May 19, I dedicated an article to Cryptocurrencies (read here) and that in my view, it was going 2 fast 2 furious, showing much resemblance with the price pattern of tulips during the 17th century. In the meantime, Bitcoin (and all other cryptocurrencies) reached Higher Highs and Bitcoin touched $2800, following a hyperbolic price move up.
I closed 50% of my investment in Cryptocurrencies on the way up, hedged the remaining position when it reached $2600-$2800 and closed that hedge for a nice profit on the way down. Now, I have 50% of the original position left and I’m waiting for new opportunities to add long positions, either in the 2100 area or the $1500-$1700 area.
The last two days price dropped by $700, -25% in a couple of days, a drop that I was expecting and anticipated. Clearly Bitcoin is not an investment category for the emotional investor or the faint hearted. I added long positions BTC @2110.
Do you want to start Trading Cryptocurrencies but don’t know where to start? Then this might help.
Basically, the two methods that I use are:
Electronic Wallet @ Cryptonator – Easy to use and makes it possible to switch between currencies with the click of a mouse.
eToro – Trade CFD’s. I use eToro to hedge my “real” coins whenever I see fit.
Now, let’s take a closer look at the 4h chart of Bitcoin
Bitcoin 4h Chart
As you can see in the chart below, Bitcoin reached a price of $2800 after which the break down started.
After two fails to close back above the (red) hyperbolic pattern, Bitcoin continued the way down and currently found support at the $2100 area.
If $2100 does not provide support, then the next stop could be the $1500-$1700 area, another double digit drop.
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