Bitcoin fell 50% off its high today – is this a dip or the beginning of a crash?

cryptocurrencies

Today was an incredibly interesting day in the Cryptocurrency world as Bitcoin plunged in price, inspiring the hashtag #bitcoincrash. At it’s low the cryptocurrency fell 50% off it’s high of $20k dipping into the $10k range but quickly moving back up to the mid $14,000’s where it sits now.

Now it has been quite a while since I used Candlestick Analysis, but a long time ago in a galaxy far far away I did some Forex day trading and Candlestick Analysis was pretty essential to know when to enter and exit a trade. Now, more than ten years later I’m reading beginner tutorials to get back into the swing of things.

Oh, that’s just the long way of me saying that I can’t tell you too much about the chart below, maybe in a few months I’ll be able to go deeper. For now I can tell you that this daily chart tracking Bitcoin’s price since late Oct shows a pretty bearish pattern that started forming earlier this week:

btc-chart-after-dec2017-crash

What was also interesting to see is that most of the other major cryptocurrencies went down with Bitcoin, and just looking at Ether and Litecoin shows that these three actually exhibited pretty similar behavior when it comes to price movement. Here’s what Ether looked like and Litecoin looked almost exactly the same.

Ether after the Dec 2017 crash

Now all the Litecoin I have at $43 so even though there was a nice dip, it still feels pricey to me. I’m in a similar boat with Ether with most of my ETH portfolio in the low three hundreds. So the thought of buying Litecoin in the high two hundreds and Ether in the seven hundreds honestly sounds crazy to me.

Of course that makes me think – well, I am in this for the long haul, and I still believe in Ethereum and Litecoin just as much (if not more) than I did when I first bought them, so why wouldn’t I but on the dips on their way up? That being said, given how volatile the crypto markets are right now, I think it’s hard for anyone to really know if this is just a dip on the way back to fresh new highs, or a roughly 30% discount across just about every major cryptocurrency.

So I’ve been going back and forth all day, and now and finally decided that I can’t decide. I read a bunch of different threads on Reddit (this is my favorite), looked on forums like Bitcoin Talk…and there are people on both sides but the general sentiment seems relatively positive, the seasoned Bitcoin investors feel like this is par for the course.

This made me think that now might be a good time to put more money into Ether and Litecoin and finally jump back in the Bitcoin game. But like I said above, I’m going to sleep tonight undecided.

Which is why I’d really like to hear from you – what do you think, is this just a quick dip before we move onto fresh new highs, or is this the beginning of a bigger crash? Comment and let your voice be heard!

{ 6 comments… add one }

  • Fuadiansyah December 22, 2017, 8:21 pm

    Just HODL!!

    Reply
  • Anunt December 22, 2017, 9:02 pm

    This was a Christmas gift.
    Good Luck to all.
    I bought more btc at $12,200.
    I bought bitcoin cash at $2,400.
    I bought more eth at $610.
    I bought more ltc at $230.
    When it doubles, i am selling again…then wait for dip to reload again.
    Good Luck.
    Have A Merry Christmas And A New Year!!!

    Reply
    • Morgan December 23, 2017, 12:47 pm

      Nice timing on those buys @Anunt!

      @Leonard – thanks for sharing, I definitely agree that there is no way we are going to see over a thousand cryptocurrencies in every day use, I feel the same way about new gTLDs. At the same time, I think the top five cryptocurrencies are probably under-priced right now given that these are still the early days.

      Of course there’s no right or wrong answer. While we all compare Bitcoin to other markets we know and understand the reality is that we’re in completely new territory here that might not play by any of the rules, or follow any of the models we’ve seen before.

      Reply
  • Leonard Britt December 23, 2017, 1:58 am

    The crypto market in recent months reminds of me of the late 90s tech bubble. We may have just seen the equivalent of Nasdaq 5000 at the height of the .COM bubble. Amazon, Apple, Google, Ebay are thriving businesses today but even the cream of the crop came crashing down during the bear market which followed the bust. Many companies shut their doors by 2002.

    There is absolutely no way that long term we are going to see well over a thousand cryptocurrencies in every day use – to pay for goods and services like we do with debit / credit cards today. Perhaps a dozen or so survive long term. OK Lycos.com still exists but when was the last time you used Lycos to do your internet searches? Altavista resolves to Yahoo.

    There is no denying that blockchain technology will develop some amazing business solutions over the next several years. Crypto is just one application of blockchain technology and the crypto space certainly has some work to do when it comes to interfaces, account security and customer service. After trying to upload my ID a few different ways a dozen times at Coinbase I gave up. I had to really hunt through their menu to find a customer support contact form. And then I did not receive a response for about ten weeks. Would that happen with a Chase, Bank of America or Wells Fargo?

    Markets don’t go straight up forever. Even in a prolonged bull market, there are corrections. A correction in the crypto space is long overdue. I believe the Nasdaq dropped some 75% or so during the 2000-2002 bear market. Given that Bitcoin was under $800 earlier in 2017, an 80%+ correction from the peak of nearly $20 thousand would not surprise me.

    Reply
    • John M December 23, 2017, 6:49 am

      Leonard you’re 100% correct. Please see our comments below. Happy Holidays.

      Reply
  • John M December 23, 2017, 6:44 am

    Morgan we have a small fund ( domains are more of a hobby for me) so i asked one of the young guys who is so much brighter than me if he if I was reading the long term charts correctly and he said I was. The results , as Leonard above stated so well, is that although Bitcoin can bounce right here it’s headed for a MAJOR correction to a minimum of $3,100 and it will take all the others with it. If you noticed yesterday XRP ( Ripple) held up for a while but ended up dropping eventually from $1.24 all the way to .67c approx.a 50% haircut. Leonard’s statements above are in my opinion 100% correct. That said there will be survivors that will be exceptional buys that will make you rich. My suggestion for the average retail buyer – not the junkie gambler – is wait for the severe drop in Bitcoin and simply buy GBTC via your normal brokerage account because at that point the “premium” will be washed away just as it did yesterday on that big drop. One sha of GBTC = approx .92 of bitcoin. People will think we’re nuts but we think GBTC can go back UNDER $100. Happy Holidays!

    Reply

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