Bitcoin markets went back and forth during the course of the week, but by the time I am recording this late on Friday, we have formed a shooting star like the candle, and that could send the market lower. It doesn’t really matter to me because I believe that the market is overbought anyway, and a pullback is probably going to be rather necessary. We have given back about 25% of the market, but I think we need to drop even further, and I would love to see this market go towards the $10,000 level. I think that most institutional traders feel the same way, so I would anticipate that there is a lot of interest in going long at lower levels. I suspect that the $10,000 level being broken has made this market a bit of a mania just waiting to happen, but eventually markets to calm down. When I look at this chart, I would be very hesitant to start buying, based upon the fact that I feel like I would be “paying up.” I don’t like doing that, it’s a great way to lose money.
BTC/USD Video 02.01.18
If we were to break down below the $10,000 level, the market should then go to the $8000 region, which is the 61.8% Fibonacci retracement level, which would be very attractive to buyers around the world. If we break down below the $8000 level, then I think the market comes unwound that we go much lower. I believe that the $20,000 level above is the ultimate target, but I just can’t be comfortable buying the market at these lofty levels for an investment. A short-term trade possibly, but to “buy-and-hold”, it would be a bit too much for me to risk. If we were to somehow break above the $20,000 level, the market is likely to go much higher, but I make no bones about it: I believe that eventually, Bitcoin will collapse as it is one of the least efficient cryptocurrencies. We are a long way from that happening though.