On 4/24/2018 I wrote about Bitcoin going up to $12,400 and I still stand by that as long as it doesn’t drop below $6,800.  But even if price does then I am prepared to buy more.   https://evancarthey.com/prediction-bitcoin-is-going-up-to-12400/.  If it does then the target will drop depending on how much price goes below $6,800.  But this guide to making money trading bitcoin hopes price continues to go lower.

I just started trading Bitcoin last month and the setup it has now is one you can get in on at an even better price than when I started.  Right now I am using Coinbase but I am hoping Robinhood opens up access for me.  This way I won’t have to incur trading fees.  That is a big reason why I am a huge fan of Robinhood.

Speaking of Robinhood if you haven’t used them but are thinking to then please consider using my referral link when you do sign up: http://share.robinhood.com/evanc203. 

This way each of us will receive a free share of a random stock if you sign up through my referral link.

My Robinhood Review:  https://evancarthey.com/review-robinhood-trading-service-with-no-fees-part-1/

How Low Will Bitcoin Go?

After the 161% Fib extensions there is the 200% around $4,400.  I don’ t use it to trade off of but that is the next one a lot of people use.  Now I have no idea if it will reach that area or go even lower than that which it very well could.  That isn’t how I trade.  I identify when a trade is extremely oversold or overbought and has not had a 50% Fibonacci retracement reached.  I then get in where it looks like the trend has been broken.   Sometimes the move continues to move against me after I have entered but that isn’t a big deal.  It gives me another opportunity to get in at an even better price if the trade continues moving against me.

Here you can see the magenta line is the trend line.  It has already been broken and price is just rolling around.

For this trade it won’t be a quick 1-2 day trade.  It looks like it could take weeks or even months.  But do not lose heart!  This gives you even more of an opportunity to make a very profitable return.  Price has already broken out of the downward trend as you can see from the chart above.  It did make a move up to the 38% Fib retracement but never hit the 50%.  Until it hits the 50% or comes very close to it the long trade is still in play.  That is the reason I am already purchasing Bitcoin and will continue to do so as price moves lower.

Key Point

The key point to keep in mind when trading anything is to not panic.  Especially as price moves lower.  That is why I encourage everyone to create their own system.  I do not believe you can copy someone else’s system/alerts/trading style and expect to be profitable long term.  The reason why is trading is a reflection of who you are.  If you are blindly following someone then you will never fully trust the trades you make because it isn’t something you created.  You have to be the creator in order to fully trust and accept the trades you make.

You can learn from other traders (although almost all of them are not profitable trading) and how they trade.  But you should not expect to be able to copy their trading style and become profitable long term.  You need to test what you like and then dissect everything you learn in order to create your own trading style.

The Institutions Are Taking the Bitcoin Enthusiast’s Money

Look what happened as soon as Bitcoin had its own futures contract created for them in December 2017.  Almost immediately we saw the run up end.  The manipulation had started.  The easy ride of everyone buying and no one selling was over.  The big boys are involved and their only concern is to take as much money as they can from everyone who had purchased Bitcoin during the big run up.  In my opinion that is the only reason why the futures contract was created.  The institutions saw billions of dollars being traded that they did not have access to.  Now that they have access look at how the chart has changed after the Bitcoin futures contract was created!

From the chart you can see they are doing an exceedingly good job of moving the money around.  Since the futures contract was created price has been on a downward trending roller coaster.  They want to take as much money as they can and then run the price back up.  They are the best in the business at extracting money from weak investors/traders.

But do not give up!  Price will eventually come back up.  When it does I will be ready to reap the rewards.  I am continuing to make purchases as price decreases.

What if Bitcoin Goes to $100?

Even if Bitcoin goes down to $17 (that is the closest I could get the Fib tool to $0) look at where the 50% Fibonacci retracement ends up?  It ends up at $9,361.  So you could get out easily around $9,000 (I like to exit just short of the 50% Fib retracement level).  Any purchase under $9,000 would make you profit when price eventually retraces.  The top of the yellow box in the chart is the 50% Fib retracement level.  The lower part of the yellow box is the 38% Fib retracement level.

And this is the worst case scenario if Bitcoin goes to nearly $0.  This is what I call a “free trade” and is one of the cornerstone trading philosophies I follow when trading stocks.  If you get in anytime under $9,000 then when price eventually comes back up to the 50% Fib retracement level you are making money.

You just have to wait for the retracement to happen.  The lower price continues to go then the better the return you will have if you continue to purchase as price decreases.  The only thing that could be better would be if there was a dividend involved so I could get a little extra money while I wait.

Conclusion

I am long Bitcoin and am continuing to purchase the lower it goes.  This could end up being a longer term trade ( > 3 months) but I believe the setup is providing great returns when the retracement happens.  The traders/investors will continue to get shaken out who do not understand what is taking place.  Once the institutions have enough people out and have enough long positions they will run the price back up.  Like I have said a couple of times already, I am making small purchases as Bitcoin continues to go lower.