The sharp move lower we are seeing in the crypto currencies is not surprising to me as I have said in the past that bitcoin & co. had gotten ahead of themselves and that people should not chase the price and that I expected a correction to at least $10'000 and probably even lower. Here is a video in which I talk about the technical picture for bitcoin on December 20th, https://steemit.com/markets/@maneco64/early-market-update-and-a-technical-look-at-bitcoin-and-gold-prices
So what happens now? Here are some charts of the bitcoin price. The first one is a weekly log chart with 50-week, 100-week and 200-week moving averages. You will also see that I have drawn a couple of trend lines. The top line comes in just around $7000 at present and the second one is a lot lower around $2500. Even if bitcoin were to test the lower line the upward trend would still be intact and the price would still be above the 200-week moving average.
The second chart is a daily log chart with the 50-day, 100-day and 200-day moving averages. The trend line comes around $6000 at present and it would mean bitcoin would trade through the 200-day moving average. Do I know where bitcoin will bottom exactly? Of course I do not but the charts are pointing towards more pain in the short and medium term. We might even see a big rebound for all cryptos in the next few days but I still do not think we are out of the woods.
I am not advising people what do do but only telling people how I see it. I have not changed my strategy towards cryptos. I am still accumulating the tokens that I have an interest in despite this correction. In fact I am adding to my EOS.IO position today and I am still accumulating steem power here on steemit. I think the way to look at this major correction is as an opportunity in which one can dollar cost average at lower levels into the tokens or projects one believes in.
The other way I have positioned my investments is that I have also built a basket of precious metals mining stocks as I think that sectors has great potential in this coming year. I wrote about two weeks ago why I am betting on precious metals and cryptos https://steemit.com/market/@maneco64/why-precious-metals-and-crypto-currencies-are-my-investments-of-choice-in-the-next-few-years
It is not surprising that we are seeing these big nominal moves in the cryptos as we have seen the market capitalization of cryptos go from $15 billion a year ago to around $750 billion recently. Right now we are hovering around the $500 billion mark.
So even thought this correction has been probably very painful for those who chased bitcoin and other cryptos it should be viewed as an opportunity for those who have done their home work to accumulate the tokens they are interested in and think in terms of tokens much like one should think in terms of ounces when stacking gold and silver.