- Bitcoin has crashed down to the 4200s and what does that mean?
The term "you shouldn't try to catch a falling knife" applies to this situation perfectly. Until a bottom is formed investors shouldn't get in. Bottoms are formed after several days, weeks and months of consolidation and agreement from bears and bulls happy with that level.
- But if it falls that fast shouldn't it go up as fast?
In the crypto market buyers have been trying to accumulate wealth trading Altcoins for faster gains and then buy Bitcoin. But when Bitcoin fell, the market fell with it. So buyers got stuck "HODLing" Altcoins, with no stop loss set up, hoping for a climb. Unless fresh investment comes in Bitcoin, price will take long time to go back up.
- Where is the Bottom?
Bitcoin climbed from 1k in the beginning of 2017 to almost 20k late in the year, then consolidated in the bear market mostly between 6k and 6.8k. There was no big consolidating in between the levels of 1k to 6k during the 2017 climb. Not having this levels set up made it impossible to predict a bottom. So unless Bitcoin goes very down and very cheap, like 1k, no fresh money will come in unless after a consolidation period on a new level. Possible psychological levels obviously on all the thousands. So no rush! Let a bottom form for some weeks or months, have the market agree that its a good moment to get in.
- Is it dead?
Think about the fundamentals. Its iconic and the first one, so its the oldest and it has proven its resilience over 10 years, while lots of other coins are gone. Its the most regulated and accepted by countries, laws and financial investment firms. People want to buy it but they are waiting for the right moment.
- What about other coins?
Market crisis cycles are good to clean the bad projects. Only the good and strong survive to see the next bull run! Still, there are lots of other good projects in this market, but those are not where the financial investors eyes are.
- So should I buy now?
You only buy what you can afford to lose completely. There are no secure investments. The best time to buy is always yesterday because we don't know the future of the market. Rule says, buy when there is blood on the streets.