Red market got you down?
Imagine all your friends and family being gunned down in the streets!
Feel better now?
I weirdly do.
It's just money.
Sunday, bloody Sunday!
My word, what is going on? So all the overleveraged longs were liquidated four days ago. It looked like we were bottomed out and ready to pop back up, even if it was just a dead-cat-bounce. Instead we crash back down near the $30k support line for the second time this week. Not a great sign.
Perhaps some of you remember back in January when I was flipping my shit over this bull market. Price got too high and it crashed too fast. Most importantly, this was all happening too fast. There was no way we were going to be able to maintain this momentum for an entire year.
2017
In 2017 we didn't break away from the doubling curve until the summer. So the fact that we were so far above the curve at the beginning of 2021 was very alarming to me. I made a lot of claims that BTC might crash back to $20k, but instead we held support at $30k and just kept going up up up.
Ah well, now we are testing $30k again, and if I'm being honest that's not surprising at all. Until now, I just assumed that this was the strongest mega-bubble of all time because of the institutional adoption. Nope, rather the market does what it always does: gets greedy and tries to price these things early.
This is exactly what happened in summer 2019.
The market tried to price in Bakkt institutional investment. From $4k we spiked to $12k back to the doubling curve right after launch.
This is exactly what happened in Summer 2016
The market didn't realize how bullish the first halving event was until after the supply shock hit and the price mooned months later. During the second halving the market attempted to price this in early: again it was a complete fail.
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|---|---|
| $800 | $1.6k | $3.2k | $6.4k | $12.8k | $25.6k | $51.2k |
We still find ourselves well above the doubling curve for Bitcoin (over 50%). I'm sorry, you wanted your investment to go up more than x2 every year on average? That's just greedy. x2 per year is still the best investment of all time. Hands down period the end. Bitcoin is only worth $20k, and I've been saying that since the beginning of the year.
So what happened here?
The market tried to price in the mega-bubble early once again. And once again this was a huge fail leaving everyone falling flat on their faces. We can still easily touch down to $20k, and if we do I suggest we all buy the dip if possible.
Will $30k hold?
Who knows?
So my little annual cycle chart has really been getting wrecked by this weird market. Feb, March, and April were supposed to be consolidating months, but all we did was consolidate at a bubbled price. Now we are back to December/January prices as we move into summer, which makes sense according to the chart, but Summer could still be a dud.
Very often if we just had a bull run in Q4 that means the following Q2 will be a dud. Also if we had a solid bull market in Q2 the following Q4 is often a dud as well. We very rarely get 2 bull markets in a row. That normally only happens in the mega-bubble years. Considering we are in the mega-bubble year of 2021 I'm still holding out hope, but at the same time a crash to $20k at this point seems just as likely.
For me it's always been about Q4 2021 for the last 3 years. I'm not really phased by the current drop, in fact I feel like it sets us up for a Q4 run even better at these current prices and fear-factors. At this point I'm not sure what summer will be like but then again I don't really care. My prediction has always been $250k-$400k at the end of the year. And I made a bet with @yabapmatt that we'd hit at least $100k by then. I've yet to lose one of these bets. Don't plan on starting now.
But honestly I wish I was wrong.
I don't want a mega bubble. As I've already explained a few times now: mega-bubbles are terrible. Volatility is bad. If Bitcoin could just make consistent x2 gains every year that would be way better than what we have now. Ironically, when every we get this kind of stability it is exactly the cause of everyone loading up their bags and making the market unstable again.
Point of Guaranteed Return
I warned everyone in March that $50k BTC was the point of guaranteed return. Selling some there was an automatic safe play because according to the doubling curve we were almost guaranteed to come back to $50k no matter how high the market got. My, how that advice has aged well... I wonder if anyone actually took it: I certainly didn't. This metric is still in play now: I think we are guaranteed to be at $50k by the end of 2022. Even at $32k BTC, that's not a bad investment for less than 2 years. Pretty amazing really if compared to the stock market.
Hive
Speaking of smart hedges: my last post aged pretty well. Limited time offer: HBD is finally worth holding! Yep, feeling pretty good about shoving all my blogging rewards back into HBD. Easy money.
