategy in a Semiglobal Economy, China’s Challenge: Imitation or Innovation in International Business, and New Emerging Japanese Economy: Opportunity and Strategy for World Business. I’ve traveled extensively throughout the world giving lectures and seminars for private and government organizations, including Beijing Academy of Social Science, Nagoya University, Tokyo Science University, Keimung University, University of Adelaide, Saint Gallen University, Duisburg University, University of Edinburgh, and Athens University of Economics and Business. Interests: Global markets, business, investment strategy, personal success.

Source: A Stark Prediction For The Future Of Bitcoin, ETH, XRP, And LTC

Like this:

%d bloggers like this:
Skip to toolbar