[0237] Crypto Market Goes Green, Everyone Goes Crazy
If you read around the interwebs at the moment, everyone is talking about the 'green day' the crypto market is having. Coins like Tron are up 26% over 24 hours and Bitcoin is up a healthy 10%+. However, you have to remember that every coin is down 80%, so if something is up by 10% of the remaining 20% of its value, that ain't much of a rise against it's all time high.
The headlines read, "Are we in altcoin season or is this a bear trap?" One day of green and everyone goes crazy. If I were posting videos on YouTube, I'd be talking about the desperation over scant returns. That's the real news.
While a 26% spike in Tron and healthy gains in other altcoins is a good return if you're swing trading, you have to seriously look at the macro trend of the whole crypto market. The macro trend is down.
The fever over one day of gains tells you that the ( retail ) crypto market has entered the "desperation phase". Retail investors are desperate to see any return and one day of green is seen as a bull run. Everyone is desperate for those days in early January of compounding gains and free money just by clicking a mouse button.
Not to be a Debby Downer, but you can expect another 5 or 6 weeks of falling prices. How do I predict this?
- Christmas and the holiday season are approaching. Which is an expensive time of year as people buy presents or go on holidays or both.
- Many retail investors are in financial debt and invest in crypto to buy their way out of a hole. So forced sell offs are likely even though prices are down to regain some liquidity.
- The SEC has started to fine ICO's who avoided legal requirements. So those ICO's are forced to sell off Ethereum.
- Silly ICO's held their Ethereum instead of cashing out into dollars. So they have to sell off to pay wages, bills and rent.
- Despite the increase in trading volume in the OTC ( over the counter space ), this does not affect the price of the falling retail markets. As a result, retail investors are capitulating at the false price signal. Much to the delight of institutional investors. I wrote about the bullish undercurrent a few posts ago.
There are other market forces at play at the moment, but these are the main ones. The overall effect is a downward pressure on the crypto markets. There just ins't enough buyers to prop up the markets, so while today is a green day, we will see weeks of collapse. Which is why I am playing the patience card despite the chance to swing trade.
Christmas & the holidays will remove more money from a market that is already starving for liquidity to uphold the price. So, you can expect the market to tumble-crash and perhaps bring about that $3k Bitcoin that has been predicted as the absolute bottom.
The green day we are having today is nothing compared to the overall downtrend. And while you can profit from it, the risk of trading at the moment is alarmingly high which makes it not worthwhile.
Better to save up your worthless paper dollars and throw them into the market in early January, depending on how this all plays out. But I imagine that Bitcoin will be a gift under a lot of Christmas trees this years at the low, low price of $3k.
Thanks for watching,
Brendan Rohan - Indie developer of 'next gen' natural medicine from Melbourne, Australia
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