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Bitcoin Insight

Bitcoin's volatility can cause grief for new Bitcoiners who don't understand it's price swings. You can never find the perfect entry/exit when investing. To find safer entry/exits, you need to understand what you can of it.

Bitcoin isn't your average currency that derives its value based off of a central bank being hawkish or dovish (raising or lowering interest rates). Instead, it derives its price from the market (or the general populace); Supply and Demand.

If there are more buyers of BTC, the price goes up; more sellers, the price goes down. The good news for buyers of BTC is that it is currently in an uptrend. Despite its price swings, if you buy and hold; you will most likely be ok.

So, when to buy Bitcoin? Great question, and I am very glad you asked. Looking at Bitcoins historical price chart over the last year can provide some insight to what could happen.

Historically, when Bitcoin test its ATH (all time high), it is first met with some resistance, and has a pull back. As it continues to test these new ATHs, it experiences some price swings, as emotion enters the market. People fear that the price has peaked and sell. Others feel it hasn't so they buy. Once there is some reasonable support, it usually resumes its ascent.

So, Bitcoin surges past its last ATH by 100%. The market reacts by people taking profits. Traders, miners (who need to sell their coins to earn profit), and some investors all sell for a nice profit. This turns Bitcoin into a blood bath, but Bitcoin has always found support.

The current state of Bitcoin is that it recently hit an ATH (all time high) of $4,500, experienced a sell off, and has recovered slightly. It has found support around the $4,000. This ATH was about a 50% increase to its last ATH of $3,200 The recent run wasn't a run of Bitcoin.

Using history as a guide, Bitcoin has recovered, seems to have found a trading range, and could have higher to climb.  Or it might break down, and crash to zero.

Current consumer sentiment around Bitcoin is that it is going to $5,000 in the near future.

Ethereum is also approaching its ATH of $380, currently trading around $365. Monero (XMR) has surged recently by as much as 50%.

Chart from Bitcoincharts.com (link here)

*hint 1: if you have recently bought at an ATH don't panic, BTC will most likely recapture its losses unless unless there is some sort of government intervention.

*hint 2: don't sell the dip, buy the dip.

**BTC = Bitcoin
**Price references are in United States Dollars

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