After Bitcoin gets to certain heights, and the natural retracements begin, people often say it’s “crashing.” But the levels they’re talking about it “crashing” to are often higher levels than the price was living at before.
You have to wonder whether this is positive or negative for Bitcoin. For the savvy investor, it doesn’t matter what the headlines say. If you’ve got a sell target, you wait for it.
Sometimes, you could wait for years.
We may yet see people selling off as the price nears the previous all-time high. People who were involuntarily driven to hold the asset may dump it now that they are finally free to do so.
But others still will vacuum up it up.
Out in the world, there are pockets of people desperately hoping for cryptocurrency to “fail.”
The trouble with Bitcoin, for example, is that a considerable portion of its coins never trades. This makes it more difficult for the price to “collapse” in the same way that a stock price might, where sell pressure drives it down beneath a certain point.
Overall, a significantly small portion of the Bitcoin supply trades. This determines the price, as the average taken across markets.
Some places, like Coinbase, often float a higher price than elsewhere. For whatever reason, during a bull run, Coinbase will be quoting prices up to 1% higher than elsewhere.
Much of their business is retail sales, which could be the reason. People at that level don’t mind paying a small premium, and people on the other side of the equation benefit as well.
Regardless what’s going on, it’s during these times we can expect the charlatans to emerge in force. They’ll speak of the millions they’re making on Bitcoin’s 1 and 5% gains; they’ll talk of how their strategy will fill your retirement account overnight.
For better or worse, these people are a sign of good things to come. As things get better and better in the market, a shadier class of people comes around.
As long as you know to watch out for them, you can thrive in the market without regard.
Charlatans will tell you they have an inherent understanding of the market. The fact is, in the crypto space, no one really does. The market does what it wants to and when it wants to.
If the market decides to crash $1,400 in a few hours, it can’t be blamed on any one exchange. If the market decides to take off and triple in a week, you can’t thank one class of investor.
Everyone, together, propels the thing. And everyone, collectively, brings it back to reality, as well.
The only real resistance to be watchful for is the people who bought in around these levels the first time they got here. Those people might have held against their will, and might be looking for an exit.
Otherwise, it’s hard to determine what might break the bull this time around. Would an even bigger hack of Binance do the job? Or might it take even more than that?
If we accept that it’s a speculative asset, then we have to admit that there will be an end to the cycle. The only question is where it will all settle.
Click here for a real-time bitcoin price chart.
Last modified: June 23, 2020 7:33 PM UTC