We are witnessing an exponential trend not seen since the heyday of the dot.com frenzy of the late 1990s. Friends of mine have already become very wealthy buying bitcoin over the past 12-18 months. While they have gotten rich, the more toe-the-line investment community, including heralded analysts, are being blinded by left behind thinking, more inside than outside the box. Nine out of ten articles now addressing bitcoin use the word "bubble" to describe the phenomenon.
When someone spews or implies, "I know a bubble when I see one," you can bet there is no bubble. A half of century of trading has taught me that although bubbles happen, they are not correctly identified until well past their zeniths. Remember this inexorable truth as every precipitous drop in the price of bitcoin is soon followed by dramatic new highs. This past few days we have seen biotin drop from $19,000 to below $14,000 in three days, a 25% drop and by the time you read this it could be even lower. This is good news, whether you own bitcoin or not. The weak hands are scared and selling, the strong hands are holding and waiting for the selling swarm to subside. The next leg up will be a doozy. Note the prediction below, I am not saying bitcoin is going to new highs, but I am saying that after this one (of many) bloodbaths in the price of bitcoin, if it recovers all that is being lost, there will be a global deep-pocketed stampede into this sector. IF bitcoin comes back, IF bitcoin comes back, heed the prediction below:
Prediction
With the advent of futures trading next week, any new bitcoin high above $20,000 will trigger a new leg up in price that will leave the financial world breathless. New highs will beget new highs, relentlessly, until the word "bubble" disappears from pundits' vernacular.
It is then, and only then, that the bitcoin top will finally come into view.
THE KEY UNDERLYING THEORY BEHIND TREND FOLLOWING
What goes UP, continues to go UP, until it doesn't. I don't care what a blockchain is, or the irrelevant premium between the price of GBTC vs. the price of bitcoin. We at Blue Line Trading have a proven stop algorithm based upon the principle that price is all that matters and if bitcoin drops far enough (subscribers know where) we are out. If it resumes its uptrend, we are back in and at a price that we will post ahead of time. See the trading table below, whenever we were stopped out and on the sidelines, we were not there for very long.
This could be the trading opportunity of a lifetime. There are some hidden and very deep pockets all over the world who are buying bitcoin. The bitcoin (GBTC) trade has risk, but it also has reward and the former pales in comparison to the latter.
This IS a big deal and if the beginning of bitcoin futures next week sends bitcoin up over $20,000, jump in with both hands, something even bigger is coming.
Disclosure: I own both bitcoin and GBTC and continue to buy both. Our model portfolio (and hopefully our subscribers who are following it) have been Long GBTC through our Bitcoin Trading System since February 2017.