Bitcoin fell a bit Friday as we continue to see the US dollar strengthen overall. This will continue to work against the value of Bitcoin, as it is highly susceptible to greenback pressure. After all, it is priced in those very same dollars, and we are in a situation where risk appetite is without a doubt poor, to say the least. In this scenario, it’s difficult to imagine why people would want to jump into Bitcoin or any other crypto and take advantage of “value”, when they are more likely than not going to be offered “more value” sooner rather than later.
The $28,000 level underneath being broken to the downside opens up the possibility of a move down to the $25,000 level. If we break down below there then it’s likely that we could challenge the $20,000 level. When you look at the longer-term chart, we have broken down significantly, and at this point in time we are just below what had been massive support previously. If we break down from here and continue to see a lot of negativity in the crypto markets, we could see Bitcoin going all the way down to $12,000, making it a complete “round-trip” from the most recent bullish market.
I get a lot of flak online about my thoughts on crypto, but the last time crypto acted like this, Bitcoin fell all the way down to $3000 and was essentially forgotten about for a couple of years. I do believe that we are getting dangerously close to something like that happening. Yes, Bitcoin will probably fare better this time, but still, it’s obvious to me that there has been far too much in the way of frothy behavior in the crypto markets.
I expect to see a lot of the smaller coins completely disappear in the next year or two. Some of the great projects will get eviscerated because there are far too many projects out there trying to solve the same problem. Crypto seems to be a bit of a solution looking for a problem, and there’s been almost no adoption. Bitcoin has the best chance, but that’s only because so much institutional money had jumped into the market. Whether or not it’s actually used in the real world will be a completely different conversation, but what I do know is that it’s pretty rare to see somebody use crypto for payments.
