If you followed are BTCUSD trading advice yesterday you should be in the money. If you are a holder then the pain continues.
Don’t get us wrong – we are bitcoin believers but we also think taking the money off the table is a good idea so you can buy back in later.
Here’s a look at the short position we suggested yesterday, but zoomed in on the 1-hour chart (see your winnings in the darker green shaded area):
We have given up on trying to call the bottom for bitcoin and it is time to face reality.
That reality means a price that will continue to trend lower, even if Tom Lee from FundStrats is sticking with his $15,000 year-end prediction.
When ETFs are again rejected by the SEC (VanEck and Solid X had a meeting with the regulators last week to try and smooth out some of the obstacles to approval), expect that decline to accelerate.
None of this means that the fundamentals are necessarily deteriorating for bitcoin. Actually quite to the contrary some would say.
Venezuela, where the economy has been imploding, bitcoin transactions are at record highs, as the coin.dance data from localbitcoins shows. The price of the Petro has also risen substantially after the Bolivar was devalued against it. Another country being sanctioned by the US that is taking to crypto is Iran, where a national crypto is also being planned.
And the Lightning Network side-chain scaling solution is gaining traction, with capacity jumping 300%, as data from 1ML.com shows:
News that OKEx exchange in Hong kong is ramping up delisting of alt coins is a positive for the markets, as it clears out the deadwood where liquidity is lacking.
OKEX got rid of 50 alt pairs back in October and has today delisted a further 30.
Among the deleted coins are DENT, Unikoin Gold (UKG) Raiden Network token (RDN) and Iconomi (ICN).
Critics weigh in
Michael Casey writing at CoinDesk make the valid point that we Brough this on ourselves by fanning the flames of speculation as we welcomed in the get-rich-quick-crowd towards the end of last year only to pay the price today for that “irrational exuberance”.
Atuyla Sarin, writing for MarketWatch, thinks the party is over for bitcoin:”But that was then. With the price of bitcoin BTCUSD, -4.14% having fallen almost 80% from its peak, and now trading well-below the support level of $6,000, everyone is wondering where it goes from here.
The answer is, a swift and painful drop to zero.”
He bases his assessment on the fact that cost of mining has fallen below the rewards, failing to appreciate that the difficulty mechanism exists for precisely such circumstances – difficulty adjusts to cheapen the cost of mining.
With that sort of ignorance still prevalent in the mainstream there is a way to go before crypto gets a fair hearing.
To be fair he also bases his argument on cash flow, or the lack of it as far as bitcoin is concerned, likening it to gold.