Like one of the scarier fairground rides, Bitcoin is taking investors on a loop the loop that isn’t for the faint of heart. The price touched a low of $38,560 earlier today, and although a small rally has taken the price back over $40,000, investors will be extremely shaken by the latest bucking bronco dip.
Most investors will be fearfully wondering if that is indeed it now. The danger is if the Bitcoin price does not recover above the previous support at $42,000, thereby turning it into resistance, and the doom of entering the next bear market somewhat earlier than most would have predicted.
Warren Buffet’s quote “It’s going to end badly”, springs to mind. In fact, the nay-sayers are already hovering overhead like so many carrion crows waiting for their victim to give up the game.
Clem Chambers, CEO of global stocks, shares and crypto information, wrote an article yesterday on the Seeking Alpha investment information website. He posits that this is the end of the Bitcoin four-year cycle and that the “next crypto winter will be as long as the last”.
“If we see the low $30,000s soon, it will then be a question of will we see $10,000-$20,000. To me, that’s possible because when the ‘I bought at the top’ brigade stampedes for the exit, it will get extremely spicy.”
An article on Aljazeera explains the importance of the $42,000 level, saying that this is where the Bitcoin price topped out in January. However, according to Justin Purves, CEO of Tallbacken Capital Advisors, if the price can hold this support, then the rally could be on.
In the same article, Diogo Monica, president and founder of the Anchorage Digital Bank, says that his institutional clients are either maintaining or increasing their crypto holdings.
“They are looking at this as (a) good entry point”, he said.
Cryptocurrency investing is at an incredibly scary point right now. The old adage of “buy when there’s blood on streets”, certainly comes into play. This is a time for major decisions and strong moves.
If you are buying now, and it turns out that this really was the bottom, then you will be seen as a wily old fox that timed the market just right. On the other side of the coin, if you continue to hold and Bitcoin sinks, taking the crypto market with it, then you might be holding those bags for an awfully long time.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.