That was three turbulent days. 17% up and 17% down. A high and low of emotions. In the end, the realization is that a parabolic development, as the Bitcoin has taken and as can be seen in the left logarithmic 1-day chart (Bitstamp on TradingView), can not run up forever.
Parabolic developments are PONZI systems (in Germany they are also called pilot games). As long as everyone pays their capital, say investing money to buy Bitcoins, the system works. If one or the other little player wants to get his money back, that’s no problem. That’s enough capital. But if some big players want to get off because they have enough and want to make their take profit, then suddenly there is not enough fresh capital in the form of new buyers. And then such a system dissolves, as one knows it, but once again did not want to admit. In my last blog, I described how Bitcoin fell hundreds of Dollars in just a few minutes. That was such a harbinger. At that time it could still be caught. But on Thursday not any longer. A fall of $ 2000 in 15 minutes. These 15 minutes can be seen on the right in the 1-minute chart of Bitcoin.
How can it continue now? Please take another look at the left chart. The Bitcoin has barely built up any support on its way up that could now keep him on his way down. The next two supports, which are quite obvious, are in the area of the dashed, horizontal, black lines. In my personal opinion Bitcoin will gradually move into these areas. I also think that Bitfinex/Tether may have played a role in the whole development. And I do not know if there is still the power to heat up another run. Maybe they have already earned enough.
You know I went short with my eToro account, CryptosWithB66, because I thought parabolism was going to dissolve. Two days too early. I would never have expected a rise close to 14,000 USD. Never. In case it went higher, I decided to buy a second short position at 13,800 USD. Honestly, after the brilliant upturn, I was left with some courage. It could have gone further up. Currently my short is in the plus. I leave him standing. Short-and-hold. Because the correction can last for a long time. For a follow up with another short (then only in Bitcoin) I look very closely at the area around the 10,500 USD (Bitstamp).
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