It's interesting to watch CNBC wrap their minds around Bitcoin.
In this segment, Tom Lee argues (or I guess, entertains the possibility) that Bitcoin's price correlates to emerging markets.
I don't really even understand the Xs and Os of it (hedge funds and "risk on"/"risk off" and all that), so I don't know how to respond to his specific reasoning.
But no.
Just.. no. Bitcoin doesn't correlate with emerging stock markets, or really with anything.
Bitcoin's past bubbles all rhyme with themselves in basically the exact same pattern, and if you go back and look, I doubt you'll find that the emerging markets are doing the same things that you indicate here at all the points where you'd need them to.
When I walked outside today, a blue car drove by. But one time isn't indication of a real correlation. It can be a coincidence that the charts worked out like that this one time.
I enjoy watching CNBC and don't see any bad motive behind their reporting or anything. I think what happens is it's tempting to try to understand Bitcoin by relating it to other things you're familiar with.
But then you end up with kind of like a cartoonish analysis of it.
The predominant thing that drives Bitcoin's price, I think, is just market psychology of how human beings discover and wrestle over what Bitcoin is.
The movements are internal to Bitcoin and its discovery process.
(And right now the predominant thing is that after it spikes 20x, there's a ton of momentum driving it to reconvene with its longer term growth rate.)
As for the question in their graphic...
NO.
No!
I mean.. eventually, yes.
But you wait.
There's no way to predict it or see it coming, other than basically it's been enough time.
Once it floors, like you realize it's been a solid year or two of trading sideways, that seems like a decent reason to intuit that the next bull run could potentially be near.
(So basically, once people are bored and have exhausted their credibility of calling for breakouts is probably around the time where there can be a breakout.)
By my count Bitcoin has had 4 major bubbles (to $30, to $250, to $1200, and to $20K), and, summoning my epic mspaint skills, they all look remarkably like this:
That's the only chart you need.
Wait until it's like that, and then you can start thinking about it being bullish.
(Arguably you can say it already looks like that, but that's because my painting doesn't do justice to how long you need the floor to extend for.)
We're only 8 months removed from the spike, so a recovery now would be unprecedentedly fast. Usually it's more like 2-3 years. So my instinct is more like year 2020 rather than any day now.
And, like I've said before, the price needs to get disturbingly low.
Typically it touches down in the ballpark of its old floor (like maybe double or so of its old floor). Which in this case would mean you could expect it to get as low as like $1500-3000, depending what exactly we consider the old floor to be.
Or I guess like 10-20% of its spike would be another data point to use. Somewhere in the $2000-3000s makes a lot of sense by either metric.
Now, if I didn't have any Bitcoin, I'd probably just want some now. Ending up with none is worse than not timing it perfectly. But I'd be really surprised if it didn't go plenty lower before settling, at least in the vicinity of $4K. Maybe more like $2K or under.
Averaging in would probably be a solid strategy -- maybe even wait a few months or whenever it takes a dip, and then start.
The space seems flooded with people calling for spikes and breakouts, seemingly at random. (So I'm not just ragging on Tom Lee and CNBC here.) I just happen to think it's not very helpful to people to keep hearing noise about breakouts.
And it doesn't do Bitcoin any favors to lure in people who are attracted to price movements and a quick buck.
It's not that I think Bitcoin has to rhyme with its historical tendencies, but it seems like the best foundation to forecast your thoughts from. Like if the sun comes up 4 days in a row, that seems like a good starting point of what's likely for tomorrow. And guessing something different without too much of a reason for it would just be mysticism.
Bitcoin Misery Index, hahaha I love it. It is hilarious watching Tom Lee explain what drives BTC prices relating to hedge fun behaviors and emerging market influences. It could very well be true that large hedge fund managers are the ones behind the drastic volitilty of the crypto markets, secretly plotting the massive pump and dumps resulting in redonkulous profits for their share holders.
NOT!!!
The only thing I agree with Tom is that there is a lot to learn about the crypto market and one important lesson that I learned is never ever trade on emotions. Know your goals and jump in and out of your price points is my current strategy. If you are a holdr because you have lost so much already and are pot committed, then hold on for dear life and pray.
