According to the firm Autonomous Next, the number of hedge funds investing in digital assets like Bitcoin has grown rapidly to more than 100. Since the launch of Bitcoin Futures on the Chicago Mercantile Exchange in December 2017, it shouldn’t be a surprise to anyone why the price of Bitcoin is down 50% from the high.
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Only Retail Investors chase price and buy high and sell low, while the Professionals buy low and sell high. The Hedge Funds have purposely sold Bitcoin futures to get in a better price.
At the moment, there is a war taking place between the buyers (Hedge Funds) and the sellers (Retail Investors) called capitulation. That line in the sand was at $9000. Capitulation is when investors give up any previous gains, by selling, in an effort to get out of the market. Capitulations are outcomes that result from the maximum psychological and financial pain that can be endured by a group before throwing in the towel. The Retail Investors are throwing in the towel after seeing a more than 50% correction in the Bitcoin price to the buyers, the Hedge Funds. With 100s of millions of dollars to invest, we are witnessing an accumulation phase by the Hedge Funds between $6000 and $9000.
The Hedge Funds are loading up and buying from the Retail Investors. But to fill all their buy orders, as the sell orders dry up, price must go down to the next stack of sell orders. We are approaching what I believe will be the bottom of bitcoin at $6000. My first target is $12,000 and my second target is $17,000 over the next 3 - 9 months.
The easy money has been made over the last 12-18 months. With the big boys in the game now, the rules have changes. The question is, are you ready to play to win with a new play book?
This post is my personal opinion. I’m not a financial advisor. Do your own research before making investment decisions. By reading this post, you acknowledge and accept full responsibility of any gains or losses.
nice answer!
Could you outline how "the big boys" will affect this market? Will it be more controlled or predictable?
With no regulation in place, would this not lead heavy manipulation players with significant holding?
Since I am investing long-term with trust in the technology behind cryptocurrency, how does it my long-term investment strategy (consolidate into more establish crypto, further diversify or keep the status quo with 20% BTC 40% ETH and 40% Altcoins)?
The "big boys" see the opportunity and want to be a part of the space, but with so much capital at risk, they won't enter the space w/o more regulation. With regulation in place, I think the price swings will be more controlled, but also predictable and manipulated. The "big boys" always leave behind their foot prints, so the charts/price action will allow us to know when they bought or sold. The markets are nothing, but repeated cycles. This is the Internet 2.0. There will be boom and bust and a new Amazon, Netflix, Apple etc. I believe in the space long term because block chain technology will be bigger than the internet. I'm minimizing my risk by investing in the infrastructure plays, like Eth, Neo, Icon, Ripple, Stellar, etc. Did I answer your question???
Thank you so much for your reply! I am also investing in the same coins except for ICON. I also join this market with the mentality to support the technology and infrastructure that comes with it.