Inside our crypto-circles there is a lot of talk about Bitcoin being ridiculously low and that it hasn't really got anywhere else to go but up. A lot of people were saying such things at $10k... $6... and even at $4.5k people were trying to call bottom.
We must first understand that an asset will fall as much as is needed until it finds it's true value. That is how the market price action moves... oversold/overbought, it all comes down to the valuation of the underlying asset. When Bitcoin soared to $20k+ it's not because that is the true value of the asset at the time, no, not at all. It soared because the market was pumped with a lot of what I like to call 'dumb money' - that is, inexperienced regular people wanting to become traders/investors in the financial markets. One look at Twitter/Instagram and you'll see it is flooded with overnight Crypto Guru's claiming to be masters of trading and when things go against them "I didn't say it couldn't go down more..."
Bitcoin can fall as much as it wants, why? Because it has never before spiked up so high and there are many untested levels of support. I have always said a fall to $3-3.5k is likely but I wouldn't rule out $1k when looking at Bitcoin from a true value perspective. - Until BTC is utilized and more broadly accepted, this valuation will not rise by much. However, with that being said, it does not mean the market cannot reverse.
Although I value the Bitcoin very low, there is enough liquidity and with enough influence, it can soar at any time. It is extremely volatile so no one can make any guarantees as to how low it will drop before another surge - and that's if we see another surge.
I have started to buy BTC from last month and have been triggered into a few buy positions already but some are still pending. I'm waiting to be triggered in at the following levels:
- $3000
- $2500
- $2000
- $1500
- $1000
- $500 - a bit cheeky this one but I won't rule it out!
I've just finished building a large mining workshop in the back of my garden and during the process, I had builders, plumbers, electricians and solar panel salesmen in my home to quote me on the different jobs needed completing and when they saw the mining rigs, they all asked what they are. When I told them it was for mining cryptocurrencies 'like bitcoin' they all replied: "I thought bitcoin is dead now, no?"
Of course, I corrected them and explained the way the markets work (impulsive + corrective waves) and that we are currently in the midst of a multi-year bear market and they understood. They weren't all convinced but this is exactly what I mean, how can we price something so high as $20k when it's clear that Bitcoin is yet to be properly adopted.
So you see, outside of our crypto-circles, there is yet much work needed for Bitcoin and alts to be mass adopted. It will definitely happen, I have no doubt about that but how long it takes will depend on how we approach the situation.
The more we educate people on the true benefits of the blockchain, how financial institutes and all companies are utilising it and how one day we will see mass-adoption and that getting in at this stage is still very early, the more we will help increase the true value of Bitcoin.
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