On that note even after all this blood in the streets my upvote is still worth over $5. That's over $50 a day, over $1500 a month. Crazy stuff. My crypto yields are still well above what I would need to live off of. Not even counting CUB in this equation or my blogging rewards. Small miracles.
Conclusion
We can always count on the market being greedy and impatient. Everyone in the market wants to maximize their gains, and they don't care if they have to stand on the backs of others to do it. I think it's pretty clear there is some blatant manipulation going on in the market right now, but at the same time it's very intelligent manipulation that is possibly even deserved. Going short when BTC is x3.25 higher than the doubling curve is very rarely going to be a bad play. Now we are down to x1.625. Still rocking it but everyone is now wallowing in extreme fear.
I have no idea what the summer holds, but history has shown that summer always trades flat or up, so I'm optimistic. Even though we are "only" x1.625 above the doubling curve that's still basically exactly where we were in 2017 around this time of year.
By all accounts, we are still participating in one of the strongest Bitcoin mega-bubbles of all time, and most people are so afraid of this crash they don't realize it. Maybe that's the point: the market can't know or else it will get greedy and try to price things early again.
Posted Using LeoFinance Beta
that made me laugh :)
Nice read and good on you for making a living with crypto
Posted using Dapplr
Don’t you think the ban on mining in China will make a big dent on the price of Bitcoin? Perhaps it already is...if miners will have to set up mining in more Bitcoin friendly regions, it might take a while and for the markets to balance up....except the China ban has very little to do with bitcoins dumping price.
Posted Using LeoFinance Beta
Why? Was China defending the network from harm? Is Bitcoin under attack and China is allowing the attack to get through? Mining is the process of securing the network by expending resources. If the network isn't under attack: losing miners doesn't matter.
In fact everyone was saying that the mining centralization in China was a very very bad thing. So which is it? Do we want Chinese miners or not? It doesn't matter either way to me. This is a worldwide effort and the short-term movements aren't important. I have no reason to believe Bitcoin is worth less than $20k (doubling curve) when we are trading at $34k.
I certainly didn't take your advice. Now it's time to work my ass off again to get more fiat into this ponzi. :D
Posted Using LeoFinance Beta
My predictions get wrecked, so I will still use them in conclusion.
Classic brain pattern problem, even if what I believe in is wrong, I will still believe it.
Yeah this is gambling so not really comparable to whatever you're talking about.
Professional gamblers only need a 5% edge to win big.
That means you only have to be right 55% of the time.
I’ve watched you be right a few time already. For my own selfish reasons, I’d be happy with a megabubble because I have my target price for taking big profits and I’ve yet to reach it, but I’ll be cool with something more sustainable, mostly because I think it’s good for Hive and I like this place.
If we crash to 20k we wouldn’t be able to maintain a multi year bear market unless the whole game is over, and I won’t consider that possibility til I see all the large nations and billionaires getting together to make an alternative that they can agree on.
Luckily/fortunately no. I have not traded anything. I am just/only holding.
If it continue like this, then it will rather be $25k-$40k. :D
How often has this been true? It seems like something I might review but it also could just burn me.
Posted Using LeoFinance Beta
It's basically always true except during the peak of a mega-bubble blow-off top.
I like your craziness. Makes me feel good about my craziness. 😂
No one said that was crazy at $50k.
What changed? Two weeks of blood in the streets.
Severe psychological damaged has been caused.
Almost feels like it could be measured on Twitter.
In fact there is a project that measures user's "happiness" on Twitter I was listening to a Podcast on it.
Go to -26:20 to listen to why they had to remove the word "thirsty" from the algorithm.
Crypto Twitter swarm is not a happy subset. https://gimletmedia.com/shows/reply-all/kwh96n
What are your thoughts on hive overperforming other cryptos during this bear but underperforming during the bull? I mean we are almost touching steem at this point.
Could hive become a "soft hedge" during bear for the next months?
Hive price action has been uncorrelated to the larger market for quite some time.
It often makes a good hedge.
The pump & dumps are on a different schedule.
Your chart makes preficting the movement of the market seem so easy.
The fear keeps blinding and robbing people of the future rewards. I think the next crash is going to even have a worse effect. The bull run of 2021 is not over. A new ATH might be on the way, and the next crash, well... I just hope the speculation is wrong.
bear market of 2022 is going to DESTROY souls
sad but true
And like evolution, only the strong will survive.