Crypto price surge, what’s going on?
Here is the usual disclaimer. I am not a financial adviser and this is not financial advice. I do feel though compelled to comment on what I am seeing right now. I have been through these wild crypto price swings many times before, but for the first time in over a year, I see FOMO, the fear of missing out, coming back.
People who have not been in contact for a while are back and they suddenly want to talk about Bitcoin and Crypto. Lots of them!
With many of the Cryptos up 25% in under 24 hours, and with Bitcoin doubling in price within less than 2 months, who can blame them.
This is just a short article today because it is Sunday and Mothers day and my Mum is more important than Bitcoin. Bitcoin does, however, consume a substantial part of my life and I feel it’s important to get an article out today given the current price action. A few days back, I wrote an article about my amazement at the Bitcoin price surge given we had two very significant bad pieces of news.
One is the huge hack at Binance and the other the tether scandal. That amazement continues today. What I want to say is, you need to be careful if you are new to this space. Yes, the crypto price could continue the current upward trajectory, that is entirely plausible. Personally, I think we will see a pullback. My reasons for this are that the volume on the chain has not seen a huge increase in line with this price action. I think we are seeing a short squeeze where a large buyer or group of buyers buy up the market and destroy the people who have taken short positions. Short positions are where people are betting the price will go down. A whale buying up the market forces them to close their positions and this cascades the price upwards. The Whales, or ‘big buyers’ then often sell and the price returns to a lower position. That is just one scenario but one to be aware of if you are just about to enter the crypto market.
The news that Fidelity is finally entering the market is massive news and is a strong catalyst for upward price action and yes that could be a reason for this price action but I don’t think so. This week we are going to look at the fundamentals of the Bitcoin ecosystem and Crypto in general. The fundamentals are getting stronger by the day in Bitcoin and this makes me very bullish on the price. I am concerned however that a massive bull run is premature and would prefer a slower upwards movement. I doubt I will get that wish and I see a number of bull runs and bubbles as Bitcoin is building up liquidly and therefore stability. Another bubble bursting wouldn’t be good for Bitcoin this year.
Will Bitcoin crash?
I think the bottom is in! We tested the 3k level many times. It does concern me that all the people contacting me the last couple of days still don’t really understand this space. They don’t know the difference between the different Bitcoins let alone the difference between Bitcoin and other Cryptos. With this in mind, we are launching a series designed to visually educate people on what Bitcoin is and Crypto in general. You can subscribe to that content here.
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See you tomorrow.
