The Crytpo Crash

by JDH on April 24, 2021

Last week I asked: Has Bitcoin Topped?  In the short term the answer, apparently, was yes.  After hitting almost $65,000 on April 14, Bitcoin has “corrected”, trading as low as $47,400 last night, for a 27% drop in 9 days.

Is this the end of Bitcoin?  I doubt it.  30% correction is very common, and this latest correction likely sets Bitcoin up for a sustained rise later in the spring and summer.  The cycle top is likely not going to arrive until the fall or winter of this year, or perhaps next year.

To put this into context, Bitcoin is still up 71% on the year, and Bitcoin is now back into the range it traded between February 22 through March 6.

So, in the grand scheme of things, it’s no big deal.

Ethereum, the second-largest crypto by market cap, is up around 3% on the week.

So, no biggy.

A Bitcoin drop to $40,000 would put it back to long term support levels, so it’s very possible that there is more pain to come in the short term.

My attitude?  So what.  I’m not significantly invested in crypto.  I haven’t bet my life on it.  I don’t buy any of it on margin.  I can wait for the recovery.

The good news is that as the government continues to print money, the stock market is holding up relatively well.  Yes, I know that President Biden announced higher capital gains taxes, but that will take a while to get through the Senate, and it will be watered down by the time it happens, so I don’t see that as an imminent threat.  And, if it happens, that will be a good excuse for everyone to move their money into crypto, in cold storage, where it is harder for the feds to track.

So, stay the course, and see what happens.

Thanks, and have a great week.