I can’t help myself. With bitcoin dropping below $30,000 – a key support level – I decided to look back at the commentary that we have written over the past few months.
The most prescient comment apparently came from my wife’s trainer, of all people. Unfortunately, she was a purely contrarian indicator. I published the following on April 19th, quoting my wife, Miriam:
“on Wednesday, my financially illiterate trainer finally heard about Bitcoin and recommend that I should invest in it because she heard was impossible to lose money doing so.” [1]
As a reminder, Wednesday, April 14th was the absolute top for Bitcoin so far. It touched a high of $64,869 before dipping to a $62,384 close. My reason for writing the piece on Monday the 19th was because we saw a stunning drop on Sunday the 18th. The coin touched $51,707 before bouncing back to $56,000. It was a huge percentage move at the time and turned out to be an opportune time for traders to buy the dip. For investors, however, there have been many opportunities to buy dips. Today’s is only the latest in a long line of them.
At this point, with bitcoin trading around $29,700, it is too early to declare that the $30,000 support level is truly broken. An item as volatile as bitcoin can pierce a key support level and fluctuate around it before one can declare the level to be broken. Bitcoin bulls should be hoping this level holds though. There is no obvious support from moving averages (we are over $10,000 below the 200 day), nor are there prior resistance levels that could provide support (as the $30,000 level does) until $20,000. That is considered much weaker support, since the $30,000 level was tested as support early in the up move, while $20,000 was not.
Here is a list of pieces that I have published on Traders’ Insight since the April highs:
I’d Bet Bitcoin Had a Wilder Weekend Than You Did
GBTC – Arbitrage Potential or Just a Bitcoin Worrywart?
I Really Didn’t Want to Write About Bitcoin Again
Tesla and Bitcoin – Elon Musk Channels Jack Welch
Tesla’s Move on Bitcoin and a Potential AML Motivation
Crashing Gradually, Then Suddenly
Gold, ‘Digital Gold’ and Inflation
Does This Look Like a Currency to You?
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[1] For those of you who don’t know the reference to the shoeshine boy, it is said that Joseph Kennedy (father of the future President and a successful speculator) sold all his stocks and went short ahead of the 1929 crash because a shoe shine boy was giving him tips about stocks. One of several references is here.
Disclosure: Interactive Brokers
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Disclosure: Bitcoin Futures
TRADING IN BITCOIN FUTURES IS ESPECIALLY RISKY AND IS ONLY FOR CLIENTS WITH A HIGH RISK TOLERANCE AND THE FINANCIAL ABILITY TO SUSTAIN LOSSES. More information about the risk of trading Bitcoin products can be found on the IBKR website. If you're new to bitcoin, or futures in general, see Introduction to Bitcoin Futures.
