- The BTC/USD continues to be dead money, as we are simply trading in a very tight range.
- On Friday, it was down 4/10 of a percent, but as far as cryptocurrency is concerned, that’s barely moving.
- The $18,000 level in the 50-Day EMA sitting above continues to offer significant resistance, as Bitcoin is looking for some type of catalyst to move.
What I find particularly telling is that the US dollar has been sold off quite drastically over the last several weeks, while Bitcoin has either gone sideways or felt rather sharply. Keep in mind that there are still a lot of frauds out there, as well as Ponzi schemes that involve cryptocurrency. If that’s going to be the case, institutional money will stay away from this market, because quite frankly it cannot be trusted. The real question at this point is whether cryptocurrency is going to survive.
See Rallies as an Opportunity to Sell
I understand that there is a religion around cryptocurrency but at the end of the day, it’s not really used for anything. I cannot think of the last time I even saw a “Bitcoin accepted here” sign in the real world, which makes sense considering that something that can lose 70% of its value in a few months is not money. Even if it were to be money, it would be tantamount to the Argentine peso, which is barely worth the paper it’s printed on. If his volatility is going to be an issue, there’s no way this will ever be used as money on a large scale by businesses.
Bitcoin is no longer thought of as an inflation hedge because it’s been eviscerated in the inflationary environment that we have found ourselves in. I remember reading how it was going to be a hedge against inflation as central banks around the world print unlimited money, but we can see that is clearly been a lie. Bitcoin was supposed to be digital gold, but gold is rising while Bitcoin is doing nothing. That obviously was not true either.
If it’s not money, and it’s not a hedge against inflation, and it’s not even gold, what is it? I think that’s the real question is starting to be asked. At this point, there are a lot of bag holders that are bought at 50,000, and higher. Bitcoin evangelists will say that it’s a sign of strength that a lot of the retail traders that bought all the way up there are still hanging on. Of course, they are - they are afraid to take the massive loss. Being a bag holder is not a sign of conviction, it’s a sign of fear.
Anytime Bitcoin rallies, it should be sold. It’s going to $15,000, and that eventually $12,000. At this point, I would not be surprised $10,000 for that matter. It’s not until we break above 22,500 at the very least that I would take the rally seriously.
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