Crypto coins ...anyone here into it?

   #21  

JMR

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I can see a Madoff :)
 
   #22  

dieseldub

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Volatility is your friend where it comes to making money relatively quickly, but you would also have to understand how to actively trade, use various indicators that can indicate momentum reversals and when the buy vs. sell equation is shifting one direction or the other or even getting your hands on inflows vs. outflows data, same as you can with any other investment.

The real interesting part about the crypto space in general is Bitcoin is King Kong, and most of the rest of the space ultimately will follow it. If Bitcoin is going up aggressively, so will most of the rest of the crypto space. Most coins likewise will also go down not long after Bitcoin begins a downtrend. There have been some interesting patterns that people who watch the space closely have picked out.

First, it's that there appear to be 4 year cycles with bitcoin. This revolves around the miner payout halvings that happen approximately every 4 years. Not every bitcoin has been mined just yet, and miners are paid out in bitcoin, but every 4 years, how many bitcoins they receive is cut in half for "winning a hash". Bitcoin miner payouts are ultimately mildly inflationary for the asset, and as the market goes crazy going up, miners will start to sell their won coins into the strength of the market, which dilutes the market some. Although aggressive upwards markets tend to also have buying pressure fade almost as fast as it started to push it up... so there's that as well.

But still... it seems every time Bitcoin makes a massive upwards move in a bullmarket that lasts 2-3 years (and the most aggressive upwards movement tends to be in the year and a half immediately following a halving), after it hits its ultimate peak of that 'cycle', it can spend an entire calendar year grinding downwards in price.

The last halving happened almost the same time COVID lockdowns began in March 2020. It nearing 2 years after that halving now, in all likelihood the peak we saw in November may very well be the crypto market's top for 'this cycle', meaning it's time to brace for the next calendar year of it grinding down in price.

Good tip, if you go on something like TradingView.com, it's a free stock and crypto charting site, you can use I think upto 3 indicators in the free version at any given time. If you zoom out, maybe so where each 'candle' represents 1 week of trading, then put on a simple moving average indicator. It will default to drawing a line of the last 9 candles averaged together. Change that setting to 200... So you're looking at a very, very long term trend line that is the moving average price of the last 200 candles.

You will see that every time the crypto market hit absolute bottom, the price basically came down to meet that 200 period moving average line (again, with the setting on 1 candle = 1 week's worth of price movement). If you want to maximize making money on just about any crypto coin that isn't an absolute scam (stick to the major ones that most of the market seems to agree are legitimate projects--Bitcoin, Ethereum, Cardano, MATIC etc) wait for bitcoin to drop down to that 200 period moving average, then leverage buy as much as you can. Within 3 years after doing that, you will have massively multiplied your initial investment.

That being said, if I had to guess, crypto is currently is entering its longer-term bear market. I wouldn't want to touch it unless there were a way to trade options or even found an exchange that allowed U.S. investors to short sell, because when the market is choppy and you're a decent technical trader, you can make money on all the little dips and rises it makes because simply longing anything in crypto and leaving it after it's already spent most of its long term upwards momentum is not a great idea. It will take 3-4 years before its price overtakes where it is now in all likelihood if my assessment is correct, and the largest money making potential is of course at the market bottom, not somewhere near a recent peak.
 
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   #23  

dieseldub

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Here is a quick chart I made looking at Bitcoin's price movement all the way back to January 2016, seeing the bull market that took it from about $400 at the start of that chart to near $20,000 by the end of 2017, followed by a year long sell off, then a mini-bull market run that took it from 3500 to briefly above 13,000 in 2019, then crashing back down again during the COVID panic sell off (plus, that's when the next halving happened). And since March 2020, it's run from a low that was around $4000 per coin all the way to above $60,000 per coin... twice.

But, after any wild parabolic upwards price movement like that, you have to expect it's going to be due for a near equally large downwards movement back down.

