Bitcoin - Crypto investing and trading discussion

Bitcoin - Crypto investing and trading discussion thread

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Here is the official StonkForums crypto investing and trading discussion thread, for all of you crypto bugs out there.

 

Bitcoin's Big Day
Mon, Feb 8, 2021

When it was MicroStrategy (MSTR) it was dismissed as a gimmick, but now that Tesla (TSLA) has used a big chunk of the cash on its balance sheet to buy bitcoin, more people are going to take notice. TSLA hasn't historically been a company to shy away from publicity, so some will write off today's announcement as a marketing stunt, but at $1.5 billion, it would be a pretty big stunt. Also, while it's easy to forget, TSLA is one of the largest companies in the world.

Prior to TSLA's announcement, bitcoin was already up on the day, but once the news hit, the rally reached a whole different level. Bitcoin is currently trading up over 11% on the day making it the best one-day rally for the crypto-currency since last April.



With today's rally, bitcoin is also breaking out above its highs from early January and trading at over $43K.



Not only is bitcoin at new highs for the year, but the late 2020 breakout after three years of consolidation is continuing to gain steam.



One of the primary arguments for bitcoin these days is it serves as a digital store of value- or gold 2.0. Based on the relative strength of bitcoin versus gold, gold 1.0 looks a lot less shiny these days. When bitcoin last peaked in late 2017, the ratio of bitcoin to gold peaked at just under 15. A year ago today, the ratio was under six ounces of gold for every bitcoin. Back in early January, the ratio surged to more than 21 ounces of gold for every bitcoin. After this morning's rally, though, one bitcoin is worth more than 23 ounces of gold, and the ratio increases by one ounce for every 4% rally in bitcoin.



So, where does interest with the general public currently stand towards bitcoin? One way to track interest is through Google Trends. The chart below shows search trends for the term 'bitcoin' over the last five years. As bitcoin ran up to record highs in late 2020 and early 2021, search interest also picked up but peaked out at levels nowhere even close to where search interest was at the prior peak. This could be read in one of two different ways. The bullish case would be that enthusiasm for bitcoin is nowhere nearly as high now than it was back then, so there's still much more room to run. A less bullish take, however, would be that back in late 2017, no one had ever even heard of bitcoin, so they were looking it up just to figure out what it was. Three years later, though, most people are at least familiar with what bitcoin is, so there is less reason to search for it.

 

wasn't by much here, but is worth at least noting that the coin did top 50k earlier this AM

 

hit another new ATH earlier this AM above 52k now

 

almost to 54K now. this is pretty remarkable if i may say so myself lol.

 

that is awesome @stock1234! i admittedly never totally got into the whole crypto thing. albeit, there were times that i had the itch to look into it more when it was waaaay lower. but, never did. kinda regretting that now in hindsight lol.

 

look like 56k printed the other hour. good lord lol

 

Bitcoin's Largest Drawdown Since Last Month
Tue, Feb 23, 2021

Bitcoin hit record highs over the weekend, but it's having a week to forget. After topping $58,000 on Sunday, bitcoin's price barely held $45,000 this morning, and at current levels is still down over 17.4% from its record high three days ago. As sharp as bitcoin's decline seems now, we'd note that it is still 34% above its 50-day moving average (DMA) and more than 167% above its 200-DMA. Those spreads show just how strong the recent rally in bitcoin has been.



While bitcoin is down over 17% from its recent highs, at this point it has been a relatively modest pullback for the leading crypto-currency. The chart below shows the history of bitcoin's daily price relative to its prior all-time high going back to 2015. During the last six years, bitcoin's average drawdown from its all-time high has been 35%, or double the current level of 17.4%. While the pullback this week has been swift, you don't even have to go back a month to find a larger drawdown from a record high. Back on 1/27, bitcoin was down over 26% from its prior record high of 41,981. That prior record high is 12% below current levels.

 

testing ATHs here again

 

Bitcoin in 2017 vs. Now
Wed, Apr 14, 2021

On the same day that Coinbase (COIN) is set to IPO, Bitcoin traded above $64,000 for the first time ever. The leader in the cryptocurrency space has gone on a massive run over just the past few months having more than doubled just year to date. Over the past year, bitcoin is up well over 800%.



