Topic: Bitcoin - Headed a lot Lower - Back to the Mean (Read 326 times)

Hey good news....
We are at the mean....
Time to start buying again, well, almost time. No need to try and catch a falling knife. But $3500, This is it Chief!

Oh, I am so sorry for your HS math teacher.

If you are talking about calculating the drop from the absolute, all time high price - for ease let's call that $19,500 and current(ish) price, $ 7,000 - then we are talking 64% almost 2/3rds. But, ok, let's go with your 90%- which would actually put the current price at $1,950 - but, think about how long it traded at 19,500. Not too long. So the actual average price last year is much, much lower, like under $3000. So a reversion back to the mean would call for a pull back to sub-$3,000. Your 90% is looking more and more possible - lets hope not, but very possible.

Keep hoping and I am sure you will #HODL to the end, but there is still time, sell on any rally and wait for lower entry point when times are more stable. 

The point you are missing is that bitcoin had already suffered in the past losses up to 90% or so of its value and sooner or later it had always recovered. Of course this is not a guarantee it will happen agsin, but you are allowed to hope.

That's the point I'm trying to deliver around here myself and what I get in reply is that my "understanding of cryptocurrency is very limited". In any market without exception hodlers are canon fodder. As an old Wall Street saying warns, bulls make money, bears make money, pigs get slaughtered. Pigs here are those who are excessively greedy, basically another name for hodlers, who do not close their positions at the right moment, obsessed with and possessed by greed.

The "coin" markets are thin markets with almost no institutional players (few but not many). These are markets dominated by unseasoned, immature, and rash traders - both up and down. These two elements, thin and rash, lead to very volatile price swings. My play right now is to move to EUR (not USD) til BTC hits 3,990 BTC/EUR. Then I would look to buy on the 'blow-off' bottom.

Time will tell.
Sell BTC $7,105 (might get a bear bounce to $8k).
Buy 1.23 EUR/USD.
Then wait until baked on both sides, might take to July/Aug.

BUT whatever you do, don't keep 100% in #HODL. That will kill you, you'll get run over in the middle of the road!

What are you planning on doing? State it, and track it, and make sure you trade your strategy. Don't get Armadillo'd.

Well, I'm a bit more optimistic. By the look and feel of it, there is not much extra supply left in the markets. Honestly, I don't know what you mean by the oversupply of miners - they have always been there as well as the coins they mine - but weak hands, which you refer to, should have already been shaken out by now. Look, when the price had first crashed below $6,000 in early February, it actually felt like a genuine panic sell-off. That was for real. Now it feels quite different as if there is plenty of resilience in the market. So, unless a major bearwhale off-loads massively, the price is not very likely to drop below $5,000 on its own.

Bitcoin, and most alt-coins, are still in a free fall. This will continue to occur until a number of traders/investors are "shaken out" of the market. There is still a gross over supply of miners and losing investors willing to dump at low prices as panic (the inverse of FOMO) kicks into high gear. My guess is that we have at least another $1500-3000 drop. Once BTC hits mid to high 3k and the Alt-coins are halved from here, then we will see a new base develop. And after sometime at that base, then we can see a new bull market. But that will take a year or two from here. Sad but too likely, as I'm long BTC too.

That graph was already seen on bitcoin 4 years ago. It already happened and happened again and it will happen again. It's like a cycle.





year 2013 and 2017 looks the same to me. And I think it will possibly happen again but not this year i guess.

I don't know why people are so negative the op is losing money like most people but the price of bitcoin is still way above the levels of the previous year and of all the years before it, if you are not in profit even with the current prices it has to do with your inability or reluctance to buy bitcoin when it was cheap, anyone that bought at the beginning of the previous year still has tremendous profits and this holds true not only for bitcoin but for almost any other coin in the market so if someone is losing money despite the huge growth then it is the fault of the trader not of the market.

I bolded the part of your post which is quite in line with what I'm saying myself and which I referred to in my previous post. Knowing where and when to back off is the lesson that most traders learn in the first years of their trading careers, typically the hard way. If they fail to imprint it firmly on their mind, their careers are soon to be over.

Other than that,  I can't agree that crypto markets are really brutal because till recently they were in fact quite forgiving. Whatever price you bought your coins at, you could just sit and wait patiently untill going into green. This is not the case with, for example, derivatives markets where just holding assets (e.g. futures or options) means losing money.

Lol i remembered being greedy as hell when BITCOIN reached $15000 in the market and got a bit cocky there to hold it no matter what. Then started investing more and more over time then it was a success run and Bitcoin's value even got up to $19000 but sadly i didn't convert all those cause i was determined it will continuously go that high up but unfortunately it hasn't and i was broke after the huge pump.

