Bitcoin is in a repricing range and has sideways traded for an extended period of time leaving Crypto denizens on the edge of their seats waiting for the next leg up.
Here is the chart.
You can tweek those trams lines to your hearts content but they represent the optically obvious range of this sideways path.
In the last few days Bitcoin has swooned and hit and broken through the $60,000 level and today has bounced back. Here is what happened close up.
Last night it hit the magic $60,000 level and having breached it for a short time, bounced off that rail.
This has left people wondering what is going on and the answer is that Mt Gox is heading for a creditor distribution.
MtGox was ‘THE’ Bitcoin exchange and it collapsed when it was the victim of a huge hack. The fact that the management had lost control of its accounting processes didn’t help matters either. To go straight to the point, after years of legal and accounting administration Mt Gox is about to pay out its recoveries to its long suffering creditors starting next month. There is at least 140,000 BTC and as many Bitcoin Cash.
The fear is that the receivers of this Bitcoin will dump it for fiat and crash the price and who would blame them. At $60,000 this cache of Bitcoin is worth $8.5 billion dollars at $40,000, $5.6 billion, at $20,000 $2.8 billion. You get the drift.
Yet by now this information is in the market, so theorists would say, this is now priced in.
There are three ways to play this.
Hodl. Come on you know the drill, forget the noise, keep buying when you can.
Sell if it goes a thousand or two dollars past the recent low.
If the ground opens up and swallows Bitcoin. Buy.
The call remains, have we seen the high of this Bitcoin cycle or is there another final leg, up over $100,000. This to me if the only call for the whole of this era of Crypto. If there is no final leg up, this to me signals the end of the Crypto dream and the absorption of Crypto into the mainstream and future mediocracy of Crypto as an asset. One more leg up and the dream of world changing developments from Crypto as private sector money, remains alive.
Only if this move ends the current 4 year Bitcoin cycle does this matter to long term holders and I still favour another leg up. However that wont come till the MtGox distribution is digested and that will take some time yet.