Those eye-popping returns in a relatively short span of time may seem like a bit of déjà vu from only a few years ago, but we would note that the comparison does not quite stack up. For starters, while Bitcoin has been a nine-bagger over the past year, the rate of change was much gaudier back in late 2017 when it rose upwards of 2,400% year over year by the time of its high around $19,000.



In the chart below we show the performance of Bitcoin in the year leading up to the December 2017 peak versus the run over the past year. Both runs are extremely impressive and at times have tracked each other fairly well, but there is one distinguishing difference. In weeks leading up to the prior peak in 2017, Bitcoin went into orbit gaining over 240% from mid-October to the December high. By comparison, Bitcoin is up only around 30% from mid-February through today.



In addition to the move having been smaller recently, Bitcoin also appears to have seen interest fall off. As shown below, Google Trends data showing searches for "Bitcoin" peaked in late 2017 at the height of the crypto craze as people rushed to learn about the asset. Search interest has been mostly muted since then, but it did pick up within the past several months. Bitcoin is on the tips of more tongues today especially given the direct listing of Coinbase (COIN), but Google searches for the crypto are still well below the highs from a few years ago and are even well below the more recent peak from the start of this year. In other words, from a sentiment perspective Bitcoin appears to be less of a frenzy now than it has been in the past.

 

Ether Gets On the Field
Thu, Apr 22, 2021

Ever since 'crypto' entered the mainstream, bitcoin has been the superstar. Sure, doge has gotten its 15 minutes, but at least nine out of ten times, if you ask someone about crypto, the first asset they are going to mention is bitcoin. The next most popular crypto asset has pretty much always been ethereum, but it has always taken a backseat to bitcoin. Even today, while bitcoin has a total market value of just over one trillion dollars, the total value of ether out there is just under $300 billion.

While ethereum is less than a third the size of bitcoin, in recent days it has been holding up very well given the pullback in bitcoin. The chart below shows the performance of both crypto-currencies over the last six months. While they've followed relatively similar paths, you'll notice that despite bitcoin's 15%+ pullback, ether has traded to record highs.



Another way to put the recent performance of ether versus bitcoin into perspective is to compare the ratio of the two over time. In the chart below, we show the ratio of bitcoin versus ether going back to early 2018. A high ratio indicates that bitcoin is outperforming ether and vice versa. Back in late 2018, the ratio between the two peaked out at more than 60 ether per bitcoin, but it has been trending lower ever since. In fact, as of today, one bitcoin is worth just over 21 ether which is the lowest ratio since August 2018. Ether may have been nothing more than a single-A player relative to bitcoin a year and a half ago, but it has quickly worked its way up to the system and earned itself a spot in the dugout next to bitcoin.

 

Ethereum Surges and Then Some
Tue, May 4, 2021

For many years, Ethereum may have felt like the ugly 'step crypto' to bitcoin, but like the swan in the fairy-tale, it has come into its own lately. Just in the last two weeks its price has surged over 50%. 50% in two weeks! Ethereum's market cap currently clocks in at about $380 billion (compared to $1 trillion for bitcoin), so the 50% rally in two weeks works out to an increase of around $50 billion. What's even more amazing about Ethereum's surge over the last two weeks is that it isn't even close to a record in terms of two-week gains. As recently as January, Ethereum saw its value more than double in two weeks.

The chart below shows the rolling two-week change of Ethereum over the last three years. During that span, there have actually been five other periods where the two-week change was even higher.



When anything appreciates 50%+ in a two-week span, it only seems logical that it would experience some sort of reversion to the mean. Then again, a two-week rally of 50% seems to defy all logic in the first place, so who knows. The chart below shows the price of ether over the last three years with red dots showing every time the trailing two-week return was greater than 50%. Looking at the chart, there were pullbacks following some of the prior periods, but they were hardly guaranteed. After the most recent surge in January, for example, ether prices barely experienced a hiccup.



