Category: Bitcoin volatility

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Bitcoin and the Dead Cat Bounce

The “Dead Cat Bounce”

“A dead cat bounce is a temporary recovery from a prolonged decline or a bear market that is followed by the continuation of the downtrend. The name “dead cat bounce” is based on the notion that even a dead cat will bounce if it falls far enough and fast enough..” – Investopedia

The powers that rule the financial markets, The FED, the SEC, the World Bank, etc., all have one thing in common – they view Bitcoin as “the enemy” (The enemy of the Banks).  While volatility rages in the Bitcoin price, any downturn – or upturn is regarded as proof that Bitcoin is a sham or fraud, like the “Dead Cat Bounce”.

Unfortunately for the large financial institutions, Bitcoin is far from dead.  In fact, it is making a recovery from recent lows.  Is the cat bouncing?  You Bet it is.  That sucker is going up and down like a yoyo.  Count on it.

History teaches us that it takes 20 years to convert a financial fad into a trend, and a trend into an institution.  Bitcoin started in 2009, and is a nine-year overnight success. The banks deride Bitcoin, but almost all of them are using the Blockchain technology (the underlying bitcoin technology) for developing low cost and stable transactions.  With apologies to the Bard, “Methinks the banks protest too much”.

While the cat is bouncing, you can 
1) Enjoy the show
2) Keep calm and HODL on
3) Buy on what looks like it may be a “low”, and sell some on what looks like a “high”  (Note: it is generally agreed that no one can “time” the market, but with this much volatility, moving 20% in the course of a week, it could be a worthwhile risk – but don’t “bet the Farm” – know how much you can afford to lose, and keep Maalox handy).

Enjoy the show, Hold your coin and enjoy the highs, while avoiding despair when the price plunges and the Fat Cats project the “End of Bitcoin”.

Bitcoin Obituaries – Bitcoin has died 253 times
Best of luck to you, and may your Bitcoin portfolio go TO THE MOON!

 

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It’s the Dip, Time to buy more Bitcoin? Or is Bitcoin Dead?

Bitcoin Prices dropped again this week.  There are lots of reasons for this, as I will outline, and some things you can do.
 
 

The war on Bitcoin is moving forward.  

Bitcoin continues to be volatile, and is traded 24/7 on international markets.

The pundits and writers are looking deeply into the situation, pointing to what makes bitcoin a volatile commodity.  https://lifehacker.com/why-bitcoin-s-price-is-so-volatile-1822143846

Some are decrying the death of Bitcoin!

Bitcoin is Dead (Again!) – Buy Bitcoin Worldwide
“Reports of my death have been greatly exaggerated” – Apologies to Mark Twain

But Bitcoin is NOT dead.  It is still used for purchases, transferring money between people (and across borders), and enabling commerce where the fiat currency is hyperinflated or devalued.  The Electronic ledger called the blockchain is being researched as a model for financial institutions to reconcile their monetary transfers, saving millions in fees. Look into What Is Bitcoin and What Can I Do With It? – by Lifehacker.

Books are appearing en masse to guide us on out Bitcoin journey, like Bitcoin: Mastering Bitcoin For Beginners: How You Can Make Insane Money Investing and Trading in Bitcoin (Bitcoin Mining, Bitcoin trading, Cryptocurrency, Blockchain, Wallet & Business)

So, what are we to do? 

Sit Tight – Sell it all (or part) – Buy more?

Sit Tight

Do nothing.  Take the long view, squash your emotion and fear, Stand back and watch, as the price fluctuates. This is what The Hodler’s do, keeping out of the day-trading madness, and keeping their Bitcoin long term.  Thee is an argument that points to Bitcoin prices going very high, possibly even $100k or more per BTC.  Keep in mind, there is a limited supply (21 million) Bitcoins that can be mined, and that is it.  This is the Long-Term view.  Bitcoin has been around nine years, and it most likely has many more to go, lets “Let it Ride”.  (Note: I may buy and sell, but I am keeping some Bitcoin, as I have a long view of Bitcoin).

SELL!

Sell it all, and be happy you got out before it “Really Tanked” (Unless it goes up, in which case you cry in your beer).  If this makes sense to you, consider selling your Bitcoin in parts, at levels you set.  This preserves your profit, and puts you in a cash position to buy more Bitcoin at what you think the bottom might be.

Buy More?

When the price drops, Bitcoin is cheap compared to buying at the top price. The risk is that you may be buying it all the way down to the “bottom” (which is an unknown price level that defies prediction, even with those claiming clairvoyant power).  FYI – Good luck predicting the next “Top” too.  Lots of people did not sell when Bitcoin hit $19,000 per BTC.

