Well, we currently could be in the eye of the storm. Sharp rallies can occur in bear markets such as the one we have soon recently. I remember this phenomenon in 2008 when I was relatively new to markets.
You start to think everything is ok after seeing a 20% rise then wham, the market lets go again.
As a result, on the chart I've envisaged the bear case:
Could we go lower, absolutely. Many are looking at trend line resistance around the US$8k mark. Which given we're already down to US$11k (having dipped under 10) that's not far-fetched.
Like many, if it drops to that level I will be buying more. That level would give Bitcoin not much more than US$100b market cap.
Personally I think that's too pessimistic.
For example, the US' public debt is around US$20 trillion, so Bitcoin would be pricing as 1/200th of one country's public debt. That hardly sounds like a massive global bubble to me, despite what the fake news mainstream media tries to put out.
There's been an interesting theory (I hate saying conspiracy theory as it automatically discredits something) that Bitcoin may have been pumped by instos pre-futures market. They then placed shorts on futures and offloaded their Bitcoin to crash the market and cash in on their short.
I think that makes some sense. However, the strategy only works so long as the little people freak out and sell. Otherwise, they will crash the market and BTC will just go into the hands of HODLers at lower prices who will refuse to sell.
Personally I have invested a small sum around US$11k (I missed the bottom by the time the money was wired into my account). I have two more buy orders set, one around the previous low and then I'll put in the remaining capital should we hit that 8.5 mark. That's how I'm playing it.
In times like these, it's important to manage your position size, that's why I'm not going nuts buying. You need to be able to ride out excruciating pain or you will fall victim to these games. If you put too much of your networth in, you're more likely to panic sell. That's why I cringe when I see people selling their house to buy crypto or borrowing on credit cards, you're playing Russian roulette.
Hit the like button if you found this message worthy - share the love, it's been a rough week ;-)