Sell The Dead Cat Bounce II
In this update, I want to follow up on the previous update of Bitcoin “Sell The Dead Cat Bounce” in which I explained that we could see a bounce up after the drop from 20k to 11k. And that bounce could be an opportunity to decrease long exposure or even add to overweight shorts.
In today’s update, I want to share where we are now and if the patterns keep aligning, what we could/should expect for the next couple of days/weeks/months.
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Bitcoin vs Silver Parabolic Pattern
This was my commentary from the last Bitcoin update:
The left side of the chart is the weekly chart of Silver during 2006-2012, and the right side is Bitcoin, since the start of 2017. So far, the patterns play out almost identical.
Number 10 was the $11k low, BTC bounced up,, sold off and formed a higher low.
Now, if the pattern keeps aligning, then we could expect a run up into nr. 11: $16-$18k area. That seems like a nice opportunity to look for sell opportunities as the downside target for nr. 12 is at $10k = a 47% potential drop.
Longer term, as in after nr. 14, I will overweight cryptos again, to a max of 25% of assets. For now, I feel comfortable with a reduced crypto exposure (5% of total assets).
Short term, based on this pattern, I expect a Lower High for nr. 11, a dead cat bounce?
And this is how it played out:
Bitcoin touched the 16.500 area and reversed trend, so to me it looks like nr. 11 is formed and we could expect the formation of nr. 12: a retest of the $10.000 area.
Target path for the next couple of months:
nr. 12: $10.000
nr. 13: $13.000
nr. 14: $ 8.000
nr. 15: $9.000
nr. 16: $5.000
Bitcoin Monthly Chart & 2018 Targets
The Monthly Pattern (log scale) warns for a drop of 75%, green parabolic pattern is next.
After a 75% drop (if it ever happens, never a 100% guarantee) the pattern says up up up into at least $90.000. So over the next couple of months, I will look for opportunities to get back in overweight long cryptos, for the long term portfolio and possibly another massive surge up into year end and 2019.
Total Portfolio Strategy 2018
If you want to read more about my Total Investment Strategy, then please read this update first: 2017 Performance and Total Portfolio.
Or read my latest update on the US Markets: Dow Jones Industrial, Party Like It’s 1987!
This is what I will do over the next couple of weeks/months:
- I will add monthly to a mutual fund (worldwide stocks), as I expect stocks to skyrocket into the year 2030, peak of flight to private assets;
- I will add 2% of my assets to buy put spreads AEX Dec 2018, as a hedge for my equity exposure, medium term trade (12-24 months, 2018-2019);
- I will add 7% of my assets to to my 2018-2019 eToro hedge strategy: – Hedge US Stock Market for a 20%-40% crash
- I will contribute small amounts to interesting ICO’s and tokens that pay out a periodic cash flow;
- I decreased my crypto exposure from 20% of total assets to 4% of total assets;
- I will add to my short sovereign bond strategy (rising interest rates) when rates come down a bit into 2018.
Crypto Rating Desk and our ICO Portfolio of 100
ps. I started a new project, for and by my international students.
We analyze upcoming ICO’s and when we see a project that we like, we contribute. Our latest contribution is LHCrypto, a token that pays out a monthly cash flow, has a working business model and is active in a growth market.
We now have 14 contributions, and our goal is to build a portfolio of 100 tokens that generates a periodic cash flow (Portfolio of 100).
Feel free to follow our ideas: CryptoRatingDesk.com