Cryptogame - The Halving Paradox
Hi everyone,
I hope you are all fine and doing well.
Bitcoin's next halving date is expected to be in around a month's time. Naturally, everyone is expecting the price to go up, and there are a lot of "famous Bitcoin celebrities" saying that Bitcoin will go to 15k, 20k, or even 100k within a few months to years.
Let's look at Bitcoin's history and the history of other "famous" coins with recent pre- and post halving reactions and price actions.
Price rose after the first halving, but took a slight dip after the second halving. The third halving is now. BUT, we are now in a recession, and this is a very big one as well.
Now, let's take a look at other famous coins which undergo similar halving events. Most importantly, Litecoin in August 2019. Notice that the halving only lead to a rise AFTER Litecoin had already fallen post Facebook's Libra fiasco, i.e. Elliot Wave B, which is clearly seen here.
Litecoin:
Now most recently, we have BCH and BSV....
Bitcoin Cash:
Bitcoin Satoshi Vision:
One rule applied in all cases here. BUY THE RUMOUR, SELL THE NEWS!
Historically this rule has worked every time! From December 2017 CBOE and CME Bitcoin Futures listing, to Facebook's Libra announcement date in June 2019, and now the "halving event". However, there is catch here. COVID-19 induced economic crisis. And this one is a very big one. World's governments know this very well and are spending their so-called trillions of dollars, euros, pounds or whatever currencies that they can print to buy the loans which will never be paid back and create a false sense of security and hope. There will be issues with liquidity, and BITCOIN is NOT SAFE when there are liquidity problems. Check 12-13 March 2020 charts for reference.
Ask yourself this question, on the background of job losses, business closures, a lingering deadly viral infection, would you spend money on things that you do not need at this time? Would you go on a vacation to a country where you do not know the healthcare system, taking the risk that you or a loved one may possibly become unwell and get hospitalised, and in the worst case scenario may have to use a ventilator (one of the possible extreme outcomes). Would you buy a new car right now? Would you go to the cinema with your kids to watch a family movie?
Think again.
Bitcoin is no store of value at this time. Especially when you find after waking up in the morning that you have lost $2500 per Bitcoin as a surprise.
Stay safe... and make a decision you can stand by! Do not be fooled by rallies you are looking at right now based on the so-called economic stimulus. For reference, watch movies like Margin Call and The Big Short based on the housing crisis era of 2008. The same economic stimulus happened in 2007-2008, and everything continued to decline for a further 12-24 months. This one is way bigger than the 2008 crisis. Consumer spending will be less.
Bitcoin requires $18 million a day just to stay at the same price level. There is a limit to what can be pumped in a bullish economy... and right now, the economy is not bullish to say the least.
I hope you are all fine and doing well.
Bitcoin's next halving date is expected to be in around a month's time. Naturally, everyone is expecting the price to go up, and there are a lot of "famous Bitcoin celebrities" saying that Bitcoin will go to 15k, 20k, or even 100k within a few months to years.
Let's look at Bitcoin's history and the history of other "famous" coins with recent pre- and post halving reactions and price actions.
Price rose after the first halving, but took a slight dip after the second halving. The third halving is now. BUT, we are now in a recession, and this is a very big one as well.
Now, let's take a look at other famous coins which undergo similar halving events. Most importantly, Litecoin in August 2019. Notice that the halving only lead to a rise AFTER Litecoin had already fallen post Facebook's Libra fiasco, i.e. Elliot Wave B, which is clearly seen here.
Litecoin:
Now most recently, we have BCH and BSV....
Bitcoin Cash:
Bitcoin Satoshi Vision:
One rule applied in all cases here. BUY THE RUMOUR, SELL THE NEWS!
Historically this rule has worked every time! From December 2017 CBOE and CME Bitcoin Futures listing, to Facebook's Libra announcement date in June 2019, and now the "halving event". However, there is catch here. COVID-19 induced economic crisis. And this one is a very big one. World's governments know this very well and are spending their so-called trillions of dollars, euros, pounds or whatever currencies that they can print to buy the loans which will never be paid back and create a false sense of security and hope. There will be issues with liquidity, and BITCOIN is NOT SAFE when there are liquidity problems. Check 12-13 March 2020 charts for reference.
Ask yourself this question, on the background of job losses, business closures, a lingering deadly viral infection, would you spend money on things that you do not need at this time? Would you go on a vacation to a country where you do not know the healthcare system, taking the risk that you or a loved one may possibly become unwell and get hospitalised, and in the worst case scenario may have to use a ventilator (one of the possible extreme outcomes). Would you buy a new car right now? Would you go to the cinema with your kids to watch a family movie?
Think again.
Bitcoin is no store of value at this time. Especially when you find after waking up in the morning that you have lost $2500 per Bitcoin as a surprise.