Oh if it were only so easy. I'm twisted as the next trader when it comes to short term moves. What I'm better at than most is discipline/money management. I've taken some money off the table, profits at the highs and took some losses during the pull back earlier this year. I didn't sell everything, just some. When prices move, I know when to add or subtract. I can't know much more than that when comes to these madding BTC/Alt markets. My experience proved helpful, not bullet proof. I know the market will go lower and higher, I just don't know when.

Yes bitcoin is very low now thats why many people now expecting on their Price increase. I go hope that there will be surprised soon. That bitcoin is going back again to its normal price. Because bitcoin will survive for the many.

My bet is that your a better trader now than a few years ago when you started. Experience does matter. Its not the only thing, but it's a thing.
And, So what's your call now - what do you see in your patterns. Are you long or out of the market?

It doesn't really matter how much experience someone may have as a traditional trader. It basically goes up for traditional market gurus as well; they for years have been predicting that this 'bubble' would end according to their traditional market knowledge, but it's still thriving. If we look at how brutal this market can be from time to time, then even 'experienced' crypto traders some times just have to accept that they can't beat the market. I have been trading Bitcoin for years now, and one thing that helped me a lot, is the fact that I know when to back off. I tried to trade against the market in all sorts of circumstances, but it's not worthwhile anymore when everything starts to look like a gamble rather than a well thought out trade. That's why I currently focus almost solely on repetitive patterns. It's much easier, more rewarding, and above of all, it results in less headache and stress.

The price might shoot up instantly but the thing here is that no one knows on when that thing would happen.I know the words being spoken by OP which I do believe that most people who did invest on crypto since last year specially on December are really suffering from huge drawdown or negative with their coin holdings which it would really give you pain but doesn't mean this declining market would be over.Its still breathing chances of growing up would be there.

If you've been trading markets for 35 years, and this is a helluva job, how could it happen that you bought into this ****? Typically, people learn their lesson the hard way in their fresh years, and then it either remains with them for the rest of their trading lives or they go to hunt elsewhere. Don't consider this as an offense of any kind because I'm really-really curious. After 35 years you should be kinda invincible to these things. I mean the ones like "it will be different this time".

Give the uniqueness of this market, I agree that you can't know what real market sentiment is, nor where we are in the cycle. This is an odd market, heavy with new money/traders, low number of institutional players, big oversees participation, and a very mixed Government(s) oversight. Wildly unpredictable, immature and volatile. Plus we have gone from $1000 to $20,000 to $7500 in the past six months. I've heard some ex-Fx traders call the BTC market "Set on easy" - Not me, I don't find it set-on-easy at all.

The market activity has been bothering me for a while now. A couple of weeks ago, I switched up my mining operation from "Spec" mining to a hybrid "Cash/Spec" mining. That way I get some money off the table and still holding some coins. I don't have a strong short-term opinion on pricing. I do agree that long term, there are fundamental changes going to happen. But between now and then, the BTC/Alt markets will shake up and spit out a number of traders and investors, the way markets always do.

Any investing isn't all science and isn't all art. AND I don't think anyone, at least right now, can trade the BTC/Alt markets like they do other markets - stock, options, futures, etc. I've followed different theories over the years and adjusted the strategy for my size and my gut feelings, all very profitable, making good money. With BTC/Alt, I haven't figured out what the optimal trading theory is yet (it isn't #HODL for sure), and I am totally on gut feelings when it comes to BTC. And I wish I could figure out some Quant like analysis to this market. There is a solution out there, and the first one to figure it out will be a big winner. Just ask Ed Throp or Ken Griffin about inefficient stock warrant pricing a decade back.

Trade on,

The big question is how to price, hedge and execute a bullet proof strategy on BTC.

Well you got the bounce that you requested. BTC looks destined to at least break 9k again. It's going to be a tough ask for it to break 12k and that's really what to me would signal that the market is still bullish and the rest of the year will go well.

It's worrying when considering what stage we are at if your graph or other similar theories are true. Because they all speak of the bottom being when there is absolutely no confidence in the market whereas right now there are still so many people bullish about a recovery. When bitcoin initially went from 7.5 to 8k last night in telegram chats there were hundreds of people going wild and calling the bottom and that the next bull run to a new ATH had begun. Not saying it hasn't but it didn't seem to fit most theories of market sentiment and investor psychology.

It is very unlikely we are going to return to the mean, we can all recognize that bitcoin was in the middle of a bubble but the bubble did not began without a reason, the reason the price went up was because of the activation of segwit that in itself should rise the price of bitcoin a few thousand dollars at least so it is very unlikely we are going to see a price a 1000 once again.