Finally after weeks of Doom and Gloom in the news space for Bitcoin' we got our first positive news in weeks. First we have to separate "News" from fundamental events which are two separate things. This was a Fundamental event and with a 20%+ bounce off the low of 5900 the street appears to be welcoming a breath of fresh air.
What did we learn from the hearing.
1) The CFTC is very pro Bitcoin' and emerging technologies even creating LabCFTC to promote responsible FinTech innovation 2) The SEC is more concerned about ICO' and enforcing current regulations 3) Everyone was concerned with insuring consumers and retail investors were protected as best as possible against scam coins, and understood the risks of trading these assets. 4) There was concern with how crypto currency exchanges are not regulated in the same manner as other exchanges 5) Many senators appeared to lack knowledge of the space entirely 6) DLT is a disruptor and will have beneficial impact in the future and would not be here if it wasn't for bitcoin' 7) There were 3 concerns that the SEC had in allowing crypto ETF's which were "price discovery, custody, and volatility" 8) Big Banks are manipulating the markets and getting away with hand slaps. 9) The markets have less oversight then our current markets which could lead to market manipulation. 10) There was no mention of Banning Bitcoin
The hearing focused more on regulations to protect consumers, and what the SEC, CFTC and other agencies were doing to eliminate scams and fraud and enforcing current laws and regulations. While the SEC chief was overall Neutral to Slightly Positive, the CFTC chief was highly positive even mentioning that his kids were investing into the space. This is clearly a step in the right direction and positive for the space as a whole.
This definitely had an impact on pricing as we bounced off our low as the opening statements were ongoing. We had our strongest daily buying volume since Nov 2015. Now to be clear we are still in a mid term downward trend. If I did not own any bitcoin I would probably be adding here with a partial position. If I enter any space for the first time it is dangerous to go all in out of the box. As I updated yesterday we are testing the median of the channel and looking to find support at the 0.618 level of the overall move from 175 to 19500. What I want to see is the 0.618 to hold, and a breakout of the channel above the 8398 level which is the 0.382 level from the recent down trend. Until we break the 9860 level we are still in a bear market IMO.
Shorting this market is simply foolish whether right or wrong. Shorting on margin will result in eventual portfolio suicide as many in the ETN' markets found out Tuesday. For years they made money only to see it evaporate in one day, and some, causing a 500pt selloff at the open. Keep in mind being out of the market is a portfolio killer as well. I mentioned that 6 of the top performing DOW days happened within 1 week of the 10 worst performing days. Yesterday was the 5th best DOW day ever, one day after a 5%+ pullback. This is why market timers do not outperform buy and hold portfolios and why traders under perform long term buy and hold strategies even though they are cracking champagne bottles.
In the era of fast money it is sometimes hard to hold through these times, especially for newer investors. Having been through many crashes I am un-nerved holding here. I understand this is a highly risky market and I can lose everything. I am fine with that and SWAN. I believe long term the bull market resumes and I just wait it out. If you are not willing to lose everything you invested in this space, can not SWAN, then you are not following the rules of Smart Investing.
Interesting note by Tom Lee from Fundstrat. "Past sell-offs were followed by rallies of 150% within 84 days", "In other words, we think the risk/reward at these levels warrants adding here, even if there is additional downside".
I always enjoy reading your posts. You pay attention to details and teach us like a proper teacher. Most of the traders here ar small, inexperienced investors. So thank you for that and keep up the good work.
With regards to the following statement " I understand this is a highly risky market and I can lose everything." Do you really believe you can lose everything in this market? Sure, it's very risky but seeing that it's being adopted by most of the developed countries, I believe this is starting to be THE market and it will slowly take over the stock market. I bough my first bitcoins when I was 21. Funny enough, in the hype of April 201. And learn it's volatility the hard way. but I did HODL ;) The biggest mistake I have made was selling back in 2015 thinking I have made "lots" of money. I haven't realized what a fool I was until early 2017 when I sat down to look at the 9 year frame picture. IT GOES UP. So I bough again and am adding on the dips.
MedinTrade
⋅
@Shmalick, We are all very happy to learn that you were lucky enough to be one of the early adaptor and made money out of it. Even happier to know that you've been building a nice bag since early 2017. Thank you so much for your input in our learning curve, really appreciate it.
Shmalick
⋅
@MedinTrade, you will not believe it but actually I made NO money until 2017 as I stupidly sold. I was too young to understand it's potential. I did however mine coins for a while and then the market crashed again because of MtGox. There is when I said to myself - 'I'm out" leaving my coins spread across multiple exchanges some of which have closed down....
MedinTrade
⋅
@Shmalick, Early 2017 was still a good entry, unfortunately I started to ride that crazy Crytpo train early Dec 2017. Hopefully it ain't too late for late players like me and 2018 will be as good as 2017, let us dream :)
goldbug1
⋅
@Shmalick, Thank you very much for the kind comment. As in any speculative market (like the dot com or bio tech) where there is no underlying value or intrinsic value to the equity, you run the risk of it going to zero. I do not see that but my point is this space should not be 100% of your long term investments by any means either. The younger you are the more you can risk. Diversification among other equities is what I would recommend including stocks, metals, and real estate (your house).
If you are young it is fine to invest here, but your focus should be on not having debt and 1 year of bill money in the bank! This puts you at an advantage for the long term. A HUGE advantage. If you have credit card debt that should be your first goal is to get it paid off. The last thing you want is a market crash, economic recession, and your selling your investments at the worst possible time. Seen it and instead of having cash to invest when the opportunity arises, they are selling their investments often at a loss to pay rent and car payments.
Shmalick
⋅
@goldbug1, thanks for taking the time for some more education :)
Filip17surf
⋅
@GoldBug What does DOW stand for? And what does SWAN stand for?
Thanks :)
luckyhelper
⋅
The current upmove is coming to an end. An ascending broading wedge is developing in the one minute chart. This is a strong bearish signal. A short-term trend reversal is ahed of us.
@mishima1992, funny how these legendary traders started popping up late next year calling for sub 3k prices. i wonder who sent them;)
don't forget this site is a great tool for market sentiment manipulators
With regards to the following statement " I understand this is a highly risky market and I can lose everything." Do you really believe you can lose everything in this market? Sure, it's very risky but seeing that it's being adopted by most of the developed countries, I believe this is starting to be THE market and it will slowly take over the stock market. I bough my first bitcoins when I was 21. Funny enough, in the hype of April 201. And learn it's volatility the hard way. but I did HODL ;) The biggest mistake I have made was selling back in 2015 thinking I have made "lots" of money. I haven't realized what a fool I was until early 2017 when I sat down to look at the 9 year frame picture. IT GOES UP. So I bough again and am adding on the dips.