Bitcoin Breakdown... Look out below! Where to from here?


There is a lot of fear out there amongst Bitcoin (and other crypto) investors/traders. BTC broke below $30,000 for the first time since January is now down over 50% from the highs reached in April. As mentioned in earlier posts, we are well and truly in a correction (https://thrivingwithinterest.blogspot.com/2021/05/testing-patience-crypto-correction-is.html). 

What have been the reasons for the most recent downturn?

  • China cracking down on miners over the weekend. It's nice to be a centralized government where you can quickly make such decisions;
  • Investors with leveraged positions are being stopped out (close to $1bil in liquidations have taken place recently);
  • Dramatic slowdown in onchain activity; and
  • From a conspiracy theory perspective, some might point to the fact that Microstrategy keeps on doubling down on BTC (they just issued another convertible bond) and traders are trying to cause additional stress.

Where to from here? 

My best guess is that we have another few months of this (at a minimum) and possibly up to 10 more months before we can resume an uptrend (https://thrivingwithinterest.blogspot.com/2021/06/another-50-bitcoin-price-correction.html). So hang on tight from here. Accumulate a bit more on dips, as you will be rewarded in the long run, just don't make plans to make a major purchase with your Bitcoin in the short term. We could easily retest the $23,000 level or so, which is where the currency (briefly) settled in December before it's major beginning of the year pop.

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