As for me, I am exercising patience and hoping in when the market is all red to catch a small wave of 5-10% then hop right back out to wait for the next set of waves. Eventually I will hop on and hodlr but I agree with you that BTC’s floor could easily drop to the $2k-$3k range. As more regulations and monitoring are inevitably implemented, more people will sell and prices will continue to drop. I truly believe though that crypto will yield profits to those who hodlr for at least 8-9 years. Don’t ask me where or how I came up with that number, haha. All major companies like amazon, Microsoft, or Apple did not become dominant over night. Same with Bitcoin or STEEM, adoption will slowly develop as long as they create value to consumers.
Abadeepbadeep abadatsall folks. Best of luck with all your crypto ventures.
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hahaha.
Ya, even if there are some reasons why hedge fund managers will buy Bitcoin more when emerging markets do well..
Stuff like that doesn't have a real sway on the price. Bitcoin can be wonky to think about, but if you take some different asset, like the price of corn...
If hedge fund money poured into it for some tangential reason that had nothing to do with the fundamentals of corn, then the smart money would know to sell or short to off-set it.
So hedge fund tricks, or anything that causes random buying pressure (or random selling pressure), doesn't necessarily hold as impacting the price.
The fundamentals is what really drives it.
Ya! I think I've heard disruptive technologies take about 10 years to really get going. Like AOL in the '90s, then about 10 years later you start to have Facebook and YouTube and the internet as we know it.
So we're probably getting close to the point where Bitcoin can be practical and useful.
And the first use cases won't be in the West. But in economies with shakier currencies and more need for it.
And currency issues will hit the West at some point too, if they don't back them up in Bitcoin before that. :p
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CNBC are a bunch of assclowns trying to discourage the masses against cryptocurrency and Bitcoin. Don't trust anything they say!!!
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hahaha.
Ya, it's hard to take any mainstream news very seriously. I like some of the people they have on CNBC, and they usually don't talk negatively about it from what I see. But that doesn't mean they're presenting it accurately. It seems like it would be confusing to people, and probably discouraging in that sense. Like there's a lot of chatter and all sorts of opinions thrown into the wind, but very little expert analysis from people like Andreas Antounopolos etc, very little about the fundamental aspects of it.
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Laughed out loud with the chart and with your humor as well.
To the point: I too expect things to go a lot worse before the next bull run. In my opinion we might see a spike at the end of the year, but it wont be what we call a bull run. Now the thing is ...that a part of me wishes to go to that dip. Because it will definitely drag all the alts with it and you can buy at really cheap prices. Is such a scenario Tether seems like the magic card and If I remember correctly around 1 bill tether was printed lately....maybe they know something....
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haha! 😃 glad you liked it.
Ya, the risk with Tether is it's all centralized and you're just trusting the people behind it. So you run the risk that today's the day it goes kaput. There are other stablecoins too, like BitUSD on Bitshares. I don't know too much about them and what the risks or differences are.
I know Tether is theoretically backed by real USD by the people who run it. They hold a USD for every Tether they print, allegedly.
But so it's like.. even feeling confident that Bitcoin will go down, do you trust Tether for a year to try to 2x or 1.5x or so on your BTC? meh
It's tough out there.
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Might be centralized I agree but so far is working just fine. I’d like to use sbd instead but you know too that even though it is supposed to work at its peg it just doesn’t. Flows with the market. Besides tether is not for 1 year holdings. But more likely for short term trades.
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Ya, the less long you hold it for, the less likely it is to go kaput on you. But I'm saying a year as in that might be when it seems like the crypto market has bottomed and you'd want to buy back in.
I can hold Tether for a few weeks and feel pretty comfortable, but also the crypto market won't have dipped as much in that period.
Ya, I'd like to hold SBD, but indeed, it doesn't seem guaranteed to hold its peg.
Tether works so well because it's literally just Bitfinex people promising that they have a dollar to backup every Tether that they create, as far as I know. That's why it holds at a dollar. But the risk is you're trusting them, that they really have all these dollars and won't run off with it.
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That’s funny, I just watched it on my you tube recommendation list. Tom Lee also said recently that Amazon and Starbucks will invest their money set aside into bitcoin. I mean sooner or later. I do believe most institutions will eventually invest some of their worthless fiat into crypto especially bitcoin. His arguments about bitcoin are solid and that’s why I’m his big fan. He doesn’t say bitcoin gets to 1mil anytime soon, but he doesn’t say bitcoin won’t start bull market soon either. Interesting thing he said about emerging markets and bitcoin. Hedge funds are pulling out of both at the same time and the same comes to when they start investing back in both. However, this could as well change. I don’t think bitcoin can even go much lower since bitcoin futures are functional at or above 100 bil market cap or something like that. Maybe $5.5k, but not lower, they don’t alow it. Also, at today’s prices, bitcoin mining is not profitable anymore. I would really be surprised if we dip below 5k. But yes, we can be stuck here at $6k for years as well.
