Looking at the news today, there does not seem to be any specific reason (like discrete actions) to push the price up. It appears to be the continued push that we have seen since last year, although there have been some bounces along the way.
There are some technical predictions that there will be “resistance” to exceeding the $8’200 mark (later this week?), but we have seen this consistently. The price gets to some predetermined point, and a (or some) large trader(s) sell off a large amount and the price drops. Then there is a rebound as other traders want to get in at the (relatively) cheap new price. So – compared to a smooth movement, it will tend to be something of a staircase or an up-and-down motion compared to a smooth curve.
If you are a trader but not so large that your movements have a significant effect on the market, you should be able to predict and make money with these relatively predictable movements – sell off at the top (or safely close to it) and buy again when it falls.
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Apparently the Bitcoin Cash hard fork functioned on 11 November – along with AliExpress’s “singles day” sale. The respective results were a little different. AliExpress by noon in China had already sold more than they sold the whole day last year. The rush for Bitcoin Cash overran the capabilities of at least one market maker, Exodus, and they still have not sorted out all the problems created.
There are stories of Bitcoin inventories being “temporarily” lost and Bitcoin Cash accellerated to unexpected highs while driving Bitcoin down to the levels of two weeks ago or so. At least that is the story being circulated, but already yesterday, Bitcoin was recovering and today is again at the $7200 level; more or less back to where it was before all this mess started.
There are plusses and minuses to be considered here. In a well-functioning market, there would have been fantastic opportunities for traders to make money on the rises and the falls. In the chaos caused by the Exodus failures to perform, it may be weeks before all the movements are clarified, and some people may have made great trades that were lost in confusion.
The lesson here is pretty clear, I think. When something like this is going on, the best situation is to sit on your Bitcoin (or whatever is in play) and wait for the smoke and dust to clear before doing anything else. That was excellent advice before the August hard fork, and it would have been even better advice this week. The exception to that are the traders who thrive on such movements and take potential problems into account in their functioning.
Price Movements Today
As I mentioned a few weeks ago (and before that also), the market goes up and down, and the non-regulated (by governments, etc.) markets tend to be somewhat more unstable than those that are stopped after a certain loss or gain appears. The BTC price dropped as much a 7%+ during the day today, but as I write this, it is starting to recover (less than 7% as I write but as much as 7.7% as I am finishing).
I am not surprised, the market was rising at a strong rate, and there are generally profit-takers who will kill that when the price reaches a certain (probably pre-decided) sell level.
What I expect now – based on typical responses from earlier – is that the price will find a level for a few days, maybe at 5% or 6% or maybe even 8% loss from yesterday, and then start to increase again.
No cause for panic.
Hard Fork – Soft Fork – No Fork?
The people behind the proposed Segwit2x Hard Fork say they called it off two days ago, but some other folks are saying they are going ahead with it regardless. Hmmmm. Anyway, a smaller fork (hard or soft, I guess) will have even less impact on the BTC price. At this point, I would rack it up as nothing more than a nuisance.
BTC Consistent Gain
If you look at the numbers alone, it seems like BTC is jumping around with some gains and some losses. But if you look at a six-month chart, like the one at the top of this website, the gain seems to be consistent over the past six weeks. If you look at it longer term, it looks like it is pretty consistent since the mid-July low point or since the start of August (when the first hard fork scare was finished).
The rates are
- The last six weeks: roughly 1-3/4 percent per week
- Since August: about 1-1/3 percent per week
I suspect that if you put the numbers into a logarithmic scale, the growth is even more consistent, but I don’t want to get that technical.
Good News and Bad News
For long-term investors, that is good news! We can expect to receive about 1-1/3 percent per week, or about 70% growth per year, compounded annually or even more often. But the interesting part is for the commercial investors who are trying to play the market. There are ups and downs, and that gives them lots of opportunities to make money with puts and calls and all that stuff.
The only nasty part for us common folk is, that we don’t know which of these commercial investors are honest, and which will take the gains AND take your money as well!
