Throughout this article, I would like to alert you to the danger of wanting to invest or buy on the price zones where we are currently on crypto-currencies, and mainly on Bitcoin. Although I am convinced of the long-term upside potential of cryptocurrencies, which should also be called crypto-assets, I nevertheless believe that the recent price structure should sound the alarm.
Bitcoin has seen its value increase by nearly 250% in 6 months almost in a straight line, with no pullback or correction as you can see in the following graph.
After a bullish run of nearly 6 months, a surge of nearly 250% and a 50% retracement of Fibonacci of all its previous crack, I think the bullish potential is exhausted and a long correction awaits us.
This price structure is very strange because it is particularly parabolic for an end-of-crack recovery. We are definitely in a bullish trend, but I think this momentum is coming to an end and I find some posts and answers of so-called investors on the Internet that predict, like real gurus, that BTC will be at $200,000 at the end of the year, dangerous.
The completely parabolic structure of recent months should alert you to a potential price reversal or, at the very least, should encourage you not to invest now or even to pull out some of your positions for those who have entered lower.
As you know, if you are interested in the field of finance and financial markets, the market rarely moves from point A to point B. Generally, it proceeds by bullish impulses, followed by downward corrections, then moves on to new phases of impulses, etc. That being said, one of the exceptions to these impulsive phases – corrective phases- is precisely the structure of the “bubble”.
But what we have to do lately reminds me of the 2017 bubble: the parabolic pattern into which many investors have rushed, encouraged by a completely irrational rise in prices and reinforced by the mass media that promised them gold and glitter. The end of the story, we all know it: many people have bought at $15K or $17K and found themselves stuck holding a permanently falling asset, and who still took a year to finish its crack.
This is a basic rule that unfortunately, too few people respect: buy low to sell high.
However, as you can see in the following picture, the prices are definitely not low.
If we average the increase of the first 19 crypto-currencies (we voluntarily forget Tether), the increase is ”only” 166% … in 6 months…
That’s the reason why I’m looking for a short entry. I am, to be frank, very surprised by the bullish potential, especially of Bitcoin in recent months. Unfortunately, all for a purpose and I doubt that wise investors are buying at these prices. I can even tell you that it is very likely that they are currently selling the disillusioned individuals who are having fun returning home now thinking that ” Trees grow to the sky”.
Again, it’s all about timing. I’m not saying the prices are going to turn around here.
Perhaps we will go higher, visit the Fibonacci 61.80 % retracement located around $13,440. In trading and investment, everything is always possible.
I just think that the areas we are currently treating are good for sales/short and I would like to share my impressions with you and advise you to be as cautious as possible about all this bullshit you can read on the Internet and on social networks – some of them, let’s face it, will at least have made us laugh -.