Bitcoin, Ethereum And The FTX Collapse
There is only one call right now and it is, “Where is the bottom of the crypto crash?”
This can almost be condensed to, “Is the FTX collapse the last major event in the crypto crash?”
If the answer is no then down we go. If the answer is yes then perhaps the bottom is in.
Here is the chart:
I’ve been predicting this on Forbes for a very long time but is it now over.
Firstly bottoms normally have a moment called “capitulation” when the bid side disappears and the price vaporizes. This low is only there for moments—perhaps not even hours—but it defines the low forever. I do not think we have yet had such an event. It’s not compulsory to have a moment of capitulation but it is very common in such an end game.
Another point to bear in mind is that unlike the stock market there is no one to save crypto, no plunge protection team or huge institution to be buyer of last resort like for bonds. If crypto cracks there will be nothing to catch it, only real investors to buy the aftermath.
Then there is this chart I drew recently on Forbes:
This apparently repeating pattern has a period of decelerating fall before the bottom.
To me there is more aftermath to come and a long repair, so while perhaps for the brave now is the time to start dollar cost averaging, I am not going to.
The centralizers of crypto are going to suffer from the consequences of their clever tricks and it’s going to weigh heavily on the price of crypto.
Then the cycle will reverse and up the survivors will go. There is plenty of time for that part of the cycle to play out.
I am focusing on two ideas:
- Not your keys, not your crypto.
- What stocks should I have bought in 2002, because this is where we are going in crypto.
You should focus on 1. Now and then shift to 2 once you are safe.
There is never too much haste to get safe and there is always plenty of time to buy the bottom, so don’t get your move order back to front.