Bitcoin summary & forecast from someone that never lost a cent trading altcoins

[r0ach]

Lots of people on this forum like to think that Bitcoin has some kind of prestige to it, that it's charts are on another level and can't be compared to alt coin trading, that altcoin charts are just random noise.  I would say they trade very much the same.  Any altcoin trader should look at BTC and see a chart with future implications they've seen hundreds of times before in altcoins, such as my illustration below:



Once you hit this consolidation phase in altcoins, if there is no serious, active development news, such as pruning, the price usually continues to slide downwards, or go sideways at best.  This isn't an anti-BTC post, just the reality of how things work.  If you're looking to make money on BTC in the short to midterm, you're betting money on the following variables:

1)  large, active, BTC development news such as pruning
2)  financial armageddon in the USD or Euro

This simple, but historically accurate view, doesn't really cover erratic or non-rational actors, such as the US government printing free money and using them to buy BTC just because they can.  There are always wildcards out there.  As for reason #1, things like pruning are being worked on in the background, ironically by people not funded by the Bitcoin foundation, but progress is kind of up in the air right now.

So what's the real reason to own Bitcoin if all you're looking for is financial gain and not to make a political statement when there are no clear buy indicators?  That would be reason number three:

3) the long term pyramid element, the periodical halving

Every currency, whether it's virtual, fiat, physical, etc, has attributes of a pyramid or Ponzi, because money is an IOU.  The halving feature kind of cranks that up a notch or two so that people are constantly being pressured to get into the system now while you still can, so that you don't get left behind by people who planned ahead and bought before you.  This pressure exists subconsciously in every Bitcoin trader's mind on a daily basis.  They don't want an entity like Goldman Sachs to corner most of the market and lock them out before the buy signals arrive. 

If you're in an obvious downtrend, by all means, sell everything, but when you're in a *mostly* sideways market, this is where many people still hold 10-20% of of the max of what they wish to invest on a likely uptrend.  It's all about not getting locked out by random actors.  This is one of the main things that keeps the BTC price afloat, and why the BTC price is so explosive.  A large amount of money is just sitting on the sideline waiting to quintuple up on investment in a short time span.

If another BTC breakout occurs, $2400-3000 would be a potential top.  It's not just going to happen for no reason though.  It needs a catalyst such as the variables I already described.  No significant news is bad news in a sideways market, which is why I left out variable #4 for last because it's a chicken and egg scenario.

4)  dramatic media coverage of Bitcoin where people are making money and not losing it to draw in risk takers

The people described in #4 are basically paying the people who gambled on elements #1-3.  Bitcoin is kind of a fugazi where things like the halving's continuous presence and periodic media blitz create large, cyclical effects where people either win or lose big.

[windjc]

Lots of people on this forum like to think that Bitcoin has some kind of prestige to it, that it's charts are on another level and can't be compared to alt coin trading, that altcoin charts are just random noise.  I would say they trade very much the same.  Any altcoin trader should look at BTC and see a chart with future implications they've seen hundreds of times before in altcoins, such as my illustration below:



Once you hit this consolidation phase in altcoins, if there is no serious, active development news, such as pruning, the price usually continues to slide downwards, or go sideways at best.  This isn't an anti-BTC post, just the reality of how things work.  If you're looking to make money on BTC in the short to midterm, you're betting money on the following variables:

1)  large, active, BTC development news such as pruning
2)  financial armageddon in the USD or Euro

This simple, but historically accurate view, doesn't really cover erratic or non-rational actors, such as the US government printing free money and using them to buy BTC just because they can.  There are always wildcards out there.  As for reason #1, things like pruning are being worked on in the background, ironically by people not funded by the Bitcoin foundation, but progress is kind of up in the air right now.

