Blood In The Streets For Cryptocurrency Markets
Nov 24, 2018
A couple weeks ago, I wrote about the “Manic-Depressive Mr Crypto and His Consolidation Act” and how the right time to buy is when “blood is running in the streets”.
Fast forward to today and there has been what’s being called a Crypto Crash. Prices meandered sideways for a few months until this “crash”, which started a few days ago.
It seems Mr Crypto market is still looking for a bottom as we speak. I thought the bottom might have been in already when I wrote the previous message but clearly, it was not.
But this current significant downward move in the price is the very definition of “blood in the streets”. I also think its a great time to BUY, which is what I was saying before this latest downward move.
Don’t look for the exact bottom. No one knows what that will be. Just keep buying during this time of crypto blood-letting.
I personally could care less where the bottom is because I know that we are already in dark depression times for crypto, as seen by all the news out there. Most people are basing their reactions off the price they bought in at, which was at all time highs.
Remember that the blow off top of December 2017 was already well underway and fooled the most people into thinking it would never stop rising between the months of Oct – Dec 2017.
We are now seeing, or starting to see, its equal and opposite reaction.
That’s the Market’s greatest trick! The music always stops! Your job as an investor/speculator is to try to find the time that is most likely to make you money.
This does not mean that you have to trade or time the markets. Professionals trade, and timing is impossible. All average people need to use is some ‘not-so-common’ common sense and use market extremes to their advantage.
It always takes time for market extremes to develop, but it also takes a lot of patience to profit from them, and this is what makes it difficult for most people.
When blood is in the streets, as it currently is, people see no end to the bloodbath and think it will continue forever. We are starting to see the beginning of this attitude.
Take this article for instance: https://www.businessinsider.com/williams-bitcoin-meltdown-10-2013-12. It was written on Dec 17, 2013, right after the all time top price for Bitcoin was in at around $1,155.
The crash had already begun. At the time that article was written, Bitcoin was at $610, a 47% move down, at that time. It ended up falling another 37% after the article was published.
The author, clearly a Bitcoin skeptic, goes on to state his reasons for predicting that Bitcoin will reach $10 and below by mid-2014. He was right about the general direction, which was already obvious, but wrong about its future bottom price which was not so obvious.
Bitcoin never reached $10. Not then, or ever again! To this day, the last time Bitcoin had been even close to $10 was in late 2012.
We now know from hindsight that Bitcoin’s bottom was in at around $180 which occurred in January 2015, not mid-2014.
This means that the total fall from its December 2013 top, around $1,155, to its January 2015 bottom at around $180 was 84%. It never reached the authors 99% loss prediction!
That aforementioned article is a pretty interesting read for historical Bitcoin thinking at the time. I think the author made a pretty good guess as to the extent of the downward movement, being 6 months too soon, but he was way off on price, which bottomed at 18 times higher than his sub-$10 prediction.
Today, if Bitcoin was to fall the same amount as it did from Dec 2013 – Jan 2015, which was 84%, from its current all time high price of around $19,900, reached in December 2017, then that would mean Bitcoin could still fall down to around $3100.
Though no one should be surprised, based on historical evidence in price movements, if Bitcoin falls below $3,000, it seems that many people are jumping off cliffs simply because Bitcoin fell below $5,000.
This is a typical “blood in the streets” scenario. I personally think Bitcoin could fall down to between $3,100 and $2,700 and still be acting normal.
Here’s the trick though: It’s hard to make money when everyone else is losing it. That’s why so few ever do it. But in order to make the real money, you have to be able to buy in times like these and worse!
You must be mentally prepared for Bitcoin to fall below $3000 and keep your head. When there’s blood, its easy to think that prices will fall to $10 and below, like the author in the article above did, and that prices will never recover.
Remember that the author was wrong! Prices did not go nearly as low as he thought and they also recovered to the point of hitting just a hair shy of $20,000 four years later.
That’s a gain of over 17 times the previous all time high of $1,155. How’s that for a comeback!? If that’s not manic-depression, I don’t know what is!
Markets ALWAYS move the other direction at some point. They never stay in one direction forever. They go up and then they go down. Then they go up again, and then down again.
Since Mr. Crypto has been depressed and going down for awhile, with some time to go down still, then you can only guess where its must go as soon as he’s ready.
Its not a trick question, it will be UP!
Remember, Mr. Crypto is a manic-depressive and he will switch to happy mode once again at some point. This is for sure!
The only real question becomes:
When did you BUY?
Did you BUY when there was blood in the streets, when everyone felt like they were going broke?
Or did you buy at all time high prices, when everyone felt like they were going to be rich and could suddenly afford lamborghinis?
History proves over and over again, in every market on Earth, that buying when everyone feels like they are growing broke is always the best time to BUY, assuming that market has a future, of course, and Crypto surely does!
Buying is not enough though. You must also SELL when everyone feels like they are guaranteed to get rich – and that time is definitely not right now, when everyone feels broke!
If you haven’t bought any Bitcoin yet, I think now is the time to start.
I use Binance.US at https://mikejanthony.com/binance
…and Coinbase at https://mikejanthony.com/coinbase
Cheers,
Mike J Anthony
P.S. I mentioned the price, if we had a similar 2013-15 like loss of around 84%, would be around $3,100. But I did not mention that if we had a similar 2015-17 like gain of over 17 times the previous high, the price of Bitcoin will crest $338,000. If that does indeed happen, and it could, wouldn’t you like to have bought now? Just some food for thought.
