What goes up, must go down
This year was fenomenal for bitcoin, the amazing rise in price, and coinbase adding over a million users in a single month, did some great things for widespread adoption of bitcoin and blockchain overall. But what goes up, must go down. Here are the main reasons why I think btc will be in a bear trend in Q4/2017
The FUD ain't over
We have all witnessed the fall in price on September 14, part due to Jamie Dimon of JP Morgan and part due to rumors around China, the market was bleeding that day. Everybody knows that bitcoin is volatile, but I am sure that you didn't expect waking up that morning and seeing bitcoin down almost 1k$. Bitcoin is volatile, and people will always be people, they will panic sell. The dramatic fall in price tells us that the price of bitcoin is ready to go down in case of bad news. But China isn't over regulating bitcoin, they will bring in more regulations, and as soon as rumors get into western media people will start selling again.
Volume is low, and holidays are not even here
The end of the year traditionaly has low volume in most markets, it's the holiday season after all. But bitcoin was an exception in Q4/2016, it actually peaked volume in Q4/2016. But please take note of the distribution of volume, the majority of it was in china, some sources say upwards of 85% of the volume was in chinese major exchanges. History will not repeat it self this time.
Bitcoins current volume is among the lowest it has been, there isn't much demand currently and it all ties back down to the 1k$ crash a few days ago, think to your self, who would invest in something that has just crashed such a high amount, maybe you are a HODLER, but most people would be very sceptical of buying.
Segwit2x uncertainty
What is going to happen in November? Truth be told no one knows, and that means uncertainty. Uncertainty brings fear, and fear brings doubt. Uncertainty is stressful. But what’s not so obvious is that uncertainty is more stressful than predictable negative consequences. This lead to panic selling. Segwit2x is a hard fork, not a soft fork like Bitcoin Cash. This means there is no replay protection, and with people panic selling, all hell could break loose.
Tehnical analysis
Go and take a look at the charts, it looks like a head and shoulders pattern could form. This pattern is believed to be one of the most reliable trend reversal patterns. It is one of several top patterns that signal, with varying degrees of accuracy, that an upward trend is nearing its end. Technical analysis supplements my previous arguments.
Conclusion
Due to a high level of uncertainty I firmly believe bitcoin will be in a bear trend in Q4/2017. While I am optimistic about bitcoin longterm and believe in the tech behind it. I think it is time to short it.
Sources:
https://www.coindesk.com/459-million-bitcoins-exchange-volume-reached-peak-levels-q4/
https://www.theguardian.com/commentisfree/2016/apr/04/uncertainty-stressful-research-neuroscience
http://www.investopedia.com/terms/h/head-shoulders.asp
https://cointelegraph.com/news/bitcoin-user-base-surges-coinbase-adds-1-mln-users-in-1-month
Some very good points in your article I have forwarded you and Resteem your post
Thank you for your time,
I will return the favour :)
I read your article following your post in the comments of my article here:
https://steemit.com/bitcoin/@grizgal/lack-of-belief
Whilst I agree, btc may well enter a bear market in the near future and could experience some massive drops in price, I don't think that rules out a huge increase in price over the next few years! My post shows where we have come from in the last 5-6 years, experiencing gains of over 1666X. So gains of 100X to take us to 500k per coin may seem ridiculous but when compared with the past are completely reasonable.
Absolutely, quite possibly next year even :)
Nice first post @skydweller.
The most important for me is really that sentence : What goes up, must go down
Lot of people are always forgetting that and dream about an increase which will never finish but it never happens... Trading is like life, everything born, has a life and die. The life is a chart - the chart is a life ;)
Upvoted
Thank you for you thoughtful comment !
Good post.
Thank You !
Thank you for reading :)
Trend is changed !
=]
Great post skydweller! If you are right the LTC trade will still be valid, it will just take more time. If I were you I would still stock up on LTC and BTC! Make an introduceyourself post! Haha.
Thank you ! Will do in the upcoming days :)
Hey @hansenator,
here is my introduceyourself ;)
I just finished reading. I agree with each point. I think after the year is over, everything will change enormously.
Thank you, next year is going to be great just as this year was !
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STOPVery nice analyzed.
I agree with you on all points and still hope for a bullish market.
I Follow you.
Thank you for reading!
Well my friend...well laid out...I think you spelt "phenomenal " incorrectly...otherwise your points are clear...
I chuckle you write this article on a day the market is getting a boost upward...but good to keep us all in perspective...however...I've seen some TA that suggests a major run up to $7000+ before a major correction...perhaps the fourth quarter will be the fall..
Keep up good work...I may suggest adding some charts if going to add in TA analysis...
Thank you,
yes you are correct I spelled it wrong xD
Only time will tell,
All the best!
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STOPThose are interesting thoughts, but I don't think it's going to be a bear market. I think it'll continue to go down and up, but always trending higher has it has most of this year.
Remember, we're still at a very low adoption rate, so there's a lot of folks that have still not heard of cryptos, and more and more people will be joining.
I'm going to be buying the dips and making sideways plays like I did this last one, but I'm definitely not betting on cryptos going any lower than they did this last time :)
Either way, best of luck to all of us!
Thank you for taking the time to read the article. Long term bitcoin will grow ofc.
I am just not sure for the end of this year :)
Of course, we both agree on that. I just don't think it's going to fall further than it already did so far.
Time will tell :)
Certainly for those playing the market regularly, it is more important. For HODLing, I think it makes little difference. Just buy what you can when you can and HODL. :)
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STOPThis post recieved an upvote from minnowpond. If you would like to recieve upvotes from minnowpond on all your posts, simply FOLLOW @minnowpond
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