In stock trading, we often refer to the "January Effect" as something bullish (stock will go higher). In this perticular case I am referring to it as something that might be recurring. As I was looking at the Bitcoin Charts today, something interesting caught my eye.
Bitcoin Chart (Late December 2016 - Mid January, 2017)
The timeframe in the purple bubble is from 27th December, 2016 to 17th of January 2017. As you can see on the chart, the shart selling began on the 5th of January and the selling stopped on 11th of January.
Chart 1, Source - TradingView
Bitcoin Chart ( Late December 2017 - Mid January, 2018)
As you can see from the second chart, from today, there are two scenarios that are likely.
Scenario 1
Referring to the chart 2, the yellow bubble
We already had the 30+ % drop ( During the December Holidays, 2017) and todays selling is only a reaction to the fact, that we couldn't break the resistance. I spoke about this resistance level in the last update for bitcoin, make sure you check it here.
Scenario 2
Referring to chart 1, the purple bubble
We are yet to experience tha same as we did in January, 2017 and there is yet another 30% correction ahead of us. If this is the case, we are going to re-test the 12,000$ level. For this to happen, we have to see far greater volume on the exchanges, today Volume picked up a bit, but not enough.
Conclusion
Whatever the case may be, it is extremely interesting that something similar occurred around the same time. I will definitely keep a close eye on the price action. The main question for a lot of us is - how will this affect the altcoins ? For me this is the main question, as my holdings are primarily in Alts - In my opinion you have to be very careful. Of course, all this can be some minor profit taking, after the monster rally we saw.
While I still think Bitcoin is the gateway to cryptocurrency exchanges, is it too late to invest because the value peaked at $19,000 in 2017? I suppose the gap between January 5th and the 11th would be a good time to buy Bitcoin and hold it until the value rises again. Then, you can purchase a greater number of altcoins. Of course, this depends on changes in the currency exchange ratio between Bitcoin and the alt cryptos.
The trend is that when BTC goes down ALTs also tend to go down. So you wouldn't benefit greatly from this strategy. Altough it might be a good idea, because after the crash BTC always recovers.
That's awesome and insightful comparison! you are giving valuable tips and ideas. What price of BTC would be in middle of this year? I mean Jun & July. May be around $22,000 ?
Upvoted and resteemed!