Daily crypto update - $4k Bitcoin (13th Aug '17)

Bitcoin reached the $4k milestone yesterday, and while it naturally rebounded down as targets were hit, it quickly recovered and has so far held above $4k. I expect a few battles to hold onto the price, but if it does, then I expect a quick move up to $5k where the real battle and fun will begin.

Bitcoin's performance is fundamental to the performance of the whole market, and there is a regular pattern that when Bitcoin makes a significant move, alt coins drop. You can see this with the charts yesterday and this morning. Also, when Bitcoin has made a gain and then moves sideways you tend to find this is a good opportunity to invest in alts.

Trading is an emotional experience, and I feel most emotionally comfortable when the market has topped out or a correction has bottomed out. It is when the market is rallying which I struggle with most:

  • When to come out of trades
  • Which new trades to make
  • When to take money off the table
  • How to prepare for a correction 

Timing is everything and timing the top and bottom is hard. There is an old investment saying be fearful when others are greedy and be greedy when others are fearful. I think it was Warren Buffet who said it.

Right now I am fearful.

The market is rallying, I should be happy, I am really but I am cautious too. 

Crypto markets rarely trade sideways, either everything is great, and we are making solid gains, or the market is crashing, and everything is shit.

My portfolio is choppy today, making multiple £thousand's jumps up and down in a matter of minutes. I see wildly fluctuating prices with many of my alts. As I record my figures each day, I am putting in big jumps and drops across the board. Most big rises are followed by a trace back, especially with smaller alts. Where Cofound.it jumped very over 100% from $0.12 to $0.27 it quickly retraced back to $0.17, similar moves happened with Komodo and Swarm City.

NEO is also setting new all time highs. My call to sell on the way up has been proven wrong twice now. Still, I have a position in the market and I am benefiting from the new jumps. It is easy to beat myself up about this, but my portfolio has jumped 40% in August alone. You win some; you lose some.

I have experienced 11 straight green days but today is red, only slightly, a drop of 0.3%. Not much but the momentum feels sideways as the prices are battling. I expect in the short term we may be running a little bit out of steam. What I hope is that Bitcoin holds above $4k, but trade sideways for a while and allows alts to make gains.

I am though emotionally preparing for a correction and looking for the signals. I talked about this in yesterdays daily update:

There were three very big sudden market crashes in the build up to the June/July correction:

- On May 20th my portfolio crashed 32.2% then to recover and make new highs.
- On June 15th my portfolio crashed 16.5% to recover and make new highs.
- On June 27th my portfolio crashed 21.3% to recover and make new highs.

What followed this was plenty of up and down days as we were entering a correction.

If I start to see sudden drops then I will start moving money out of the market into Fiat. If my timing is wrong so be it. I would emotionally prefer to have taken profit of the table and missed gains than the opposite.

Right now I am waiting for the month to finish to get a good feel for where we are at but I am keen on a smaller, tighter portfolio and an increase in my Bitcoin position. That said if the market continues to accelerate we might run into another correction like June/July and I want to be prepared. You tend to find, both with individual coins and the market as a whole, the faster we move up the bigger the crash.

One of the downsides of a large portfolio is that it takes time to liquidate trades, especially when you are not holding on the exchanges.

The only trades I am considering is a long position on both OMG and TenX, two I missed but I really want within my portfolio. This might mean some short term pain, we will just have to see.

Back to Bitcoin, there is a story developing of price manipulation by an individual, a group or even an exchange manipulating the price of Bitcoin known as Spoofy. If this is true, and the evidence suggests it is, then we are potentially at a significant risk. If there is an ability to manipulate the market as the stories are suggested then they could easily build up short positions and bring the price down. 

All traders need to be aware of this, you can read about Spoofy below:

Meet ‘Spoofy’. How a Single entity dominates the price of Bitcoin.