I wish I could propose a trader who is trustworthy, but I really don’t know of any of them that I would trust. Maybe the secret is to learn yourself how to do the trading, and build up enough money (= BTC inventory in this case) that you can afford to make mistakes and not be broken by them. Note 1: It is really dangerous to trade on margin – youcan lose much more than you invest. Note 2: Altough I am not a trader, I have experience dealing with commodity traders (cotton, cotton waste, tobacco, corn (maize in Europe), wheat (corn in Europe) and pork bellies), oil traders (crude oil, LPG, natural gas, refined products, heavy fuel oil), and stock traders (big ones and little ones on stocks and bonds and other similar items). The BTC market has one BIG advantage – you “know” that the market will always end up on the positive side, and that makes your mistakes more forgiving in the long run.
I guess what I’m saying is that it is time for us common folk to learn about how to predict movements in the BTC-USD exchange rate (or EUR if you prefer), and go make trading gains for our own accounts. Good luck!
P.S. I am going to look for a course or two that seem promising, and try it out myself. I will let you know if I have any significant success. Please let me know if you know of any good courses. PM or write a comment below.
for Bitcoin Fortune Builder
BTC Not-So-Slow Gain
There was a small “price explosion” in the BTC-USD exchange rates yesterday (Friday, 20 October) and today. I have not seen any particular reason for this; I would write it up to pent-up frustration after a week or so of relative inactivity. At this writing, BTC is sitting at about $6’080 per BTC but who knows whether it will advance or decline or just stay there?
Hard Forks Again
There are two more theoretical hard forks planned for the near future now. One is the Segwit2x that we talked about last week Bitcoin-Fortune-Buider Newsletter-2017-10-08 that is now a little more firmly settled for 18 November.
The other is “Bitcoin Gold” that I honestly thought had disappeared after the August hard fork, but apparently is still around. It is now scheduled for next week (25 October).
To be frank about the whole situation, I am getting bored with these things. I expect very little market movement as a result of either fork. Next week we will see if I am right or not.
for Bitcoin Fortune Builder
BTC Slow Gain
Since our last post (late September) we have been watching the exchange rate USD/BTC. It has been fairly boring, I have to say, but the price has slowly worked its way up from about $3660 to about $4560 as I am writing this. That is about $900 (not quite 25%) in 13 calendar days. Actually, NOT SHABBY! Imagine if the NYSE made a gain like that – Wall Street would be going bananas!
Why is BTC growth so constrained? Well, as I explained in the last post, I think the villian is the Segwit2x Hard Fork Next Version (HFNV). Just extapolating essentially in a straight line, if the HFNV takes place at the 10th of November, that gives us from now until then, which is about 40 calendar days from now. If you extrapolate the 25% in 13 days to 40 days, we are looking at 40/13 times 25%. This works out to almost 75%, based on $3660, so about $2800 increase which would put us at almost $6500 by mid-November. If you use the same logic (which I agree is not logical), we are about $500 short of $10’000 at the end of the year!
My expectations are that
- from now to mid-November The growth rate will be at the same rate as from 25 September to today, about $70 increase per day.
- for 3-5 days after the HFNV, lots of movement, but no net movement
- from 21 November to end of year, significant expansion equal to that after 3 August and averaging about $120/day
Where does that put us?
- from 25 September to 15 November = 76 days at $70/day = from $3660 to $8980
- from 15-20 November – no change, so still say $9000
- from 21 November to 31 December = 40 days at $120/day = 9000 + 4800 = $13’800
Does that sound reasonable? I don’t really think so, so lets arbitrarily take 25% off the days of growth in the two long spans. Then we will have
- 25 September – 15 November = 76 days less 25% = 57 days at $70/day = about $4000 plus the starting point of $3660 = about $7650
- 15-20 November – no change so still $7650
- 21 November – 31 December = 40 days less 25% = 30 days at $120/day = $3600 plus $7650 = $11’250 on 1 Jan 2018.
That is the equivalent of $60 per day for the complete period, and that is about 1.7% per day, based on the price at 25 September. It is a substantial increase over the period, but my feeling is that it is reasonable.
What Do You Think???
This is a post taken from Jameys.casa that was published this morning. I think it is interesting and maybe you will too?
