Hate to Hit You With Some Crypto Market Reality - The Odds Favor A Move Lower
Reading charts, finding patterns and using prior price points is how I recognize good entries and possible targets on the upside and downside.
A Price Action Pattern Found
I expected a pullback after the whole market went parabolic in mid-December. The question was how much? The sell off a week ago was aggressive and saw 35-40% declines before a short lived rally.
The question was - is that it?
I was skeptical it was and I will show you why...
Look at this chart - I purposely left out what coin it was (though you can likely deduce). What it shows is the last time we got an aggressive up move, small pullback and then a parabolic move to the upside.
I'm talking about the move in June to July on this chart.
See Anything Familiar?
That move looks very similar to the price action of many cryptos over the past month. That is exactly what has me thinking we have a higher probability of legging down and this first sell off feeling like child's play.
The Result & Forecast
Looking at the result of the move in the chart. You see after the parabolic move we pulled back and had a bounce right at the end of June.
At which point we sold off again and gave back more than 75% of that up move that began in June.
This crypto eventually rebounded and then pushed higher, but there was some pain for anyone who bought towards the end of that move. Pain they likely could not endure and led them to sell for substantial losses.
Glancing at other Cryptos
There are many coins that look just like this chart right now. Bitcoin and Litecoin in particular.
Will they sell off that low - no one knows. All we can do is be prepared.
Are you prepared for the possibility of Bitcoin going sub 10K? How about Litecoin sub $200?
Be Prepared
You want to play out all these scenarios in your head now and make decisions on what you will do if they occur. Because from experience I can tell you, when stuff is happening in real time your emotions will flood in and your decisions will be clouded.
Let's Hope We Don't Get Too Those Prices - Come on Rally!
Learn to Invest Like The Cat
Best Regards,
Disclaimer: All content in this post is my opinion and for educational purposes.
I play this "game" with the understanding that we are in a new industry, and those tend to be driven more by rumors and feelings than actual facts... and so I wake up every day with the understanding that the bottom could totally drop out of everything for no particular reason... at any moment.
Don't play with the rent and grocery money!
Did you buy into XRP?
The C Wave of an Elliot Wave Correction is very possible here. If you look at all of the recent BTC corrections many of them exhibited a bull trap followed by a larger move lower. I think that is the most likely scenario, but anything can, and often does, happen.
Yes, I feel like that scenario is a higher probability at this time.
Good write up and realistic. I see in 2018 some of the coins will just dump. Then the project may fail and this will lead to a lower bear market, but at least it will lead to consolidation which will be healthy in the long run.
That is very possible @scaredycatguide but personally I think there is great upside as well as the potential short term downward swing. If there is growth within the steemit community, which I feel is an inevitability, that will offset in reality what is perceived short term dips. I am not a polyanna investor when it comes to cryptos in the short term there will be great volatility. But for those who really like the story (fundamentals) of the crypto phenomenon the dips or even crashes are great opportunities to load up on the conviction. The bigger the institutional investment block the more they hate this because it is in opposition to controlling the will of capital. Capitulation is going to happen here for sure, but I think this platform is not at all a house of cards but will volatility throughout. Thanks for the post intriguing thoughts.
Say it's not so Joe... Ahaaa.......... Good reporting @scaredycatguide
Hoping we don't go down there but if we do I have been building some funds to Buy Buy Buy!
Having a plan ahead of time is so important. I've been there in the heat of the moment, musing over what to do as things unfold in real time.
It's unfortunate news for the new year but reality is reality. Thanks for the insight @scaredycatguide.
I'm hoping we just rally before then as I don't even want to sit through that pain. If BTC were to crack 10k I am buying though.
I'm buying a little of the pullback now. Really dipping tow in the water stuff. Trying not to get worried and flustered and only partially succeeding at that!
I actually sprang out of bed this morning when I saw BTC was around $12,300ish to buy some more. I honestly have no issue at all with this much needed market correction, I feel like it actually develops trust in crypto in the long term (builds support as they say).
I'm happy for it all to dip if that's what it takes for the market to grow.
The only thing I'm unsure about is how Ripple will effect everything... I'd expect the big coins to bounce back in the new year, but could Ripple upset the apple cart? No idea.
Ripple is a wild card, which is why I own some of that too :-) Though I should probably have more, but I'm not chasing it up here and ruining my low average price.
I'm so glad you're earning some decent amounts on your posts.... this is great. I've always enjoyed your posts.
I'm not in Ripple at all... but yesterday I grabbed some Dash and Strat just in case the rumours are true and Ripple, Dash & Stratis get added to Coinbase on the 8th of Jan.
Investing on steem can do something wealthy mate?? I am having trouble to take decision...
Break down every decision to a Risk-Reward ratio. What is one willing to risk and be OK with and what is the potential upside. Then decide if it is worth it. Everyone has different goals and different risk tolerance.
I'm going to hold my litecoin long term
hello @scaredycatguide . i've just joined, a cat lover from BCN. Don't want to do marketing (well...a little) but if you've like to read my introduction you will certainly find interesting.
Yours articles are.
Nice to meet you.