With bitcoin plummeting and the market plummeting with it, I get asked the same question frequently: is it time to get out?
That is a tough question to answer
Bitcoins all time high price was right around $20,000 but the price recently fell to right around $5700. That is a 71.5% decrease in price in 6 months. To most people that is an unheard-of decrease, but in cryptocurrency a decrease like that is healthy for the market.
What I mean by that is, bitcoins growth would be unnatural if it grew only up. Throughout the growth there must be dips and crashes, it’s healthy for the market as a whole. The stock market goes through similar cycles without the volatility.
That now brings me back to my original topic, is it time to get out? In all honesty, if you watched bitcoin drop from $20,000 to $15,000 to $10,000 to $5700 and you didn’t sell, now wouldn’t be the best time to get out. The best time to get out was months ago, and that’s easy to say in hindsight but it’s true. At the end of the day only you can make the decision to get out. If you believe that cryptocurrency will be around for a long time then it wouldn’t make sense to sell if you’re already down 71.5% from all-time high. The market will start growing again, but it may take months and in an extreme case maybe even years. While the price is down take time to educate yourself so the same mistakes don’t happen again.
My current outlook on bitcoin for the coming weeks:
Bitcoin is in an obvious downtrend (bear trend) because it is making lower lows. Now that leaves the question at what price will bitcoin continue to uptrend again. No one knows the answer exactly but we can use this graph to give us some clues.
The graph above is bitcoins weekly chart (each candle stick represents a week of price action). The blue box is where I think bitcoins price will fall to before we see an uptrend. The blue box is the price region from $5300-$5800. I think that is a good reversal area because there is significant support there. I will be buying within the blue box and keeping a close eye on the price because if it drops lower than the blue box we will see a free fall into the $3000s. The exact bottom for bitcoin is always impossible to predict so the best thing to do is have a plan for multiple scenarios.
The price of bitcoin can't keep falling forever, if history repeats itself we will see huge percentage increases from bitcoin again, it's just a matter of when.