When will Bitcoin start moving towards $100k?
Since my last post, Bitcoin has fallen 10%, but the bigger picture shows very little difference in where the price is relative to major levels of support and resistance.
Below is the weekly time frame.
We are now in the fifth month of the price of bitcoin:
- Trade below the weekly 200 simple moving average (200sma), black line in the image above, but
- Find support in $2000 round numbers
What does this mean?
The price is stuck in a consolidation area.
Short-term traders will try to make money by picking off fluctuations in the market.
This can often be a frustrating approach. Winners will be canceled out by losers, so it ends up being a lot of effort for little or no gain.
If money is made, it’s often not worth the screen time and effort involved, but that’s up to the individual. Some genuinely enjoy the struggle, while others hope for instant riches.
Regardless, it’s always worth remembering that staying true to the long-term principles of sound investing is where serious money is made. The difference between, for example, the stock market and the crypto market will be:
- How much you risk per asset
- How long have you held a position?
- How to manage exit
With the crypto market being newer and more volatile, you want to risk less and hold for a shorter period compared to stocks. However, given the added volatility of crypto, the returns do not require taking unnecessary risks.
This is a concept that crypto traders often overlook and why honing your investment skills in a slower market like stocks will make you better off in the long run.
What is my stance on bitcoin?
Just to stand aside for now.
I’m a bigger believer in the phrase, “the longer the consolidation, the bigger the breakout.”
At some point the price of bitcoin will break out, move towards and hit $100,000. When that happens remains in the hands of market forces.
Until then, you can short-term trade the risky fluctuations in the price of bitcoin or stand aside and focus on markets that are already trending. For example, I am long USDJPY since earlier this year, with the price having moved almost 30% since March.
Diversification is an essential skill for consistent returns. In comparison, an unhealthy obsession with a single asset or asset class is detrimental to your performance, something people often have a hard time accepting until it’s too late.
Image taken from Shutterstock
