When to Buy Bitcoin Now Post-Crash and Why
This morning, Bitcoin crashed violently yet again after a horrible day yesterday, reaching as low as $9k at the time of recording this and currently hovering around $10k. Looks like we have some heavy support at over 9k memes. In all seriousness, I bought some Bitcoin at $9.8k (which was rough because previously Bitcoin dipped to $9.9k then went back up to $12k in a few hours) and am ready to buy a lot more at $8.3k.
$8,000 seems to be a level that many technical analyst agree on, regardless of metric. Whether it's basic support and resistance, channel support and resistance, simple moving averages, Fibonacci retracements or Elliot wave analysis, everyone seems to hone in on this one level. Furthermore, media outlets are beginning to mention this level to so it has become somewhat of a "Trinity" level.
Given the fact that so many charts line up to this level, plus it's a nice psychological level, I suspect we'll find substantial support here and potentially a bounce. As a result, I will be investing heavily at this level if we reach it. As always, it is possible that Bitcoin declines even further past this level. However, I have more confidence here than anywhere else so I see it as a healthy "probability" bet.
If you're not calm right now, then it likely means you didn't scale your position in Bitcoin correctly - You have too much. Most newer investors have limited experience with understanding their own risk profiles, so this might be a good learning experience and I encourage you to take note so you can sleep better in the future.
Lastly, you know the drill already but... I prefer Bitcoin over altcoins and still suspect dominance to rise to 45 - 50%. Something I forgot to mention in the video is I am watching a few altcoins closely and am prepared to buy if they crash down to certain levels relative to Bitcoin.
What are your thoughts on this volatile market? For once we consolidated and broke out to the downside - been a while since we've seen that. Hope you're all having as much fun as I am!
someone said the 1st BTC futures contracts are about to expire these days :D
Deffinantly suspect those futures have some influence on the current state of the crypto market.
Not directly, since they dont actually trade bitcoins, but contracts over Future prices.
They do ahve an effect, as i do see a corolation with pump and dum patterns in relation to when futures is bought and sold. But not anywhere close to what we see happen now.
From what ive seen lookin at them now and then, they have been buying and selling at sertain intervals within 1 contract periode.
But yes, cboe futures for January ends today.
A future contract is an "agreement" between two parties that one will buy an asset (be it BTC, gold, or whatever) and other will sell it at the contract established price, no matter what is the price in the future. One of the parties will end up in a loss.
Futures trading contracts like the CBOE one is where a bunch of people buy or sell a contract that have an expiration date.
At the expiration date, the contract is settled, and whoever have the contract in the hand will have to make the settlement (is a bit more complicated than that, but its the basic idea)
When you buy a future contract, you dont buy the asset. Only the agreement that you will buy/sell the asset at the contract price. CBOE futures contract end today, but there is already a new one open.
The price of the future contract is different from the price of the asset (higher or lower) because it is not the asset. It is and price established on by the exchange following specific rules.
Every day, there is an adjustment on the contract price, that puts it closer to the asset price. At the expiration date, the price is the same of the asset, and the contract is settled. A new contract is created, and the cicle restart.
No BTC ever exchanges hands.
The movements on the price is related to the price of the asset, because people trade these contracts based on what price they expect it to be on the future. It is not exactly the same, but they are alike.
Before the expiration date, anyone is free to buy or sell the contract, usually with leverage (less money to buy more contracts, but higher risk) provided by the exchange, wich make it a lot easier to trade on higher volumes. And they can buy a short position, betting on the price falling.
But no trades that happen on the future contract exchange only have effect on the price of THE FUTURE CONTRACT. There is no effect on the price of the asset. NO ASSET CHANGE HANDS.
But here comes the catch...
In a small market with no regulations (in money volume) like cryptos, it is pretty possible for someone with enough cash and intelligence to manipulate the asset market, and have its reflection on the Futures Market.
THERE IS NO DIRECT EFFECT. Only a possibility of market manipulation.
A very large possiblity I would say. If the futures are a leveraged bet, someone heavily short the futures and holding large amounts of BTC would have a large incentive to sell the btc hard to win on the contract and then buy back the BTC lower. With large selling comes stop runs and panic selling so thier selling facilitates much greater selling at certain price points. With computers and algorithyms available to only rich investors, this becomes a pretty doable arbitrage.
