[Re-sent] Bitcoin Update: Volatility, FUD and Sale of 2021

View this email in your browser

What a crazy week in crypto markets!

The market was hot with unsustainably low bitcoin dominance, but FUD and a technical price breakdown resulted in a serious correction. While fear, uncertainty and doubt (FUD), and the subsequent volatility, is hair-raising, this is the norm in bitcoin.

I have written two articles this weekend as I digest the markets and re-position.

• Digest last week’s events, the learnings and reasons we are not heading into an extended bear market (5 points on each).

• Downside models provide an indication that the price correction will likely peter out before $20K.

Here are the key points:

After a 40% correction, the bitcoin price is astoundingly attractive. We are 7% below the stock/flow prediction at a time when institutional interest is heating up. While institutions may very well have triggered the selling pressure around US Tax Day, signs suggest that they are not selling wholesale out of their positions. Neither are long-term holders. By contrast, retail is freaking out and running for the exits. Those that had particularly large exposure in smaller coins are probably spooked because these coins have come under even more pressure than bitcoin. This is not the right time to follow the retail crowd!

The fact is FUD will always exist. If you understand the technology, FUD should not worry you. And if have a clear strategy, then the price volatility should not worry you either. I am not dismissing the anxiety (I experience it too), but this is the truth. We are in the midst of an economic, social and technological revolution. Did you expect this to take place in a straight line?

Stop crying, grow a pair and engage! (he says to himself) This is not the time to cower away because of any mistakes you might have made in the last few months. Let’s face up to them and use them as fuel for better outcomes in the next 6 months.

Another truth - bitcoin continues to run as smoothly as ever. No matter what Elon, Jerome of Xi are saying, transactions are being processed. Bitcoin does not care about the price volatility either. Bitcoin fell 40% but no central banks came in to save us. I do not think we will, but if we go as far as $20K, no one is coming to help then either. That is the point - bitcoin does not rely on corruptible centralized bodies of power. It responds positively to their mistakes. 

Bitcoin will emerge from this volatility more robust than before, and I expect it will build a foundation for much higher prices later in 2021.

More detail can be found in these two articles: 

• Digest last week’s events, the learnings and reasons we are not heading into an extended bear market (5 points on each).

• Downside models provide an indication that the price correction will likely peter out before $20K.

Good luck out there!