Without a doubt, we are witnessing history. What Bitcoin has achieved and done is something that the financial markets have never seen before. There's very limited amount of BTC, and it is decentralized!
We're currently going through a phase where the market is trying to determine the value of Bitcoin. The technology behind Bitcoin, blockchain is revolutionary and has so many real-world applications in virtually every sector.
We need to understand that fundamentally nothing has changed, and what is purely driving the price of bitcoin can be seen as the “tulip mania” phase.
The amount of Bitcoin searches on Google has multiplied by 10x since July of 2017!
One can say Bitcoin is a bubble just waiting to burst, and is compared to the dot COM crash of the early 2000's
At the height of the dot COM bubble, the NASDAQ stock index had a price-to-earnings ratio of 175. While Bitcoin has a P/E ratio of 708.
That means based on valuation, bitcoins are four times more expensive than dot-com stocks were at the height of their bubble.
(The P/E is found by dividing the total transaction fees by the current market price!)
With mass adoption in play, you can expect the prices to be more volatile than ever before. NASDAQ just recently announced they will launching futures for Bitcoin.
With the CME group, the largest US futures exchange announcing they will likely offer futures contracts by EOY and TradeStation plans to make these contracts available to its clients ASAP.
With CME & NASDAQ creating futures contracts for Bitcoin, it is considered to be a major step in making bitcoin a legitimate asset.
Bitcoin will have 30-40% corrections and it is deemed the norm during the current state it is in (Bullish). What could possibly happen if Bitcoin has a correction and actually goes bearish? 60%? 70%? Who knows!
There are MANY reputable investors predicting prices such as 25,000 50,000 and even 100,000!
Bitcoin is currently still extremely bullish, and we're keeping a very close watch on the movements of the price to see if a reversal of the bullish trend occurs.
For Bitcoin to go any higher, it needs to consolidate.
Majority of the new traders that are trading cryptos, have never experienced a bearish market yet so most only know buy buy buy!
Everyone's a genius in a bull market.
I believe one of the problems most entry-level traders will have is they will be biased on the movement on the price due to their own position. Don't forget, you can make money both ways.
Don't be ignorant. Trading opportunities happen every day! Don't be in such a rush to have a position open that you don't have planned out well.
Create and stick to your trading plan, don't let your emotions get the best of you! Diversify your holdings, and be prepared for the worst. Always.
Now with all of this in mind... take a look at the market emotion cycle!
Where could Bitcoin possibly be at this point?
Is this the start of the excitement, or is this the beginning or end of the euphoria?
Its one thing to be able to predict where the market goes... trust me when I say this, many do!
But the real challenge when it comes to trading is being able to use that knowledge to your advantage and profit from it.
There will always be winners and losers. It is up to you to determine which side you'll be on!
Let us know what YOU think about Bitcoin!
Sources
https://www.bloomberg.com/gadfly/articles/2017-11-27/bitcoin-crash-may-take-a-while-longer
https://www.investopedia.com/news/tradestation-offer-cme-bitcoin-futures-its-platform/
trends.google.c.../trends/explore?date=2017-...
We're currently going through a phase where the market is trying to determine the value of Bitcoin. The technology behind Bitcoin, blockchain is revolutionary and has so many real-world applications in virtually every sector.
We need to understand that fundamentally nothing has changed, and what is purely driving the price of bitcoin can be seen as the “tulip mania” phase.
The amount of Bitcoin searches on Google has multiplied by 10x since July of 2017!
One can say Bitcoin is a bubble just waiting to burst, and is compared to the dot COM crash of the early 2000's
At the height of the dot COM bubble, the NASDAQ stock index had a price-to-earnings ratio of 175. While Bitcoin has a P/E ratio of 708.
That means based on valuation, bitcoins are four times more expensive than dot-com stocks were at the height of their bubble.
(The P/E is found by dividing the total transaction fees by the current market price!)
With mass adoption in play, you can expect the prices to be more volatile than ever before. NASDAQ just recently announced they will launching futures for Bitcoin.
With the CME group, the largest US futures exchange announcing they will likely offer futures contracts by EOY and TradeStation plans to make these contracts available to its clients ASAP.
With CME & NASDAQ creating futures contracts for Bitcoin, it is considered to be a major step in making bitcoin a legitimate asset.
Bitcoin will have 30-40% corrections and it is deemed the norm during the current state it is in (Bullish). What could possibly happen if Bitcoin has a correction and actually goes bearish? 60%? 70%? Who knows!
There are MANY reputable investors predicting prices such as 25,000 50,000 and even 100,000!
Bitcoin is currently still extremely bullish, and we're keeping a very close watch on the movements of the price to see if a reversal of the bullish trend occurs.
For Bitcoin to go any higher, it needs to consolidate.
Majority of the new traders that are trading cryptos, have never experienced a bearish market yet so most only know buy buy buy!
Everyone's a genius in a bull market.
I believe one of the problems most entry-level traders will have is they will be biased on the movement on the price due to their own position. Don't forget, you can make money both ways.
Don't be ignorant. Trading opportunities happen every day! Don't be in such a rush to have a position open that you don't have planned out well.
Create and stick to your trading plan, don't let your emotions get the best of you! Diversify your holdings, and be prepared for the worst. Always.
Now with all of this in mind... take a look at the market emotion cycle!
Where could Bitcoin possibly be at this point?
Is this the start of the excitement, or is this the beginning or end of the euphoria?
Its one thing to be able to predict where the market goes... trust me when I say this, many do!
But the real challenge when it comes to trading is being able to use that knowledge to your advantage and profit from it.
There will always be winners and losers. It is up to you to determine which side you'll be on!
Let us know what YOU think about Bitcoin!
Sources
https://www.bloomberg.com/gadfly/articles/2017-11-27/bitcoin-crash-may-take-a-while-longer
https://www.investopedia.com/news/tradestation-offer-cme-bitcoin-futures-its-platform/
trends.google.c.../trends/explore?date=2017-...
