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4 December 2021: Overnight, Bitcoin unfortunatly took quite the tumble. It fell straight through support down nearly $10,000 in a single shot. Since the temporary bottom at $42k, Bitcoin has bounced back up to over $48k. Does this mean you should be buying the dip right now? Not exactly. In this quick article, we will go over the risks and potential rewards of jumping into Bitcoin right now.
Know the Risks
With the breakdown last night, Bitcoin is now 30% down from its all time high that was minted nearly a month ago now. Bitcoin has largely been trading sideways since October, seeing two peaks that both set all time highs at the time - one at $67k and the overall ATH at $69k. While we have already seen a sizable bounce, further upside could serve as a secondary opportunity for short term holders or even long term holders to offload coins at a more favorable price.
Anyone long from $40k and above - this is where panicked investors may get out with either a smaller loss or perhaps a small profit. Of course, this could serve as a potential accummulation opportunity for whales, but not necessarily if more downside is anticipated.
Key Takeaways:
- Assess your position and determine your risk tolerance while market is relatively stable
- Understand Bitcoin and other alts have been in a downward trend for weeks now, double digits off ATHs
- Upside does not necessarily outweight downside at this point in the bull run
If you have been reading crypto content from RekTimes (formerly crypto.think) for awhile now, you will know that back in May RekTimes was largely still bullish. It was still early into 2021 and the market showed obvious signs of large upside to come. Now, that is not necessarily the case.
Here in December, Bitcoin has never come close to reaching the top of the long term price channel again. While it did reach a new all time high (which was expected), the top of the price channel would have been just under $80k instead of below $70k. If $80k was hit, then a $100k Bitcoin would have looked entirely more possible.
Right now at this point in the year, we see roughly 35% to 45% upside to potentially 70% downside depending on how far the market is allowed to slip before institutions, whales, and other investors see the price as extremely lucrative.
Could we see an immediate reversal back to $60k? Of course. Could we also see another 20% leg down? Sure could. Just know the risks of whatever you decide is the best decision for you moving forward.
It is impossible to predict the future. However, that is not the goal of RekTimes. The goal of RekTimes is to provide an unbiased assessment of projects, coins, and the broader market to assist you in making your own investment decisions. We are not here to simply shill bullish sentiment, tell you to buy every dip, and HODL forever. Our only goal is to help you make more informed decisions to help remove emotions from investing and ultimately - help you not get absolutely rekt.
While we will be conducting a deeper assessment into the altcoin market and outside economy, note that at this time RekTimes is seeing a fairly reasonable probability of a bear market on Bitcoin. We will still be releasing articles every single week no matter if Bitcoin is trading at $100k or $1k.
We hope this helps you make decisions for your own portfolios! Do your own due diligence, assess your risk tolerance, and if you ever have any questions, feel free to DM on Twitter.
P.S. - we have a telegram & discord server in the works. Let us know in the comments if this is something you would be interested in!
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