Friday, December 22, 2017

Krugman Snarks Bitcoin Losers as Bitcoin Price Crashes

Bitcoin is crashing and Paul Krugman tweets out:

He links to a Business Insider report which says:
  The price of bitcoin dropped almost $3,000 in early trade on Friday morning sparking fears that a full scale crash of the world's biggest cryptocurrency could be underway.

BTW, I have often warned in the  EPJ Daily Aler that e-currency trading is extremely dangerous but I did provide BUY and SELL advisories to plungers including yesterday before the big break:

Over the last two weeks, Bitcoin has climbed to near $20,000 and is now trading in the $15,500 range. This trading strikes me as significantly different from the trading in the period just before this.

Among the four potential factors that I have listed that could bring the price down was
buying exhaustion.

Since e-currency buying is completely driven by new buying rather than any underlying fundamentals, once the buyers stop coming the price will collapse. Current trading suggests that this may be exhaustion price activity. There may be some added buying coming in over Christmas as "bitcoin geniuses" sit around the Christmas tree telling their friends and relatives how easy it is to make money in Bitcoin but that could be the last upward draft. But I am not waiting around. It is time to take profits.

I identified the new "American run" in Bitcoin at around $4,000 anyone who was aggressive enough to buy at that time has very huge profits. The same thing with my mention of ethereum at $250 and again at $400,  It is now trading at $790.

There may be more upside in the future but e-currency is a very high-risk investment in the first place and it is now getting riskier. I'm out. I may trade it again in the future but that will be based on a perspective that new momentum will be developing, right now the downside risk appears overwhelming.
(Note: Past spectacular advice  does not guarantee future spectacular advice.)

And here is an interesting tweet for those of you who think all e-currency trading is on the up and up:



Via CNBC front page, above the fold:

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