There you have it, based on my perception, these are the options we are presented with when Bitcoin prices take a nosedive.

Let’s be clear about something: there is no such thing as a meaningful Bitcoin price prediction. It just isn’t possible with the current structure. – Jeremy Arnold, Internal consultant. Past analyst/co-founder, on Quora (article presented on Forbes Website)

Best of luck to you, and may your portfolio go TO THE MOON!
Disclaimer: This answer is offered as opinion and is not a recommendation on investing. Please consult knowledgeable advisors and professionals you trust when seeking investment advice. I currently own BTCS stock.
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The Coin without a Country: Bitcoin

OK, Bitcoin prices trended Downward.  Has the sky fallen?
Just like stock prices, Bitcoin is finding it’s newest pricing Plateaus.  However, with the Price Volatility of bitcoin, understanding these “trading ranges” is like reading tea leaves to forecast the future.
Bitcoin is a global Phenomenon.   It’s not just a product to hold and invest in, it has a valuable purpose; if your local fiat currency is suffering from inflation and devaluation (or worse), you need Bitcoin to move money around, or get it out of the country without paying enormous fees.  In developing countries, women can conduct business in Bitcoin on a smartphone.  Muslim women who cannot enter a bank without a man to “conduct transactions” for them, can have a smartphone with a Bitcoin wallet under their Burka.  Their children bring the product to market, and they receive Bitcoin in return.  It solves a problem in these countries, and Bitcoin can be more stable than some government-backed currencies!
In the US, the dollar is a strong currency.  Bitcoin is not a necessity.  Many of my fellow Americans only see it as an investment medium; they would never consider using Bitcoin to build a business, as the dollar is more stable and respected world-wide.  The number of businesses that accept Bitcoin for payment is steadily growing.  Led by global businesses like Overstock, there are now hundreds (if no thousands) of businesses and even more individuals accepting Bitcoin for payment.  Even Craigslist is in on the act, with an “Accept Cryptocurrency for payment” check box.
While we watch Bitcoin, and try to understand where it’s “trading range” is, intelligent followers of Bitcoin realize, sometimes painfully, that it can move to higher or lower ranges in minutes.  Predicting the price is like forecasting stock prices or the weather.  The one thing I can assure you of, without hesitation, is that the price will change.  Most of my friends and associates are not panic selling, they are patiently waiting for the price to rise.  They have a lot of confidence in Bitcoin, since it is global and useful beyond mere investing.  Many of the “Alt-coins”, created in the image of Bitcoin, do not have wide acceptance, and are like “penny Stocks” and IPO’s, where the company behind the IPO can’t get traction and loses its value.  Many Altcoins have been mined, had their run, and become worthless (Not all are worthless, Companies and countries are going to be mining their own Altcoins).  With no lasting staying power, merchants, or ability to maintain their growth beyond a brief run, Many Altcoins fade out, while others are listed on the exchanges and actively traded.
Bitcoins global base, large pool of owners, miners, businesses, and exchanges give it more credibility and staying power than other cryptocurrencies.  There is also a finite amount of Bitcoin – so having some popular alternatives (Litecoin, Ethereum, etc.) is good – think of it like having choices between state-backed currencies; Dollar, yen, shekel, ruble, Mark, Pound, Peso, and the coin without a country, Bitcoin. (Did I just describe Forex trading basics?)
Whatever you are invested in, keep an open mind – Bitcoin is the “New Kid” on the block, and will have growing pains.  The sky has not fallen, but has got a few cracks in it.
(Disclaimer: I own Bitcoin, these thoughts are mine and not advice on what to do with your Bitcoin – just my personal view.)
 
Thanks for reading my blog, (and feel free to share)
Best of luck in Bitcoin,
Alan
More Reading:

Don’t just take my opinion:
How to Start a Crypto Portfolio – Robert Leshner – Medium – Medium
Should your portfolio include bitcoin? Yes, but just a 2% position, says analyst – Marketwatch
Bitcoin: Mastering Bitcoin For Beginners: How You Can Make Insane Money Investing and Trading in Bitcoin (Bitcoin Mining, Bitcoin trading, Cryptocurrency, Blockchain, Wallet & Business)

Best of luck to you, and may your portfolio go TO THE MOON!

Bitcoin Watch – Men’s Wrist Watch – Classic Black Leather | Bitcoin Gift | Bitcoin and Ethereum Coin – Crypto to the Moon

Disclaimer: This article is offered as opinion and is not a recommendation on investing. Please consult knowledgeable advisors and professionals you trust when seeking investment advice.
 I currently own BTCS,  I also own some Bitcoin and Litecoin.

 

Bitcoin Tee Shirts – Yoda Tee Shirts