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trading

Bitcoin Halving

The million dollar question, will the upcoming bitcoin halving (increased difficulty) cause some miners to capitulate before or after the halving. No doubt, that smaller miners will be taken out. When small miners gets taken out, they will dump their coins.Will there be enough demand to absorb the supply? Will there be enough retail demand to absorb the incoming supply?

Every halving event, smaller miners get taken out. Same cost to mine, half the reward in coins. The market price of bitcoin has to increase by 2x for miners to break even. If Bitcoin market price fails to keep up with cost of production. Smaller Miners will exit-dump their coins before or after the halving. The increased difficulty will force many smaller miners to upgrade or expand their mining capabilities. Some can afford it, some can’t. When miners dump, market must absorb the hits, meaning when a group of smaller miners want to sell of 10,000-20,000 bitcoins. you need xxxx amount of buyers to buy those 10,000-20,000 bitcoins at the same price level or price will tank and break support.

On average 1800 bitcoins are mined per day, right now. How much is attributed to smaller miners. I don’t know.

Smart money isn’t buying the dip…. they will let it dump to cost of production then scoop it up. And it’s hard to put a $ on cost of production, due to difficulty adjustment. It could be $5xxx. I am just guessing. I am just saying that Halving doesn’t mean bull-run. The market works by supply and demand principles. For every seller, there must be a matching buyer.

Categories
trading

Cryptocurrencies are still the best performing asset class?

Unrealized profit = Imaginary profit

Very misleading article from wallstreet-coindesk. Fact is, less than 10% of people who call themselves ”crypto-investors” take (full) or (partial) profit during bull-bear cycles. Unrealized profit is imaginary profit. Always secure profit during distribution campaigns. Use the capital gains to re-accumulate during accumulation campaigns or hedge against future losses.

The 2017 crypto-boom was a outlier.

Common-sense? Yes, but how many ”investors” who think and call themselves investors know how to properly chart. Hurrdurr Technical Analysis doesn’t work. That is what the Big-Funds wants you the believe. Retail volume doesn’t call the shots. Never did, never will. Take this data with a grain of salt. But it provides you a idea, how the market works.

Supply

Less 4% of the bitcoins in circulation are being traded. The other 96% of the supply are withheld to enforce scarcity and used to manipulate the prices. The institutions who control the supply will control the price. For traders this is heaven.

Don’t Fomo

Bitcoin will be halved around May 2020. We will see a small bully rally before the halving. I am expecting a sell-off before the halving event. Similar to the Litecoin Halving in 2019. Be prepared for a massive bull-trap. When Litecoin broke support, media was hyping up the halving event. Handful of people got super-rich in 2017, more than 90% of the people who didn’t sell got financially ruined. Expect some fuckery leading up to the halving-event. I am guessing 2020 will be a bearish year.

2020

Expect resistance around $10,000 (rough number) . Orderblock at $10,000 needs to be cleared, may take few retest to fully absorb the supply. With supply. I mean disgruntled left-behind bagholders who didn’t sell above $10,000. If these blocks get taken out, price will rally higher. But I don’t think it happen this year. We haven’t seen capitulation yet.

I am not expecting halving-mania parabolic phase that will launch bitcoin to $20,000 in 1 wave. A more realistic scenario would be a slow grind, multiple retest around $10000 to fully absorb the supply.

Two types of money left in this space. Traders and baghodlers.

Traders took profit above $10,000. Bagholders held on above $10,000, expect some break-even selling at $10,000.

Price will just rotate between $10,000 (realisticly $8000) and $6500 through out 2020.

ALWAYS TAKE PROFIT