Market volatility

The market is super volatile at the moment, I am expecting this to continue, so hold on, this could be a bumpy ride.

So what is happening, well a number of things:

  1. The market is talking itself into a bubble, Reddit, news sites etc... 
  2. Bitcoin has scaling issues.
  3. Ethereum is challenging Bitcoin's market leader position.

So my gut feel with what is happening is as follows:

  1. Heavy Bitcoin investors are getting nervous, firstly about scaling and the impending August 1st User-Activated Soft Fork. This could split the chain and cause all kinds of issues. I think some Bitcoin investors are getting out.
  2. Some Bitcoin investors fear they will miss the Ethereum boat and are flipping their investments.
  3. Some people are cashing out, maybe to protect some investments, but others are probably cashing in as they have made life changing money.

The growth of Ethereum is a short term market threat. While if you hold a large Ethereum position the price growth is great, the volatility can drive the price of other coins all over the place.

My view is that Ethereum will take Bitcoin in the next month, this will cause a market crash. Bitcoin will drop and this will cause others altcoins to drop.

The Bitcoin soft fork will activate on August 1st but I think it will ultimately fail. This will lead to a price drop followed by a price rally. During this time Bitcoin's position will be behind Ethereum and the scaling issues will fail to solve.

I think Bitcoin will stagnate or drop some but I don't think it will catch Ethereum, I then expect Ethereum to rally further.

I also see this as an opportunity for Dash, Monero and Litecoin, who I think will all see growth from people hedging against the Bitcoin issues.

What am I doing about this? I am continuing to take money off the table, I am close to 15% so far and am targeting 25%. If the market panics and crashes I will accept that and hold out as best possible. I will not panic sell my coins at a low rate. I will also look to use the money I have cashed out to reenter the market where the opportunities present themselves.

Be careful, the market is volatile. I do not think this is a good time to enter.