Friends, Traders, Gentlemen and women, welcome to some thoughts on Bitcoin. Today, I want to go over some thoughts on Bitcoin. Everywhere I read people are saying BTC is going to the moon. There are moon projections all over and some of them are quite good. But will it moon this soon? and if it does, why?
I am playing Devil's advocate here to every single moon post(there have been a lot!) and want to lay out some possibilities for BTC. Of course crypto never seems to go quite as planned but this will give us some guidelines to different scenarios and how thing will play out.
Volatile Growth Scenario - We launch upwards to 15k or even higher. Doing this will result in a lot of buyers and sellers constantly battling it out and bitcoin will ultimately go higher but expect a lot of volatility in doing so. If you look at the circle comparison I drew before the last run, we get some volatility and ultimately stay flat before we really start to move up. This would coordinate with a positive MACD, even though it's weakening. RSI has many times before been irrelevant as price moves up. fundamentally there has been plenty going on to lead to a high growth scenario.
Slow Growth Scenario - I feel this would be a healthier version for Bitcoin to follow. Lets first look at some technicals on why this could happen. Volume - It's gone up a lot and a lot of people have bought in at 6,500 or higher. The ones that bought at the 3.5k area are up 100%+. 100%+ is a really good return. We have already seen some profit taking and if more people continue to do, we could get a move down. Miners and other places that need to keep the lights on will have to sell at these levels. RSI has created a divergence on the weekly. Does this hold any credence or does it get ignored? As mentioned above, MACD is softening.
Charts like this confirm a move up, but also indicate we could get a pull back before upside:
https://twitter.com/hansthered/status/1139939382595506177/photo/1
- hansthered
Where does Libra fit into all of this? I feel it splits these 2 scenarios, either people will buy in BTC a lot now and drive it up, or wait as time gets closer to see what happens. Whether you hate Libra or not, it's going to change the landscape of things quite significantly. Libra will bring crypto awareness to the masses as time gets closer to it's launch.
Risk/Reward ratio: If these 2 scenarios are presented for us in which we either go to BTC 20k or BTC 5k. We have a 100% upside and 50% downside. A 2:1 risk/reward ratio. Is that something you take right now? A question to ask yourself when taking a position right now in BTC and crypto in general. As you know, I am neutral and I am waiting for things to develop
Happy trading and hodling,
-Sherem
https://www.tradingview.com/chart/BTCUSD/7KlO3Unx-Libra-Implications-Possibilities-for-BTC/