Only Sharks Will Feed on the Crypto Market’s Elusive Price Bottom

Markets and Costs

2018 was a 12 months of market bull traps and sliding costs. Now, because the 12 months involves an finish, many cryptocurrency merchants have been discussing the elusive “value backside” for his or her favourite digital asset. Nevertheless, professional merchants perceive that catching a falling knife is tough and that elusive market bottoms can disappear inside the blink of a watch.

Additionally learn: A Look at Some of 2018’s Most Popular Cryptocurrency Traders

Catching the Falling Knife

Only Sharks Will Feed on the Crypto Market's Elusive Price BottomWhen the market is up and very bullish it’s straightforward to foretell swings in both path and make some fast bucks. However when the worth of a sure asset has been in a downward spiral for near 12 months, guessing the place the coin will backside out is rather a lot tougher. Guessing the precise second of capitulation is sort of inconceivable and normally solely the fortunate catch excessive value bottoms.

In actuality, a digital asset like BTC drops a couple of legs down in value and the worth ‘flash crashes’ momentarily. Solely a handful of courageous souls will catch the candle’s deepest wick. Merchants are strolling on a razor’s edge shorting the worth of BTC with 100x leverage on Bitmex within the hope they may catch that elusive backside. Some sharks with deep pockets have extraordinarily low orders positioned on exchanges ready to feed on capitulation.

Wagers Positioned on Decrease Crypto Costs

An important indicator of the ‘backside feeding’ pattern is the quick positions positioned on numerous markets that supply margin buying and selling. BTC/USD short positions are extraordinarily excessive this week on Bitfinex with 38,488 shorts resting on the alternate on Tuesday, Dec. 18. Quick positions for BTC/USD touched an all-time excessive on Dec. 7, surpassing 42,000 shorts on Bitfinex. Different high cryptocurrency markets like ETH and BCH have additionally seen a large number of quick calls over the previous couple of weeks. The identical day on Dec. 7, ETH/USD shorts on Bitfinex reached the very best stage ever with over 426,000 positions. Though since then ETH/USD shorts have dropped significantly, there are nonetheless extra shorts at the moment (302,000) than there have been all 12 months lengthy. This means that a big portion of merchants consider that the worth backside of the highest cryptocurrencies has not but been discovered.

Only Sharks Will Feed on the Crypto Market's Elusive Price Bottom
BTC/USD quick positions on Bitfinex on Dec. 18, 2018.

Sharks With Deep Pockets Seeking to Backside Feed

One other place to view the hungry sharks ready to feed on capitulation is the order books of the most well-liked exchanges. Most depth charts solely present a fraction of what persons are keen to pay or promote their bitcoins for on order books. Nevertheless, you may have a look at order books even additional on sure exchanges to see all of the hungry backside feeders ready for a fast flash crash.

Only Sharks Will Feed on the Crypto Market's Elusive Price Bottom

For instance, on Bitstamp’s BTC/USD order ebook there are some big 100 BTC or extra orders for something under the $2,800 value vary. These merchants have their fingers crossed that their orders shall be stuffed throughout these valuable seconds or minutes of pure fear-driven capitulation. Selecting a place is a guessing recreation as the worth might cease at $3,000 or $2,800 however it might flash to $2,500 within the blink of a watch.

Inaccurate BTC Backside Predictions

The humorous factor is that merchants and analysts have been calling the underside all 12 months lengthy and never a kind of $10,000, $7,000, or $5,000 bottoms stayed for very lengthy. There’s been a ton of bitcoin market bull traps and ‘dead kittens’ all through 2018 and every time individuals thought the worth had touched backside. “Might 2018 would be the final time we ever see bitcoin underneath $10,000,” Charlie Shrem told his 156,000 Twitter followers on Might 3. In an analogous occasion, the infamous Max Keiser stated to his Twitter followers:

Bitcoin examined backside at $6,000 and it’s now on monitor to publish new ATH — $28,000 is *nonetheless* in play on this rally.

Only Sharks Will Feed on the Crypto Market's Elusive Price Bottom
In distinction to McAfee’s opinion, BTC has suffered from an 82% correction since Dec. 17, 2017.

The Backside May Be a Fast Reminiscence or Even Years Away

The “backside” predictions final spring by business luminaries had been confirmed unsuitable and their inaccurate forecasts, based mostly on zero fundamentals, ought to be thought of pure hypothesis. The very fact is that predicting the bottoms and tops within the cryptocurrency market is extraordinarily tough and even once they do happen, value bottoms may very well be fast and painless or final for years. An important instance of an evasive value backside was the spike in gold spot costs again in 1980. Historians will keep in mind that a troy ounce of .999 tremendous gold touched a excessive of $600 per ounce that 12 months and on some exchanges as excessive as $850. It took 21 years for gold costs to the touch a “backside” when it touched a low of $256 per ounce in 2001, dropping 57.33 p.c of its worth.

Only Sharks Will Feed on the Crypto Market's Elusive Price Bottom
After the worth of 1 ounce of gold touched a excessive in 1980 it took 21 years for gold to backside.

It additionally took an awfully very long time for BTC to seek out its backside again in February 2015, going under $200 per coin. Folks will keep in mind that BTC touched a excessive of near $1,300 per BTC earlier than falling all through the whole thing of 2014 and into 2015. Yesterday, cryptocurrency costs bounced pretty well on international markets, which coincidentally passed off on the identical day BTC reached $20okay on exchanges one 12 months in the past. In some individuals’s subjective valuations, BTC’s nadir has already been reached, although it’s doable the market downturn continues. The reality is that cryptocurrency bottoms shall be recorded in historical past, however predicting or seeing one because it happens is essentially a matter of luck.

What do you concentrate on cryptocurrency luminaries calling the underside for sure cash? Tell us what you concentrate on the topic within the feedback part under.  

Disclaimer: Worth articles and markets updates are supposed for informational functions solely and will to not be thought of as buying and selling recommendation. Neither Bitcoin.com nor the creator is answerable for any losses or positive aspects, as the last word choice to conduct a commerce is made by the reader. All the time keep in mind that solely these in possession of the personal keys are in command of the “cash.”


Pictures through Shutterstock, Pixabay, therealasset.co, Tradingview, and Bitcoin.com.  


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