We are at a very risky juncture in cryptocurrency and nobody can tell you for sure what will be the outcome. I am trying to grok it all and provide various scenarios, but I also can’t be sure those scenarios will occur and when they will occur if they do. Speculation is inherently uncertain. We play the probabilities and try to be sufficiently diversified.
Having said that, I will tell you what I think will happen and what I am doing and would do if I was just entering crypto now.
My Litecoin expectations were written a few days ago.
I think we are very near to a blowoff top in BTC and in crypto in general and are looking at a crash later this year or early next year. I could be wrong about this, but I bet you can find many seasoned traders who agree with me.
I am thinking BTC is going to peak some where between $5000 and $8000 (to perhaps go higher some year or years hence after some crashing). For it to not peak but instead become stable at these higher prices would require I’m incorrect about the threats coming to the SegWit “upgrade” (fork off actually) of BTC.
I am concerned about a potential difficulty readjustment self-imposed “attack” on BTC, because the readjustment period is every 2016 blocks which is roughly every 14 days . The next readjustment is roughly 7 days from now when SegWit is activated. The theory posited by others (which I linked to in other comments on this blog page) is that if the price is driven high enough and thus the difficulty, then when the price peaks and if it drops significantly enough, then the hashrate will decline commensurately such that the difficulty is proportionally too high and the block chain slows down proportionally to perhaps 20 mins per block (for halving of the price) and 28 days until next readjustment. A 2/3 price drop would be even more effectively with 30 mins per block and 42 days until next readjustment to correct the slowness. Since Bitcoin Cash (BCH) and Litecoin (LTC) have faster readjustment periods, their difficulty keeps up with price changes and thus hashrate would be incentivized to move to those coins from SegWit as the price of those altcoins rise while BTC-SegWit is declining. It is presumed the market would see this as a rising legitimacy of those altcoins and it might become a spiral, especially with the confirmations on BTC-SegWit slowing down to 20 to 30 mins then the backlog of transactions and transaction fees would increase especially with the stampede of sellers trying to offload BTC-SegWit to rush back into the much faster 2.5 minute confirmations of Litecoin and the larger block sizes of both LTC and BCH. What can also happen is right after BTC-SegWit difficulty is adjusted down after 28 to 45 days, a spike up in the price could cause the block period to decrease to maybe as low as 3.3 mins which could cause orphan rate (and 0-confirmation double-spends) to increase. In short, possible havoc on BTC-SegWit leading to massive confusion in the market.
Sometime later if SegWit transactions ever accumulate, I had also posited another long-range chain reorganization attack which I am not sure will happen, but if it does it is going to wreck confidence in Bitcoin perhaps entirely. Eventually I think the market is going to realize BTC-SegWit is not viable but we have chaos until that realization is drilled into stubborn minds.
It appears to me that BCH and LTC have been anti-correlated to BTC for obvious reasons. Thus as I have been selling BTC on the way up, I have been trading some of it for $100 bills under my mattress (others prefer precious metals but I see those declining also and US dollar up, at least initially in 2018) and the rest I’m trading for LTC and BCH. Others have also traded some for ETH and perhaps a few other altcoins. NEO has been another but I was busy doing technical work and did not pay attention so I missed the huge rise of that one. Note I had advised buying Byteball back when it was $1 million marketcap (I didn’t do so because my focus is not on trading but on my technical work and Byteball was not available on the exchanges I had access to at that time).
Any altcoins I am buying now, I personally plan to sell. My next price target for LTC is $75-80 and 0.02 - 0.032. For BCH roughly $1000 - $1800.
After the rotation out of BTC-SegWit into altcoins, I take profits into fiat and then I am out of crypto and I will be watching the fireworks. I will come back in when the chaos has resolved or I see a good opportunity that I understand well (such as my own project Hypermesh or if the real BTC becomes a solid distinct chain I can understand, perhaps with my assistance but I do not know how much I can do and fast enough).
If I had any BTC that I had held since 2015, I would probably hold that. I would definitely not be buying any BTC now to hold through the coming chaos, because it could possibly get stolen by a long-range chain reorganization.
This is a dangerous time to be coming into crypto.
However, if I am incorrect about all of this and crypto skyrockets to the stratosphere while I sell out to fiat, then so be it. Others may have a different perspective and always price their net worth in BTC unit-of-account. Nevertheless, I see the US dollar becoming very strong in 2018 and risk assets taking a dive before they slingshot up again. But nobody knows with certainty the future. Yet I base my understanding on studying the crypto sector and having some technical knowledge, as well I read Martin Armstrong whose macro economic modeling has been quite impressive since the 1980s.
Disclaimer: this all shared for entertainment value and every reader is responsible for their own investment and speculation decisions.
Thanks for sharing your views. I am myself a partially educated crypto investor and also following Martin Armstrong. If i tell you you that Martin Armstrong Economic Confidence Model turning point for Bitcoin is 23rd of August, current date for Segwit activation. That the last ECM turning point was 10th April 2013, when Bitcoin lost 63% of its value with Mt Gox. Does it change your forecasting? Thanks.
Thank you for the very interesting post. How did you calculate these dates? Did you somehow learn how to apply MA’s model to BTC?
Well if your model is correct, it adds confirmation to what I am expecting which is that BTC is going to crash and BCH and LTC will initially rise, and then the entire cryptocurrency scene will crash because all cryptocurrencies are centralized scams.
Your comment is interesting to me, but I must note that until you tell me more about how you obtained this computation, then I must assume you’re some crackpot. But I’m not being critical of you. Please tell me more.
Well, i have been to Martin Armstrong Orlando's conference in 2016 where he distributed computers to all attendees, I simply used one simple software on it to calculate dates, after the idea on Tone Vays at http://www.libertylifetrail.com , i used the same starting date as him, just got the 23rd august 2017 instead of the 11th august 2017. I also got an acquaintance doing the calculations with an excel and finding the 11th. So i do not know what is different with the software calculation but it gives different dates. As nothing happened on the 11th, I have been waiting for some days before the 23rd to searchif someone was envisioning something happening for that date and... found you. Confirmation bias or real thing, only time will tell!
I did not find an easy way to PM you, you might be interested in joining an ECM trading Slack group I created about a year ago. Some of the information i recently read, is partially confirming some of your forecasting.
Finally, I personally appreciate some forecasting you do, taking into account NWO and information age. You are few years ahead of me on these topics.
Any central place (e.g. twitter) where I can easily follow your thinking process?