Reasons why I am currently shorting Cryptocurrencies

Dear Steemians,

I wanted to start by saying that I am a big fan, supporter and believer in cryptocurrencies and blockchain technologies.

Nevertheless, we have to remember that 2017 has been an EXTRAORDINARY year so far. Unfortunately, everything has to cool down at some point and I think we reached that point.

Year To Date, Bitcoin has been multiplied by 4 and Ethereum by 40. As I am excited about the future prospects I do believe that revenues and current developments do not justify such a growth yet. As there was an Internet Bubble that cooled down before the internet brought tremendous revenues to companies.

The Crypto Market is not going to explode but there are a few signs that it is overheating:

Mainstream finance is pooring into Cryptos (HedgeFunds, VCs...). Guess what HedgeFunds love? Shorting assets they believe are overvalued*
There are some great ICOs projects out-there but let's be honest we also have a lot more scams that there used to be.
Celebrities (Paris Hilton, Floyd Mayweather) are now investing and tweeting about cryptocurrencies? It reminds me of this old quote When the taxi driver is talking about the stock market, you know it’s time to sell.

Chinese regulating ICOs will make raising money through these vehicles more difficult, in addition, it will probably push other regulators (SEC...) to regulate them also. Imagine if there is a huge crash and Americans or British lose all their investment due to scam ICOs. Media will prosecute the government for the lack of regulations/controls compared to the Chinese. Politically, this is not acceptable.
https://www.cnbc.com/2017/09/04/chinese-icos-china-bans-fundraising-through-initial-coin-offerings-report-says.html

The CryptoMarket is driven by 2 majors currencies Bitcoin and Ethereum. If these 2 do not perform well, altcoins will have a lot of trouble reaching new highs! Then, the question is when will I buy again?

Bitcoin:

I would be a buyer of the CryptoKing when it will drop to the moving average that should allow fresh money to poor into Bitcoin. As you can see in the graph below, I would buy under $4000

Weekly Bitcoin Price

I would be a buyer of Ethereum on lower levels as I feel that the moving average will not hold in case of a small downtrend. Therefore, I will invest on the recent lows if we reach it (which I hope we don't) at $160-170.

Weekly Ethereum Price

To conclude, you should also remember there are a lot of Blockchain/Cryptocurrencies conferences planned in September (Bejing, Shanghai and London are 3 major ones). These events could bring positive news that might help us to go back in an uptrend.

Please remember that this is my personal opinion and not a financial/investment advice. You need to do your own research to make your own decision. Investing in cryptocurrencies can lead to financial losses.

Source Image 1

The ranges you mention are very possible. The simple fact is a hard run up is usually followed by a run down.

People see the percentages and panic since it is a number they are not use to. However, these moves are common for BTC over the past 5 years. Even LTC lost 90% of its value at one point.

This is part for the course. Masterluc said $15000 BTC by end of year, he did not say it would be a straight run up.

Agreed!
I am going to buy back my short at some point because I believe in it but I also know that people panic and we can lose 30-40% before people calm down.

An interesting article that enjoyed reading. When Paris Hilton advertise for an ICO, how much she got paid?

She is claiming she didn't #ThisIsNotAnAd but who knows ^^.

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Awesome article, very informative. Thank you.

Thank you for your comment. Welcome on Steemit ;).

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Good article wish I saw the recent drop coming.

Thank you.
Nobody did, I started switching from long to short Sunday night and finished this morning.

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