Bitcoin captured the imagination of hundreds of millions of people around the world in 2017 when it rallied to 20,000. It also caught a lot of people’s money as they opened up trading accounts for the very first time and made their first trade in anything to become a part of the action. And after that peak the action turned into a disaster for those that bought and held on. We were told that Bitcoin would act as a safe haven that would go up if the US stock market fell.
But last year when the S&P 500 fell 20% off of its high into the end of the year Bitcoin fell too by falling below what had been a summer support level at 6,000 and collapsed. And while the stock market has rallied since the day after Christmas Bitcoin itself has barely moved up at all.
Now Bitcoin is trading with a support level around 3,200. This 3,200 level is basically what 6,000 was last year. It is a key support level that is bringing in people trying to buy a bottom, but if it breaks later this year it will trigger another price collapse, probably down to below 1,000.
The price action in Bitcoin has been a disaster. The relative strength ratio on the bottom of this chart is the price of Bitcoin divided by the S&P 500. It is trending down to show us that Bitcoin is acting weaker than the stock market.
When the stock market falls Bitcoin crashes and when the stock market rallies Bitcoin barely goes up. Generally speaking, you want to own things outperforming the stock market and not underperforming it in order to beat the market.
Bitcoin is going to go down, because what many people said about it in 2017 turned out not to be true. Bitcoin DOES NOT function as money, because it has massive transaction fees that make it too costly to use as money. It also is too unstable to act as a store of value.
And that is one reason why it is not the safe haven in times of market turmoil many thought it would be. Bitcoin prices also went up in 2017 with the help of
The US stock market is rallying and I believe it is a bear market rally. If I’m right then once the stock market dips back down later this year Bitcoin will crash again. But it doesn’t matter whether or not you agree with me or not that this is a bear market rally for the US stock market as the clear evidence shows us that Bitcoin is a market laggard anyway.
The meants that it’s simply useless and provides no value for an investment account. Those that hold any “coins” are simply investing in worthless virtual currencies and would be best to sell and move that money into something else. Gold
Bitcoin has failed to rally, because all the claims Bitcoin bulls made about it two years ago turned out to be false. It’s going to fall below 3,200 before this year is over and collapse again. As time goes on there will simply be fewer and fewer Bitcoin trades and transactions carried out until it simply vanishes as S&H green stamps did.
Every month that goes by fewer and fewer people talk about Bitcoin. It’s simply slowly dying out.