The table below shows the performance of ether over the following week, month, and three months after the first day in each period where ether prices saw a 50% two-week gain. In three of the five prior periods, ether was lower in price a week later for a median decline of 1%. One month later, though, ether rallied three out of five times for a median gain of 16.2%, and three months later, the median gain was 1.88%.

Looking at the results, there is obviously no clear trend in ether prices following similar surges over a two-week span, but the magnitude of the moves in either direction shows just how volatile investing/trading in the crypto-space can be.

 

wow, i have been largely MIA this week due to a pick up in IRL things which has been largely keeping me pretty busy this week. but just happened to catch the price action for crypto's today and WoW! pretty crazy day for btc today, and that isn't putting it lightly either lol.

 

Bitcoin Volatility Explodes
Mon, May 24, 2021

The last several days have been quite the roller coaster ride for bitcoin. Since last Friday, the one-day moves (remember it trades on the weekend) have been down 12%, up 8%, down 11.5%, and up 12.3% today! Even for bitcoin, this is some crazy volatility.



If today's gain in bitcoin holds above the 8% level (or if it reverses and trades down 8%), it will be the first four-day streak of daily moves of 8%+ since 2013! Going all the way back to the start of 2011, there have only been four other periods where bitcoin experienced longer streaks of daily moves of 8%+. What makes the streak even more notable this time around, though, is bitcoin's market value. The last time bitcoin experienced a similar streak, it was trading at under $300 per coin. Today, it's more than 100 times that at over $38,000 for a total market value of more than $700 billion!



While the last four days have been incredibly volatile for bitcoin, its volatility over the last month hasn't been nearly as extreme. Over the last 30 days, bitcoin's average daily move has been just under 5%. This is now just barely above its most recent peak earlier this year but still above the prior peak of 5.5% seen last April.

 

Bitcoin Hangs on to 30K
Tue, Jun 22, 2021

It has been a roller-coaster ride for bitcoin today. After breaking below $32K, then $31K, $30K, and $29K all within a matter of hours, buyers stepped in and prices rebounded back above $32K. Over the course of the day, bitcoin prices were down over 11% versus the prior day's close but have rebounded more than 14% off the intraday lows. A 10% intraday decline coupled with a 10% intraday bounce is practically unheard of in the equity markets, but for bitcoin, it has become increasingly common. This year alone, today's reversal marks the fifth such intraday rebound of 10%+ following a 10%+ intraday decline, although it only happened twice in 2020 and three times in 2018.

As far as bitcoin's price chart is concerned, today's bounce represents another in what is becoming a long list of testing the $30K level. It happened twice back in January before bitcoin rocketed above $60K and has now happened four times since prices started to fall in early May. When it comes to technicals, the more often a security tests support or resistance, the weaker it is considered to become. If that holds true with bitcoin, a few more tests of that level in the short term could open the floodgates to the downside.



Even after today's bounce in bitcoin, its price is still over 48% below its all-time high reached just over two months ago in mid-April. While 48% sounds pretty steep, it looks like a walk in the park compared to prior drawdowns. Following peaks back in early 2011, early 2013, late 2013, and late 2017, bitcoin's price fell anywhere from 70% to 93% each time. Even more surprising is the fact that since the start of 2011, bitcoin's average percentage spread between its closing price on a given day and the all-time high as of that date was 48% - which is right where it is now.

 

Bitcoin Drawdown
Tue, Jul 20, 2021

In today's Morning Lineup, we detailed how the total market cap of crypto is reaching new lows in the context of a multi-month unwind. That is as the largest cryptocurrency, Bitcoin, falls below 30,000 for the first time since January 1st. Granted, back then Bitcoin had never been that high before. Today, Bitcoin is down for the fourth day in a row nearing extreme oversold territory (measured by 2 or more standard deviations below its 50-DMA) and is testing support around the lows from earlier in the spring. That all leaves Bitcoin 52.86% below its all-time high above 63,000 from April 15th. While the price of the crypto being cut in half may sound dramatic, as we have noted in the past, it is more or less par for the course for the speculative asset. As shown in the second chart below, through its history the average decline from an all-time high has been 47.6% (median 51.9%); only a few percentage points less than the current drawdown. Click here to view Bespoke's premium membership options.