If you are like me then you went to a party or two this Christmas and had to suffer through a manic conversation with an unsufferable Bitcoin crypto bull. Or maybe you have had to deal with one of these characters on Facebook.
One thing they were doing is boasting about their gains and trying to make you feel stupid for not being in it with them as Bitcoin went up more than the US stock market did and everything else last year for that matter too.
But since it’s peak in December Bitcoin has fallen about as fast as a market can fall and now the Bitcoin bulls are in big trouble.
Bitcoin has had several pullbacks of 30-40% last year and has been able to recover, but a pullback of over 50% from its December highs of 20,000 will put so many people under water on it that it really won’t be able to make a come back, because all of those buyers at the top will turn into overhang selling resistance.
Really I think Bitcoin is dying and if it falls below 9,000 now I’ll be convinced of it.
The best historical comparison with what Bitcoin is doing now is with what silver did way back in 1980 when it had it’s big run that ended.
Take a look.
Silver went straight up and then straight down.
Of course that’s what the famous tulips did back in 1500’s and in the end crypto currencies are more like that mania than the 1970’s silver mania, because they represent nothing but virtual money or as I like to call them crypto crap!
But there is a bigger lesson for us.
And that is to be careful when we own something that is going up fast so that we don’t become full of hubris and arrogance as that leads to big mistakes and makes one look very foolish.
So if you didn’t buy Bitcoin in December when some were saying it was going to a million you look pretty smart now!
BTW – David Skarica just did a podcast about what he thinks about this Bitcoin drop and what happened with all of the markets in 1980. To listen click here.
And to see the news stories this morning that I am following go here.