It's interesting to watch CNBC wrap their minds around Bitcoin.
In this segment, Tom Lee argues (or I guess, entertains the possibility) that Bitcoin's price correlates to emerging markets.
I don't really even understand the Xs and Os of it (hedge funds and "risk on"/"risk off" and all that), so I don't know how to respond to his specific reasoning.
But no.
Just.. no. Bitcoin doesn't correlate with emerging stock markets, or really with anything.
Bitcoin's past bubbles all rhyme with themselves in basically the exact same pattern, and if you go back and look, I doubt you'll find that the emerging markets are doing the same things that you indicate here at all the points where you'd need them to.
When I walked outside today, a blue car drove by. But one time isn't indication of a real correlation. It can be a coincidence that the charts worked out like that this one time.
I enjoy watching CNBC and don't see any bad motive behind their reporting or anything. I think what happens is it's tempting to try to understand Bitcoin by relating it to other things you're familiar with.
But then you end up with kind of like a cartoonish analysis of it.
The predominant thing that drives Bitcoin's price, I think, is just market psychology of how human beings discover and wrestle over what Bitcoin is.
The movements are internal to Bitcoin and its discovery process.
(And right now the predominant thing is that after it spikes 20x, there's a ton of momentum driving it to reconvene with its longer term growth rate.)
As for the question in their graphic...
NO.
No!
I mean.. eventually, yes.
But you wait.
There's no way to predict it or see it coming, other than basically it's been enough time.
Once it floors, like you realize it's been a solid year or two of trading sideways, that seems like a decent reason to intuit that the next bull run could potentially be near.
(So basically, once people are bored and have exhausted their credibility of calling for breakouts is probably around the time where there can be a breakout.)
By my count Bitcoin has had 4 major bubbles (to $30, to $250, to $1200, and to $20K), and, summoning my epic mspaint skills, they all look remarkably like this:
That's the only chart you need.
Wait until it's like that, and then you can start thinking about it being bullish.
(Arguably you can say it already looks like that, but that's because my painting doesn't do justice to how long you need the floor to extend for.)
We're only 8 months removed from the spike, so a recovery now would be unprecedentedly fast. Usually it's more like 2-3 years. So my instinct is more like year 2020 rather than any day now.
And, like I've said before, the price needs to get disturbingly low.
Typically it touches down in the ballpark of its old floor (like maybe double or so of its old floor). Which in this case would mean you could expect it to get as low as like $1500-3000, depending what exactly we consider the old floor to be.
Or I guess like 10-20% of its spike would be another data point to use. Somewhere in the $2000-3000s makes a lot of sense by either metric.
Now, if I didn't have any Bitcoin, I'd probably just want some now. Ending up with none is worse than not timing it perfectly. But I'd be really surprised if it didn't go plenty lower before settling, at least in the vicinity of $4K. Maybe more like $2K or under.
Averaging in would probably be a solid strategy -- maybe even wait a few months or whenever it takes a dip, and then start.
The space seems flooded with people calling for spikes and breakouts, seemingly at random. (So I'm not just ragging on Tom Lee and CNBC here.) I just happen to think it's not very helpful to people to keep hearing noise about breakouts.
And it doesn't do Bitcoin any favors to lure in people who are attracted to price movements and a quick buck.
It's not that I think Bitcoin has to rhyme with its historical tendencies, but it seems like the best foundation to forecast your thoughts from. Like if the sun comes up 4 days in a row, that seems like a good starting point of what's likely for tomorrow. And guessing something different without too much of a reason for it would just be mysticism.