So what's the real reason to own Bitcoin if all you're looking for is financial gain and not to make a political statement when there are no clear buy indicators?  That would be reason number three:

3) the long term pyramid element, the periodical halving

Every currency, whether it's virtual, fiat, physical, etc, has attributes of a pyramid or Ponzi, because money is an IOU.  The halving feature kind of cranks that up a notch or two so that people are constantly being pressured to get into the system now while you still can, so that you don't get left behind by people who planned ahead and bought before you.  This pressure exists subconsciously in every Bitcoin trader's mind on a daily basis.  They don't want an entity like Goldman Sachs to corner most of the market and lock them out before the buy signals arrive. 

If you're in an obvious downtrend, by all means, sell everything, but when you're in a *mostly* sideways market, this is where many people still hold 10-20% of of the max of what they wish to invest on a likely uptrend.  It's all about not getting locked out by random actors.  This is one of the main things that keeps the BTC price afloat, and why the BTC price is so explosive.  A large amount of money is just sitting on the sideline waiting to quintuple up on investment in a short time span.

If another BTC breakout occurs, $2400-3000 would be a potential top.  It's not just going to happen for no reason though.  It needs a catalyst such as the variables I already described.  No significant news is bad news in a sideways market, which is why I left out variable #4 for last because it's a chicken and egg scenario.

4)  dramatic media coverage of Bitcoin where people are making money and not losing it to draw in risk takers

The people described in #4 are basically paying the people who gambled on elements #1-3.  Bitcoin is kind of a fugazi where things like the halving's continuous presence and periodic media blitz create large, cyclical effects where people either win or lose big.

The fact that you think pruning is the largest current development on the horizon makes it difficult to take seriously your post.

I mean most of us understand the chart you posted. It's basic news. But your lack of awareness of potential catalysts is striking to say the least.

[r0ach]

The fact that you think pruning is the largest current development on the horizon makes it difficult to take seriously your post.

I mean most of us understand the chart you posted. It's basic news. But your lack of awareness of potential catalysts is striking to say the least.

I used pruning just as an example.  The Newegg bump wasn't that significant, and IMO was mostly insider trading to begin with.  Then you have other recent news such as floating transaction fees that only really serve to highlight Bitcoin weaknesses instead of strengths.  So what exactly are you talking about in your post?

The best Bitcoin news I've heard recently is the rise of possibly reputable exchanges with liquid BTC/Gold/USD pairings.  Others have tried it before, but without much success.  I see one of BTC's best uses as being the digital transmission vehicle of gold.  

Bitcoin has an inherent weakness that I refer to, for lack of a better term, as "the time capsule weakness".  Since BTC is backed by nothing, if someone was to theoretically go to sleep for 1, 2, 5, or 10 years, it would be an extremely hard sell to go all in on BTC rather than gold in that regard, or even a 50/50 split.  Most people, in the end, would probably choose 25% BTC at most.

The rise of highly liquid BTC/Gold pairing exchanges would probably do a lot to help stability and make it so people who own BTC don't feel like they have to babysit their computer screens 24 hours a day.

Someone theoretically jumping into a time capsule would still probably cash out to a majority holding of gold first, since you can't risk coming out on the other side with nothing, but their BTC holding percent would probably be higher...or more than zero at least...

[lay785]

great analysis

[windjc]

The fact that you think pruning is the largest current development on the horizon makes it difficult to take seriously your post.

I mean most of us understand the chart you posted. It's basic news. But your lack of awareness of potential catalysts is striking to say the least.

I used pruning just as an example.  The Newegg bump wasn't that significant, and IMO was mostly insider trading to begin with.  Then you have other recent news such as floating transaction fees that only really serve to highlight Bitcoin weaknesses instead of strengths.  So what exactly are you talking about in your post?

The best Bitcoin news I've heard recently is the rise of possibly reputable exchanges with liquid BTC/Gold/USD pairings.  Others have tried it before, but without much success.  I see one of BTC's best uses as being the digital transmission vehicle of gold.  

Bitcoin has an inherent weakness that I refer to, for lack of a better term, as "the time capsule weakness".  Since BTC is backed by nothing, if someone was to theoretically go to sleep for 1, 2, 5, or 10 years, it would be an extremely hard sell to go all in on BTC rather than gold in that regard, or even a 50/50 split.  Most people, in the end, would probably choose 25% BTC at most.