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Ya, Tom seems nice and I kind of wanted to work into the article somewhere, but didn't find a spot for it, that he does understand Bitcoin and is sort of a crypto guy as much as a CNBC guy. I assume it's some combination of him being a little wet behind the ears as far as these bubbles go, and CNBC maybe wanting him to do a piece like that.
Could you explain that more? Like the future market stops working if it gets lower than that?
Wouldn't that just be too bad for the futures market? Like it would just have to be shutdown until Bitcoin was higher? Maybe some of those big wigs would have motivation to buy it, so that they can keep the futures market running. But I don't see why however the futures market works would create a floor for Bitcoin.
People make that argument about mining, but I don't think it's correct. What happens is some people start turning off their miners, which in turn leaves more of the pie for everyone else and in effect lowers the cost of mining.
So Bitcoin could continue to drop and this would just keep happening. The field would thin into the people who are best at mining, and mining cost continues to drop as more exit.
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I didn’t know about it until few days ago. First time I heard about that was from @dhenz’s video here is the link.He mentioned that the futures markets (CME / CBOE) can only trade markets greater than 100 bil. When it comes to bitcoin.
”If bitcoin falls below 100bil marketcap it will be removed from futures trading and miners will be taking a huge hit. If the miners/future traders are willing to let it go that far then it would be quite interesting.”
He said.
Average bitcoin mining bing cost is at around $7k and I bet at today’s prices the average home miner struggles to be profitable or to even break even the cost of mining hardware and electricity if not loosing. Not mentioning Hashflare and Genesis mining, which turned out to be complete scam. Whether bitcoin futures stop or not if it drops below 100 bil. all hell will break loose. Perhaps that’s what we need to get rid of all weak hands. I still believe we are stuck in this range for a long time.
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I haven't watched his whole video but I don't know what he means by "willing" to let it go that far. It's not like they control the price lol.
Some people could buy it to try to prop it up, but that could go really wrong for them, I don't know who would care enough about the futures market to try to do that.
Futures market seems basically like a toy for a few traders.
Ya, it's tough for most miners to be profitable right now, so many of them are exiting, and because they exit, mining becomes less difficult (more slices of pie remain) and cheaper for the ones who keep at it.
It's self-balancing in that way. As Bitcoin price drops, there's pressure on miners to leave. As Bitcoin price rises, there's more room for more miners.
I've heard Max Keiser talk about mining cost as a floor for Bitcoin price and just totally don't agree.
At the end of the day there's just nothing any miner can do about it, other than turn off their rig, if people don't want to pay X amount for a Bitcoin.
So mining cost will dynamically rise and fall in step with Bitcoin price. But it's the wagon behind the horse. Its current cost doesn't create a floor that Bitcoin price couldn't fall thru. It's that if Bitcoin goes lower than that, miners have to leave.
::shrugs::
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Hello friend, I hope you are well, we know that bitcoin is the mother of all the coins on the market, so to speak, I personally think that btc will not go down that much, remember that it has a historical maximum at 4000 and something, I do not know exactly the number really, maybe that could be the floor you're talking about, and then make the rise to 11k, 12k or maybe 15k, and that we close the year there, if you want to trade never do it against the trend and always expect price action, I must say that these last few months have been difficult for us as traders, because the market has been unstable, but well, that's what this is about, good things are coming for all of us friend, it's good to come back to steemit and find a post as great as this!! greetings from Venezuela!. @full-measure
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I would think most traders would say kind of the opposite, not to follow any trend and that volatility is good and where the money is made.
What kind of trading do you do? Maybe you mean "holding" or "investing" rather than trading? (Trading is when you buy and sell short-term and try to time the market.)
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When I talk about trading I mean that I only receive signals and invest in them, however, I am also learning more and more every day from technical analysis, my brother knows a little more about it, but I like to follow trends, there is a reason why there are patterns, bullish triangles, bearish, channels and all that. @full-measure
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I see I see, that kind of trend, like a trading technique. I was thinking a trend like "whatever is trendy right now" like however people are thinking right now.
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Right now the only thing I would recommend would be to translate with the scalping method, because the market is something.... I don't know what to really call it, let's say out of control. @full-measure
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I have no idea what that means, so I'll have to pass lol
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