You can see that each of these market 'bottoms' hits that 200 period moving average red line on this chart. That may well be the entire crypto space's next stop before it resumes a longer-term upwards trend. Right now, that moving average line is a little over $19,000 per BTC. So, I would say somewhere near $20k per BTC is the target you should be looking at to buy back into anything in the crypto space to hold for a few years for the biggest gains if you don't want to take the time to figure out how to be an active trader with every little dip and rise back up.

Remember: it doesn't matter if you think the entire space is a scam, it only matters if other people are convinced of its utility and have a large desire to trade in the space. Big money investment firms salivate at the volatility in this. There are even bitcoin futures contracts trading out there now for large investment firms and retail traders who have adequate margin that gives them exposure to it without having to directly buy the product itself. If there are futures contracts, big money has accepted it and considered it to be a legitimate asset so they can trade in it.
HWxNZFCp
 
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   #24  

dieseldub

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Since it's like an electronic form of pyramid selling where the early adopters earn big but the later entrants lose bigtime?

Possibly. Early adopters do earn big, but later adopters can as well when you realize it actually goes through cycles of massive price movement every few years. And every time it sets a new 'floor' or support level higher than the last. I would assume if this was all just a giant scam, the rug would have been pulled by now--more than a decade after its introduction.

It has gotten to the point now where large investors have purchased coins and created other tradeable securities from it (Michael Saylor's 'MicroStrategy' company has created Bitcoin and Ethereum trusts that are tradeable on the OTC market), there are even bitcoin futures contracts that more conventional investors can trade rather than going on to coin exchanges.

Just remember that where it comes to the cycles of a market system, there always will be 'bag holders' near the top. That is the nature of how trading and market cycles work. The smart ones learn to cut losses quickly and how to recognize when a tradeable item has reached near bottom and is likely to reverse back to the upside in the coming months/years and to buy large amounts at that point, slowly selling off as its price movement starts going up aggressively.

What I outlined in the above posts is an easy way to recognize when Bitcoin has gotten close to its market bottom. And currently, we are not anywhere near bottom since it's had a parabolic run up since mid 2020 until late 2021. The further away from the bottom you are, the higher the risk that buying in can go against you.

So, if you're someone more interested in buying to hold long term, I would wait until you see the price getting near that 200 weekly moving average, then buy whatever you're comfortable with and be prepared to hold it for the following 3 years before realizing huge gains.

When the day comes that options contracts are tradeable for Bitcoin, that's when you know it's gone as mainstream as possible for active investors. And those who understand how to trade them make many multiples more money per dollar price movement of the underlying security as opposed to merely longing the underlying.

Just remember, even the bag-holders who bought at the very top of each market cycle, if they had just bothered to hold on and not sell for another 4 years, they were back making many multiples off their initial purchase as well... Just look at the charts.

Also just want to mention, El Salvador now uses Bitcoin as legal tender there. It's one way to get off the never-ending inflation train...
 
   #25  

Bermanan

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A small startup that I did some side consulting for a while back launched a Regulation CF offering a few months ago, and let me buy in with their employees before opening it to the general public. I threw a few Atlantic City casino drink tips (*) into the pot from my play money investing account, purely as a gamble. (Most of my non-play investing account money is chilling out in an index fund that tracks the S&P 500, as recommended by many financial consultants and retirement planners. I also have a few bucks in Manchester United just to be able to say that I partially own one of the largest sports teams in the world, but am well short of the amount needed to get tickets to Old Trafford.) Long story short, the Regulation CF offering introduced me to website where small companies are looking for pre-IPO hobby investors. A step above the craps table, because you can do your research on the companies before throwing the dice.

(*) I had a friend who used to be a "whale" (BIG hobby gambler) in Atlantic City and Las Vegas. When you run $100K/day through a casino, they gladly give you comps like $600 bottles of wine for free. The servers expect a 15-20% tip from the recipients based on the retail price of those freebies, hence he thinks of $100 bills as drink tips.....
Your story effectively illustrates a balanced approach to investing that combines stable, long-term investments with more speculative, high-risk, high-return opportunities.
 
   #26  

sono

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Bitcoins are a gamble these days highly volatile no massive gains
 
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