The rise of highly liquid BTC/Gold pairing exchanges would probably do a lot to help stability and make it so people who own BTC don't feel like they have to babysit their computer screens 24 hours a day.

Someone theoretically jumping into a time capsule would still probably cash out to a majority holding of gold first, since you can't risk coming out on the other side with nothing, but their BTC holding percent would probably be higher...or more than zero at least...

As I suspected, you do not a basic understanding of the fundamentals of bitcoin. You are just a trader.

Go into your time capsule and come out in 5 years. Your fiat will have depreciated at least 15-20%. Your gold may or may not be worth more than it is today. My bitcoins will be worth between $5k and $20k+

[zby]

Hmm - if you have never lost a cent on trading - then you are doing it wrong (or maybe you are extremely lucky). But I actually agree with you assessment of the current bitcoin situation - I think we are in a similar place to that after the first bubble in 2011 - it required halving before we got the next one.

[r0ach]

As I suspected, you do not a basic understanding of the fundamentals of bitcoin. You are just a trader.

Go into your time capsule and come out in 5 years. Your fiat will have depreciated at least 15-20%. Your gold may or may not be worth more than it is today. My bitcoins will be worth between $5k and $20k+

That's a ridiculous statement.  Most people see either fiat despair, doom, or complete economic collapse coming.  While those are positive indicators for gold or BTC, people have long used sayings like, "you can't eat gold".  Well, guess what?  It's even harder to try and eat a Bitcoin.  For things like Bitcoin and gold to reach astronomic levels, things like martial law would be coming with it.  Is that an environment suitable for using Bitcoin in?  Probably not?  Gold itself would be sketchy in that environment, and BTC would probably be a joke to try and use.

To really have a future and compete with gold in a monetary collapse, BTC would probably need the US government to kick the can down the road AT LEAST 10 more years for BTC to build up infrastructure.  Meanwhile, many people see monetary collapse as something that could either happen any day in a flash crash, or people like Anonymint claiming 2016 or so.

People with money tend to be older as well, and most of them are probably going to trust gold over BTC if they have to convert their fiat to something else in a flash crash environment.  Being high tech is not necessarily a good attribute when humans right now might be in some sort of delusional gilded age of excess they never return to.

So basically, since you seem extremely bullish on Bitcoin, are you saying you believe the US can kick the can down the road at least 10 more years?  Longer?  Infinitely?  These are the bets you're making when you claim BTC is magically guaranteed to demolish gold.

[okthen]

Hmm - if you have never lost a cent on trading - then you are doing it wrong (or maybe you are extremely lucky). But I actually agree with you assessment of the current bitcoin situation - I think we are in a similar place to that after the first bubble in 2011 - it required halving before we got the next one.

If you never lost a cent trading, you probably don't do it much.
Maybe it's a smart move in itself...

[alexeft]

Hey, I never ever lost a cent on bitcoin but then .... I'm a long term hodler!!!! 

Aaaaaaaaaaaand yes, bitcoin is not an altcoin!!!! 

[abercrombie]

As I suspected, you do not a basic understanding of the fundamentals of bitcoin. You are just a trader.

Go into your time capsule and come out in 5 years. Your fiat will have depreciated at least 15-20%. Your gold may or may not be worth more than it is today. My bitcoins will be worth between $5k and $20k+

Agree.

Well written OP but flawed analysis from a trader's perspective.  The biggest indicator of price movement (Supply & Demand) is not addressed.  I'm betting on demand from the half trillion remmitance market and the $2.4 trillion hedge fund market.  If Bitcoin can penetrate at least 1% in each of these markets, the price will be at least $100k.  I have no regard for active coin development.  The anarchists and libertarians wish for a collapse of the U.S. economy, for which during the 2008 collapse, I lost my job and home so not eager to experience that again.  

Based on charts, all Alt coins thus far have only proven to be Pumps & Dumps.  I'm also an Alt trader but I only use Alts to increase my BTC position.  

