Bitcoin’s Price Drop Not A Buying Opportunity

The negative reaction usually indicates that the people who are buying bitcoin are full up. By that, I mean that they no longer have more money to commit to buying. The lack of new buyers to keep pushing the currency higher leaves it vulnerable to a pullback.

If this is right, what you’re going to see over the next weeks and months is a continuing decline in the bitcoin price.

Running Out of Buyers

Now, that’s a different way of analyzing bitcoin. Most analysis that I read are about the system of how bitcoin should be produced, maintain, etc.

For me, when I look at any investment, the only thing that truly matters to me are two things:

First, I look to see if the price of an investment is going up.

Second, I look to see if the upward price trend is going to continue.

This is the essence of my GoingUpness system that I use to determine if I should buy anything.

And when I look at bitcoin today, it’s no longer going up. And worse, the pattern of price collapse following what is good news is indication that there aren’t enough people left who want to pay higher prices for bitcoin to keep it going up.

Bottom line: Bitcoin fails my GoingUpness system test. I think you should avoid it right now.

Now, even though I expect bitcoin price to fall, I believe bitcoin acceptance and liquidity will increase.

In time, when it’s more widely accepted, more liquid and less volatile, I believe it’ll go up and make new highs again.

1 2
View single page >> |
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.