Key for small players is, hold your bitcoin through contract expiration dates.
I was thinking this exact thing and made this post right before I read yours:
https://steemit.com/bitcoin/@lordprime/will-the-cboe-s-bitcoin-futures-always-rise-into-the-close-on-expiration-day
I ahve read what they are, but this explanation does not explain why ive observed that several times in January that CBOE have had 3000+ contracts listed as active, and over 1000 CME futures contracts, then later say 1 week after, both was listed at 0-200 contracts. For that same mounth of January.
IF your explanation @phgnomo and what is informed about in the futures websites was 100% true, then that whouldnt happen,. Unles there is a vital detail Im missing.
Could you point me to the website with this information?
cboe futures: http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures
CME futures: http://www.cmegroup.com/trading/equity-index/us-index/bitcoin.html
Note: CME futures had over 1000 contracts for January earlyer, before cboe futures contracts for january ended.
Everything is manipulated. Even the stock market. Even the USD market. What isn't manipulated? Even politics are manipulated. The key is to play within the manipulated games.
Can doesnt mean they are.
The difference here is that is lot harder to manipulate Stocks markets due to the very high volume traded and some regulations that punish manipulation.
On the cryptos have low volume and no regulations, so... A few millions is enough to manipulate price.
I wouldn't doubt that the expiration of futures has something to do with the movement as well, but it seems the January effect that has long been eliminated in traditional markets is still present in the cryptoverse.
I hope @cryptovestor gets his big buy order in because I don't believe prices will reach that level. One of the reasons why I don't use the typical moving averages. Thanks to that I was able to sell out of my positions prior to the drop as I wrote and questioned if this was the beginning of the correction.
I used those same charts to get back in at around the current levels and highly encourage others to do the same if they haven't. It's not possible to catch the perfect bottom unless you're extremely lucky, but I believe this is the bottom area.
Ftures contracts usually expire in mid March and mid June, so this is not the reason. Also investors usually close their futures positions about 2 weeks before expiration, so and of February would be such time.
The BTC is not usual at all!... BTC futures are monthly next influence date is 26-01-2018... Check CME and CBOE .
8k is just a house number, but since everyone agrees on it, mass psychology will accept it as a support level ;) As to alts, that would mean a further 20% down from here, use the next straight number and better buy BEFORE it goes quite that low.
8000 in Bitcoin is a level that guys like Mike Novogratz have been expecting since before Christmas, so it's where we should expect a few of them levelling in.
Pretty much, the way I see it at least.
If you have the faintest idea about technical analysis or even just look at the btc price chart, really, you will have no problem seeing where this "house number" comes from.
Which takes away nothing from the self fulfilling prophecy argument. Technical analysis is basically an exercise in mapping out and anticipating trends in mass psychology. Traders get conditioned to respond to the chart, then the chart responds to the traders -- a self-enforcing feedback loop.
Before Christmas, I tried the Fib and found that 9500 seemed to be the most likely house number because the 0.618 landed there - but once the folks behind hedge funds are openly guessing at 8k in a press release, old Fibonacci will likely for once adapt TA. It would be so disappointing if BTC really bounced at nine, because there's many folks here who found the correction too level so far and were even calling for 6k and lower.
8k might be the final line, so that we could now climb up again and start the new year in earnest.
I knew you would be the excited voice in the paniced crowd!
Hell Yes, this is exciting. I had buy orders in on BTC, ETH, & LTC that got filled while I happen to be watching, the bounce was so hard and fast I sold them all near the top (rare to get this lucky for me), but figured it had to be a bull trap and if not I didn't really need more anyway. I placed more orders below the last lows and woke up to the first being filled (BTC around $9,200) I have more buys below that even below $7k. If it all goes right my lowest orders will not be filled, and that is fine too.