Stay safe... and make a decision you can stand by! Do not be fooled by rallies you are looking at right now based on the so-called economic stimulus. For reference, watch movies like Margin Call and The Big Short based on the housing crisis era of 2008. The same economic stimulus happened in 2007-2008, and everything continued to decline for a further 12-24 months. This one is way bigger than the 2008 crisis. Consumer spending will be less.
Bitcoin requires $18 million a day just to stay at the same price level. There is a limit to what can be pumped in a bullish economy... and right now, the economy is not bullish to say the least.
Note
For the $18 million/day reference, please read this article:cointelegraph.com/news/2-months-ago-andreas-antonopoulos-explained-why-bitcoin-would-crash
Note
Just an update from yesterday's drama...Purple candle chart pattern is from DJI Futures, 1 min chart, compared with BTCUSDT 1-min chart.
I do not need to point out the blatant, reckless and clearly open market manipulation here when it comes to bitcoin's price movements induced by USDT. Binance is the exchange of course where the highest Bitcoin trading by volume takes place, and other exchanges have to keep up with the price action, hence their volume is useless to compare.
You can clearly see that BTC went up from 6800 range to 7100-7180 range within 6-10 hours on a very low volume, most of which was powered/paid for by taking out the shorts. Then massive sell action afterwards, taking to a new low in the 6500 range in a very short space of time.
WHY?
Everyone knows that banks and major financial institutions will be releasing their 1st quarter financial data this week. They will show major losses or at least very little growth. This will lead to investors selling off their stocks.
Exchanges knew this. And they played the traders as usual yesterday...
US government is now looking for buyers to buy their $3 trillion debt.... good luck with that!
ft.com/content/cf4b0175-bae4-416e-844a-927d56f78495
Two days ago, Ross Ulbricht, founder of Silk Road, published this... he expects Bitcoin to touch the USD 1k-2k zone. I agree with him on this.
medium.com/@RossUlbricht/bitcoin-by-ross-9-a-strong-signal-for-lower-prices-87d2cdcdba95
I am now copying the statements of Andreas Antonopoulus' statement from 2-3 months ago:
“What most people don’t realize I think is that, in the beginning at least, crypto will crash hard. And the reason it will crash hard is because a lot of the venture capital, corporate investments and private investment from individuals that is based on cheap money and disposable income and excess cash in portfolios etc., like in any other part of the economy, will dry up.
When people get scared, when there is a recession like that, they pull back their investments, and they’re going to pull back from crypto too.
From that perspective, I think the first order effect that happens if we have a recession is crypto crashes because all the liquidity dries up which is a classic effect and symptom of a recession.”
The only question to that we need ask ourselves , where will alt coins be when BTC hits 3k this time, or what if BTC goes lower?
Happy trading!
Note
Previous analysis invalid as downtrend line broken. Also, SPX/DJI futures are going higher for reasons not clear. I am not going to talk about market manipulation anymore, because it is a part of trading and economy. If Feds can print unlimited amount of dollars and no one wants to complain, then everyone loses the right to say anything. :)
Note
Brief illustrated history of BTC as a speculative asset and the effects of events on its price.
Bitcoin is NOT a store of value...
When exchanges can street the price in the direction of profit, longs vs shorts, and they don't even have Bitcoin in their exchange wallets, price does not matter to them. Just where they can make more money.
Note
Comparison with "Libra announcement" in June 2019... Literally a copy-paste scenario.... Tick Tock!
Note
Very likely now that there is nothing else expected in the pipeline.
I have identified 4 EW cycles during the rally from 16th March, which is unusual. I could be wrong, but it looks okay to me. I expect three cycles down now. Target is between 5-6k. should happen before mid-June/early July 2020. After that, perhaps another rally for ETH, but not so much for other alts.
Speaking of ETH, the staking/POS will probably convert it into a security by definition. There is no mention of any clearance from the SEC yet, and I don't even think the moonboys will focus on that for now. This is something to be mindful of.
As always, in the cryptoworld, buy the rumour sell the news.
Note
Dangerous to go long here.
Especially in light of Russia outlawing cryptos.
A big sell off in the making, time to close those long positions in the 9k range.
Trade closed manually
Through a series of bad moves, and a lot of mistakes on my part, I have lost everything today. This did not happen overnight, but was a series which commenced since March 12, 2020. I am not going to say how much sad, angry and emotional I am. I lost my life savings to this. But this is all my fault.
I have one life. Whatever money I was trying to make was for my family. I am not the kind of person who would run after Lamborghini's or a high profile life.. I was trying to make may way to secure my children's future. Guess I was wrong about this.
I am therefore quitting crypto-trading permanently today.
I wish everyone all the best. If I ever said anything to hurt anyone in anyway, then kindly please forgive me. Losing money is okay, but I hope I have not hurt anyone's feelings as it is far too difficult to recover from that kind of damage.
Sincerely yours,
doctorkesh
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