Iys a drag when you read in the mainstream press that a financial instrument has gone up a long way. This is normally the end of that run. The mainstream media has its faults but it is normally accidently flawless in calling the bottom and top of markets by reporting the move.
Want to pick the bottom of the credit crunch, simply wait for the reportage. This observation has made me a lot of money on a number of occasions.
So it is sad to see the mainstream picking up on Bitcoin’s bounce. However I don’t think this is the end. I hope it isn’t too. As anyone who has followed my Bitcoin prediction will note in additions to being on the money, I’ve been stating I’ve been acquiring constantly below $5000 with much under $4000. As such I have coin and it is ‘talking my book’ to see further significant gains.
I remain positive we will see over $10,000 but this prediction s not enough for me, I want to have a grasp of the top of the next cycle.
To say BTC is going to $10,000 is a bit like the statement that 50% of people that fall from over 20ft die. It is not a particularly useful number for those concerned about falling 32ft, because it is certainly the case that 99% of people die from a fall over 500ft and the key numbers are obscured by the range of outcomes rolled up into an average by such a simple statement.
Is BTC going over $10,000 and onto $100,000 or only $11,000
For most financial instruments there simply isn’t the range of travel to be considered but in Crypto there is seemingly no obvious upper bound.
In my last article I postulated on some potential ceilings, but its anyone’s guess which one might be valid if any so its left to us to look at the price action to have a guess.
In the short/medium term this is my guess.
Then where?
There no real hope to guess without know where we will be when these levels are hit. All sorts of outcomes could drive the price. There is a way however to navigate.
When new information enters the market a financial instruments price will retarget. At the new level it will trade around that equilibrium and will only reprice significantly if new information enters the markets. These equilibrium points are the weight points of the infolding price action.
The classic method to ride bubbles is to hold on through these equilibrium points, selling if the break down and if you are full on mad, buying on upward breakouts or more sane simply holding for the next equilibrium point to set in.
Lets look at 2017 BTC as an example
The boxes set an upper and lower boundary for acceptable levels of volatility. They scale with the price and with what you feel is the sort of volatility you should expect or be comfortable with.
This is the discipline I will be using for this Bitcoin Bull. There is however one added wrinkle. If the price goes vertical and move in vast jumps, I’ll be thinking of selling. A market climax is a glory but is always the time to leave. When you feel a genius and the price is leaping ahead at a dizzying pace that is the time to get ready to hit the exit. As soon as the price then starts crashing and zooming after its vertical, if it breaks the range of acceptable volatility, I’ll be out. This vertical stage was $12000 in the last event and its extremely hard to judge and you will likely and almost by necessity miss the top.
But let me leave you with these happy thoughts:
Wouldn’t that be lovely.