Keep in mind people this whole crash is only in terms of USD pairs, if you don't want USD then it is just a sale to buy on. My portfolio is down 30% in USD (still have some that are going up) but again this is USD valuations (which I could give a shit less about), I have ridden 90% drops, this is nothing! Everytime the masses have screamed "bitcoin is dead" or the newer version "bitcoin bubble has popped" the market has recovered and grown stronger. Fuck wall st! I will not be manipulated out of my crypto, I will hold till zero rather than sell to those fucks!
peace
jax
Ci,
I know there was a gleam in your eye today seeing BTC drop...especially under 10k.
(Heck i used up my reserve fiat to load up my previous positions & actually got more BTC.)
The one thing i do need to get used now...is the panic.
ALOT of people really went apeshit over this & Bitconnect(anyone could have seen that coming)
Makes me wonder...are people really expecting Unicorns & Lambos in this market?
I view it as a new age version of the pink sheets with some of the sham coins in this market.
As many positive things...i see negative ones.
Anyways good to know i wasn't the only guy looking for a solid bargain in this overinflated market.
Hell.. i expected BTC to possibly hit the 7.739k support level.
This in itself will teach folks...dont think your "Fillinblank" coin is a guarantee.
No such thing as a guarantee in any financial vehicle.
Only Death & Taxes.
On that note, excellent video as always.
First, thanks for your amazing controversial videos! Make me feel better in situations like today and seeing every bigger movement as an opertunity to act strong against the market.
One point you are mentioning alot is the bitcoin dominance and that it will bounce back soon.
(I've a mixed portfolio of projects I believe in out of 6 coins in top 10, 6 coins in top 10-100 and 6 coins in top 100-200 market cap -> so altcoin portfolio without alot of trading, more hodling-setup and switching big gains in one coin to other coins out of my portfolio)
I understood your points and was thinking about a possible bounce back of btc too, but didn't change my portfolion early enough (was at 11. of January I guess) and didn't want to change it while mc was "that low". But know the real crash is happen, i've to say, im surprised how good my portfolio works out, only loosing 2 % more then btc today.
Questions:
In your theory and how you presented the btc in your last videos shouldn't the btc be alot stronger than the altcoins?
Don't you think this is a big sign that the btc is compared to the newer coins weaker and will loose more Dominance in the next month without a bounce back to 45 % an higher?
I mean THIS should be the situation where the btc should be ALOT stronger then all the alt's which gain like 3-10x in the last month right?
It's a crazy ride and I'm all in until the wheels fall off! I'm hodling all my coins as well as increasing positions as the market drops, it's a roller coaster people, it will have all these crazy drops and lifts.. i sincerely hope the community keeps there heads. Patience is rewarded in the crypto space. Good luck everyone.
Best of luck to you wolf - always be cautious about being "all in" though!
Holding BTC was one of the few safe places to be today unless you care about $ values. Everything else is plummeting versus BTC so it is a great time to be buying alts unless you believe this drop is going to be followed by a massive BTC rally to the exclusion of alts. That does happen, but seems to happen after a first run up and people have already bought into the alts, then if BTC keeps going it cannibalizes the alts as everyone gets FOMO.
Yes, the futures contracts are expiring today so hopefully this is the end of the dive because I've spent most of my BTC reserves on great alt buys.
I would not buy any BTC. Better off in something like BCC or LTC since transaction costs are low and transfer times are quick.
Then you can cash out after the next "pop" so you can actually pay bills, buy food, etc.
I wouldn't recommend any investment on the basis that you can cash out to pay bills lol.
If you are using money you actually need to buy food or pay bills you should think about investing less money. What if the whole market crashes to 0? You'll starve?
Another BCH angel.
I don't know anyone who ever used Bitcoin in a transaction.
It's so easy to change some into ETH or Dash or whatever and use that - or Monero if you want to keep it a secret. Otherwise - hey, why not use your bloody bank account with th Visa ;)
Hashflare, Ledger, Microsoft. Now you know someone.
And when was that
The two goons below will be taking their cryptos to the grave with them.
I don't think the correction is quite over yet although we might see a bit of sideways action over the next week or so I do think after that we are going to dip and test the $7800-$8300 levels as a true bottom (so your note about buying more at $8300 is a good and relatively safe position IMO). We will likley see BTC go back above 14k by the end of Feb, but again I do expect it to dip below the $8500 before making that trip back up to the 14k+ level.