Today’s video is about the crypto crash or the Bitcoin crash. Marcello is not particularly lean towards Cryptocurrency investments. He prefers stocks, mining stocks, silver, and other assets, but he acknowledges that cryptos, like any other investment, might lead to big gains. There has been some question lately. Why isn’t Bitcoin recovering? Why isn’t it going up as fast as before? and some other things that we should probably look for when talking about Bitcoin and Cryptos.
Using the TradingView platform, Marcello talks about the oscillation of Bitcoin prices through time and recalls that without using indicators you can achieve a good technical understanding of the market just by reading price. Every market has its own personality, and Bitcoin is not far from that. Marcello shows some patterns on the chart and teaches us how to identify those. Then he zooms in into the latest crash and identifies that the fall in prices happened very close in time to when it was rumored that the US government was going to investigate Binance, one of the largest crypto “brokers” in the world. This is important because it looked like the first time that the market responded to that kind of situation.
This is the risk of investing. No matter what you invest in, there’s always a risk involved. Marcello says that for him, one of the risks that are involved in investing in Bitcoin is regulation. The largest retracement of Bitcoin was in 2013-2016 when China banned Bitcoin (-86.9%). If the recent fall happened just over a rumor of regulation, imagine what could happen if the US did something on Bitcoin. Cryptos will still go up and down like any other asset but take into account what happened over a rumor. Volatility is another risk.
Then we have Elon Musk, the man of the hour. He started to get involved in Cryptos. Tesla sold some of its position and made billions of dollars, and then, out of a sudden, to not do Bitcoin anymore. That gave more impulse to the downside of the Bitcoin price. This doesn’t mean that Bitcoin won’t go up anymore. This kind of retracement is part of its normal movement. It took the market about 3 years to recover after each crash.
So with more potential regulations and investigations coming, and the appearance of other digital currencies (including the ones coming from central banks) a rising competence to Bitcoin and other Cryptos is on its way. Bitcoin, as it is decentralized, plays against the big ones who don’t want to lose their power in the financial system. This doesn’t mean that Bitcoin is going to go away. It can still be a financial asset, but it has a rough way ahead.