Every now and then I hear someone saying “Bitcoin is Dead”, sure, the last fall was pretty big, however just because a market falls it doesn’t mean it’s over, it means it’s correcting. For a currency to complete die there must be no currency left. Every currency, even the terrible ones have some value and the potential to both move up and down against other currencies and crypto is no different.
We have had quite a sweet rally with Bitcoin and now it’s floundering around, I would expect a drop here (but you never know) to halfway back to the rally for squaring up (where investors take profits), before more moves upwards.
Coming back to market movements. It’s really important to understand that markest move both up and down, using the term “investing in Bitcoin” is deceptive, it’s like you are going to put your money in the “Bitcoin” savings account. It just doesn’t exist. It’s high risk, just like any type of currency or share trading.
Let’s look at the Dow Jones (chart credit TradingView.com).
You’ll notice it plummet almost unhindered down. No one said the “DOW IS DEAD”. In just a few months it returned back to where it was. This is called fair price, every market instrument has a “fair price”, this means there is a price that it will eventually return to, markets can be moved by things as simple as a piece of news, but the news itself doesn’t change the physical value of the currency. The currency will return to its fair price, even if the fair price changes. However, it may happen in the blink of an eye. I’ve watched the Swiss Franc drop 1300 pips in under 5 seconds.
So beware if you are investing in any kind of marketplace, anything can happen and probably will.
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