Bitcoin just had a brutal sell off, will it continue to go down? That is the question that everybody is asking, I personally am always looking for a buying opportunity and this in my opinion a great chance to load up on some Bitcoin, Ethereum and XRP (Ripple).
Now, be take note that $BTC is not as cheap as it may appear, if you take a look at the chart you’ll see that from March 2020 until now it has continue to go up until now, in March Bitcoin was selling for a little under $4,000 dollars and now you are going to be paying around $10.400 dollars.
Dollar cost averaging is the best strategy, if you bought any Cryptocurrency and the price drops, buy more on the way, down,m there are daily small dips that provide all investors with the opportunity to buy at a discount.
What triggered the Bitcoin Selloff?
There are many factors that affect the prices of Cryptocurrency, in general fears are affecting markets all over the world and a lot of people are moving to cash to protect themselves in the even of a worsening pandemic, this is a valid reason to maintain a cash position and I highly encourage anyone to have an emergency fund and savings in the event that you were to lose your job, Stocks and Bitcoin are assets that you want to hold however if you need liquidity it never hurts to have a cash position.
Are you buying more Bitcoin, Holding or Selling?
I am personally buying more Bitcoin on every chance that I can, as prices move up and down I wait until I see a buying opportunity like this recent one and then I buy, my plan is to stay invested in Bitcoin for a long time which could potentially be years, I do plan at a certain point to stop buying and just hold, specially if it appreciates a lot however for the short term I do plan on buying more.
Bitcoin just got a discount, are you ready to buy more?
Not only do I plan on buying more Bitcoin but I have also been investing in Altcoins, I honestly have never really understood why some people think that BTC is the only investment you should have, I prefer to have a diversified portfolio that includes other Altcoins like Dogecoin, XRP and Zcash. I do have to say that the majority of my investment went to $BTC however I do continue to add Alts to my position.
There might be more brutal days for the cryptocurrency as well as the equity markets, unfortunately Bitcoin and the rest of the altcoins do have a close relationship with the stock markets and when it sells off, it affects crypto in general.
Multiple catalyst triggered the September sell off and could possibly continue through October.
As of today, the price of $BTC is around $10,400 dollars which is a low from it last high of $12,000 dollars.
Bitcoin is the leading form of Cryptocurrency and it has been down around 8% from the peak of the sell off, altcoins were also affected .
So why did Bitcoin go down today? Unfortunately correlation with the stock market affects the value of bitcoin as you can see from the S&P 500 chart the correlation has been strong.
Other equity markets around the world has affected the value of all of these assets, also COVID fears all over the world and the US government not approving any stimulus package has triggered uncertainty all over the markets.
Potential lock downs have also created the sell off in the world markets and the dollar index has spiked up as more people move back to the safety of cash.
Gold and Silver also saw some losses as precious metals have started a downtrend, now as inflation increases the prices of metals might go back up in the future, in the short term though it is looking like some of these assets will continue to downtrend.
Is Bitcoin a Bubble and did it just burst?
Any asset may have a period where it is considered “overbought” or overvalued, this happens all the time in the equities markets, Forex and other global markets. When a lot of investors decide to purchase a stake in a company or something that is considered valuable it could potentially become a bubble, in this case I do not consider it to be a bubble since there have been many corrections through out the years, when a valuable asset appreciates 50% or 100% in a few months there is always the risk that it will crash, however this is not the case with Bitcoin and I do consider that there will be more volatility which will provide slow and steady growth.
Cryptocurrency and the US Elections
Another factor to consider are the US Elections as there is uncertainty on who will be the new president of the United States, for the most part the stock markets will be affected until a new president is elected.
If you are a Bitcoin investor and looking to accumulate more crypto this is a good buying opportunity, just remember to average cost down and do not invest your entire amount all at once.
Let’s look at the Bitcoin chart and see what the current direction is, based on the chart we’ll determine if we are on a bullish trend or a bearish trend.
Panic selling is never a good option especially when you are selling at a loss, when investing in cryptocurrency you have to have a long term mindset and this is a great opportunity to buy at a discount, always manage your risk.
Note that this is not investment advice, always do your own research and consult with a professional financial advisor, these are our personal opinions and this information is for learning purposes only.
Bitcoin and the Stock Market
If you follow the market you may have noticed just how close and how similar they move, both markets are cyclical and different forces move the prices up, down and sideways on the daily basis. I do not necessarily consider Crypto a hedge against the stock market, to me it is another form of investment that will continue to appreciate over the years, just like stocks, if the asset has value and provides something beneficial to the public then the prices will go up, this is why I do not worry about either of and I continue to dollar cost average my position as needed.
Cryptocurrency markets are cyclical and a good strategy is to always take profits when the markets pump and average up or down as needed, most people will only buy when markets move up and sell when markets move down which is the opposite of what you want to do, always buy the dip and sell the top.