Curious why the big drop in Bitcoin today? You can thank the dollar...
The dollar is seeing a major bounce right now which is pushing assets down that are priced in dollars
A big part of the bitcoin story had to do with a weakening dollar, in fact some wouldn't have even described it as weakening, they'd call it tanking.
For months and months now the dollar has been moving lower on a consistent basis with few bounces along the way.
Well, we just got a major bounce in the dollar.
Check it out:
(Source: https://www.tradingview.com/x/p26KNuII/)
It's still early, but so far this is one of the bigger bounces in the dollar since March of last year.
Bitcoin and stocks both sold off as the dollar moved higher.
Where do we go from here?
Bitcoin briefly touched $30k and found some decent support there, some might be tempted to jump in at that level, especially since it has marked about a 27% drop the all time highs...
However, we may still have a bit lower to go.
I think the dollar is likely to bounce a bit more over the coming days and weeks which will further be a headwind for bitcoin.
In the medium term though I think we are going to get another stimulus plan approved which is going to put pressure on the dollar again.
So, while we are likely to have a higher dollar price in the near term, it's likely to be short lived as the dollar eventually heads back down and makes new lows.
We may see bitcoin go below $30k in the coming days/weeks and that is where I will be buying it.
I would be shocked if it goes below $25k though, so we are not too far from where I think the eventual bottom will be.
Stay informed my friends.
-Doc
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@jrcornel, We should get used to crypto shock. Stay blessed.
Ha, watching bitcoin since 2013, I am plenty versed in crypto shock. :)
🙂👍👍
Great analysis. What you are saying seems to be a pretty popular view based on what I have been reading. It makes me feel like I might need to get some funds in order incase I want to make a purchase myself. It seems like every time I am ready to make the jump I have issues with my bank or my credit card. Getting some USD into Coinbase ahead of time would help avoid that kind of thing.
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Exactly. I remember back in the day when it would take me over a week to get my cash available to be be used on Coinbase. I think now they let you purchase stuff as soon as you transfer, which is better. The ideal option is to have some already there and ready to go.
Coinbase still says transfers can take up to 3 days, but usually it is matter of minutes, even outside banking hours. I'm using simple wire transfer as the fees with credit card are higher... For wire transfer, the fee is about 0.18 USD when converted from EUR, for credit card it is about 2.42 USD (1.99 EUR).
It is a weird situation for me because when Dollar gains against Bitcoin, it also gains against my local currency, which is sort of good for me, in terms of purchasing locally made products.
If the dollar goes on a "run", I could still end up richer in naira, simply because my currency is a shitcoin.
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Didn't I say we are going to see a dip after "first" climb attempt, but not to $17k... Here it is... Every time asset goes up like a rocket, it falls on its ass soon after... That's because fast climb will almost always trigger panic selling.
My next prediction is we will go beyond $40k and then we will get another dip.
I agree with you that the dollar is probably going to be all over the place until after the inauguration and we see what they are going to do about those additional stimulus checks. That could have a huge impact on which way the dollar goes.
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I see opportunity to trade
when the market is swinging
down.
Bitcoin heading to $25k and around
is learning curve for everyone.
What do you think is the resistance so far ?
!BEER
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Sorry, you don't have enough staked BEER in your account. You need 24 BEER in your virtual fridge to give some of your BEER to others. To view or trade BEER go to hive-engine.com