Patience Is A Virtue – Part 2
Bitcoin Needs Patience, It Seems
There is another slow-down coming down the road, it seems. There is supposed to be another hard fork on the BTC system in this coming November. Are you ready?
What we expect to see from this hard fork is roughly equal to what we saw last time (prior to and after 1 August). Lots of uncertainty in the BTC price in the run-up to the fork date, and then relief that “nothing happened” afterwards. The only problem with this is that the wait during the run-up will be knocking holes in the appreciation of the BTC during the entire month of October. Well, that’s a little exaggerated – it will be causing a lot of stagnation in the BTC-USD exchange rate, whereas we had all hoped for at least some some increase.
What’s the “Patience” about? Well, last time, the rate lost about 20% ($500) for the 6 weeks before the potential hard fork and then gained about 125% ($2400) in the following peak run. Patience pays! In this case about 5:1 . Those people who sold out before the hard fork lost a lot of potential profits!
What I’m wondering is if this is going to continue with a proposed hard fork every 2-4 months for the next few years? That could cause more damage than any of us had bargained for, including the miners. Is there a way to stop this nonsense?
Please reply using the comment form below the post. We would like to hear what you think.
Chinese Virtual Currency Ban
Since the big hoo-hah last week, the BTC-USD market has taken the hit and recovered to something around $4000. This is almost a complete recovery to the sell-off after the peak of a little over $4900 on 2 September. It now seems that all forms of trading in BTC along with all other virtual coins soon will be banned in China. The Chinese appear to be attempting to stop all trading they cannot control, even peer-to-peer and OTC exchanges. They also appear to be attempting to stop Chinese trading outside the country, so that should make it a total blockage on virtual currencies within China as well as into and out of the country.
As we expected last week, the crackdown did not have a lasting effect on the BTC-USD market. I suspect that the bulk of the large chinese BTC traders managed to get their control outside the country (if it was not already there) before the authorities could block their activities. The rest of the small dealers in China may have taken it on the chin, but the market does not make any allowance for that and the authorities don’t care.
Hard Fork Next Version
Now, there is another hoo-hah brewing about yet another hard fork that should occur in November. This will be to try to separate Segwit2x from BTC. I see this as a probable repetition of what happened in August. In essence, another attempt by outsiders to get something for nothing. I expect that the market reaction will be about the same. There is a lot of inertia in the market there that will keep the market stable over such attempted disturbances. The longer the BTC market remains active and the amount of BTC in trade continues to grow, the more difficult it will be for someone to disturb the market. There are many holders out there who do not want to rock the boat, and more importantly, endanger their USD profits.
Well, there is a big panic about the Chinese stopping trading in new coin releases that has spilled over into the Bitcoin market. At this point, the BTC-USD market has fallen almost 13% since it hit the all-time high of over $4900 on September 2 – so less than two weeks ago.
I am not surprised about this – the Chinese are looking for ways to make money any way possible, and taking control of the Bitcoin market – assuming they are able to – is one way to do this. The other side of the coin is that the market rose about 150% (based on the starting point of about $1900 in mid-July this year) in roughly six weeks prior to the peak.
I feel certain that there will be some more downward pressure on the exchange rate, but I also think that there will be a strengthening upward force for a number of reasons:
- The Chinese do not control the BTC market. They might be able to so if they coordinated their operations, but I do not think they are capable of that, there are too many independent investors involved.
- The Chinese individuals who are in the BTC market will move their holdings outside China and continue their trading.
- There is a large number of people who who will continue to invest in BTC in spite of what the Chinese want us to do.
- The pressure that the Chinese are putting on the smaller alternative coins will tend to drive people to the “safer” BTC market.
- The pressure that the Chinese are putting on new coin ICOs will also work to BTC’s advantage.
- I think that part of the logic behind the Chinese move is that their cost of electricity is increasing as their cost of imported fuels increase, and this tends to put them at a cost disadvantage against other competitors.
- And last, but not least, the Chinese will try to push their own coming coins at the expense of other coins, most particularly Bitcoin.
So, what do YOU think? Please comment below!