- The BTC/USD has fallen ever so slightly during the trading session on Wednesday, as it continues to look for some type of catalyst to get moving.
- The $16,000 level now looks to be the next major support level, which I do think it’s broken given enough time.
- Honestly, at one point Bitcoin could be a great buying opportunity, but it’s not anytime soon.
Breaking down below the $16,000 level then opens the $15,000 psychological area, but the real support will probably be found closer to the $12,000 level underneath there. The $12,000 level is where the market took off from previously, so it does make a lot of sense that we would see market participants pay close attention to it. I think there’s a lot of “market memory” in that area, and I would anticipate that there would be a lot of accumulation.
However, we have yet to see a real use case scenario for Bitcoin. Yes, you can make cross-border transactions, but at the end of the day most people don’t do that very often. Making transactions and Bitcoin is considerably harder than banking assets, although there are applications out there looking to work through that. Ironically, and then acts just like a bank account. In other words, it’s still a solution looking for a problem.
Keep an Open Mind
I understand that Bitcoin cures all. I’ve been told this more than once. However, let’s look at the past. Bitcoin was going to be digital gold. Bitcoin was going to be a store of value. Bitcoin was going to fight inflation and protect your wealth. Bitcoin was going to be money. Bitcoin was going to allow anonymity. Do you see the pattern here? Max Kaiser is the patron saint of Bitcoin. That probably says everything.
There will come a time when we start to blow bubbles again, and Bitcoin will almost certainly be one. We need the Federal Reserve to start loosening monetary policy for Bitcoin to have the slightest chance. When that happens, I will be buying some Bitcoin and probably selling it right about the time we start to see all the Instagram influencers start shilling it again. I suspect we are a few years from that point again, so keep that in mind. However, it’s also possible that we see something happen between now and then. You must keep an open mind.
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