To never have lost a cent suggests being a bag holder.  I will dump a position via stop loss if it's downtrending. Some LTC bag holders proudly claim they can't declare a loss if they never sell out of their $40 LTC position.  

[chesthing]

Comparing bitcoin to the alts scene is complete waste of time. There are a small handful of alts that offer something possibly useful in the future and show relatively stable values, the rest (99.9+%) are betting tools. They aren't any more useful to the world than a horse or dog race, or a spin of the rullette wheel.
Bitcoin, on the other hand, is slowly becoming adopted as a means of value transfer. No other altcoin can touch it in this area and most likely never will.
I don't even know why I wasted the keystrokes to type this, if this isn't obvious to you by now my saying it now isn't going to make an impression. 

[TrollinU]

As I suspected, you do not a basic understanding of the fundamentals of bitcoin. You are just a trader.

Go into your time capsule and come out in 5 years. Your fiat will have depreciated at least 15-20%. Your gold may or may not be worth more than it is today. My bitcoins will be worth between $5k and $20k+

Agree.

Well written OP but flawed analysis from a trader's perspective.  The biggest indicator of price movement (Supply & Demand) is not addressed.  I'm betting on demand leading with  the half trillion remmitance market and by traders in the $2.4 trillion hedge fund market.  If Bitcoin can penetrate at least 1% in each of these markets, the price will be at least $100k.  I have no regard for active coin development.  The anarchists and libertarians wish for a collapse of the U.S. economy, for which during the 2008 collapse, I lost my job and home so not eager to experience that again.  

Based on charts, all Alt coins thus far have only proven to be Pumps & Dumps.  I'm also an Alt trader but I only use Alts to increase my BTC position.  

To never have lost a cent suggests being a bag holder.  I will dump a position via stop loss if it's downtrending. Some LTC bag holders proudly claim they can't declare a loss if they never sell out of their $40 LTC position.  

The very same thing is preached in here by many! But when you go from being able to pay a house payment ($1200/BTC) to making a car payment ($339-600/BTC), I'd say that is a loss whether realized or not.

[hellscabane]

I do agree with needing a catalyst, but I think his thoughts on a catalyst along with his assumptions on development is flawed. Developments in infrastructure is just as beneficial (if not more so) than updates to underlying code.

I actually thing the whole media explosion as being the primary catalyst is somewhat of a farce. To me, mainstream media attention actually comes more toward the end of the upswing. But it does provide the useful addition of allowing the "prop" to stay there longer (assuming that the growth is unsustainable).

[r0ach]

To never have lost a cent suggests being a bag holder.

I'm an op in an altcoin channel.  I tell people what I'm doing, people tell me what they're doing, people tell me what other people are doing.  I wouldn't call it front running, but mostly being aware of what the market is doing.  Both BTC and altcoins are confidence games as well.  The second you see any hint of fear in the market you have to pull out.  Doesn't matter if the bad news is real or completely made up.

And as someone said, I do not trade every day just for the sake of trading because that's pointless.  The last time I bought BTC it was under $400 around it's rock bottom price since I was awake at night while it was occuring.  After BTC triple bottomed is when I bought.  The last altcoin trade I made was buying XC at .001.  You can see that trade in the rpietila altcoin observer thread probably.

[DieJohnny]

To never have lost a cent suggests being a bag holder.

I'm an op in an altcoin channel.  I tell people what I'm doing, people tell me what they're doing, people tell me what other people are doing.  I wouldn't call it front running, but mostly being aware of what the market is doing.  Both BTC and altcoins are confidence games as well.  The second you see any hint of fear in the market you have to pull out.  Doesn't matter if the bad news is real or completely made up.

And as someone said, I do not trade every day just for the sake of trading because that's pointless.  The last time I bought BTC it was under $400 around it's rock bottom price since I was awake at night while it was occuring.  After BTC triple bottomed is when I bought.  The last altcoin trade I made was buying XC at .001.  You can see that trade in the rpietila altcoin observer thread probably.

Please tell me your altcoin channel and your next altcoin trade. Thanks!