Could be a good buy low - sell high opportunity. There is still a lot of hype around crypto. If buyers start coming in around 4000k thinking that it is a cheap time to buy then the price could sky rocket again
Opinion: Victims of bitcoin insanity are quickly piling up (Nov 20, 2018)
Ivan Martchev (Investment strategist)
'Chipmaker Nvidia last week issued revenue guidance for the current quarter of $2.7 billion, falling well short of analysts’ consensus estimates of $3.4 billion. The culprit? The deflating bitcoin bubble!
Some explanations for earnings and revenue warnings you just can’t make up.
The global cryptocurrency mania — not only for bitcoin BTCUSD, +4.79% but similar absurdities — led to strong demand for graphics processing units (GPUs), which Nvidia is a leader in, as they are used to run the computations necessary to “mine” cryptocurrencies. As the air has rapidly left the global crypto bubble, mining those worthless lines of code has gotten less lucrative and, hence, the demand for GPUs has rapidly declined.'
'...As I’ve explained previously several times, the term “market cap” when used to describe a cryptocurrency is absurd. Market cap is short for “market capitalization,” or the total worth of all publicly traded stock of an operating company. It is supposed to discount all earnings (or cash flows) as far as all investors in the company’s stock (dubbed “the market”) can see and, thus, value the company that way.
The way we know bitcoin, and all other cryptos, are a bubble is by making the glaringly obvious observation that they cannot produce any cash flow whatsoever, making the term “market cap’ absurd. That’s not to say blockchain as a technology cannot be useful without the unnecessary step of buying a digital token called bitcoin, which is calculated to limit the amount of bitcoins at 21 million and thus make their price rise as more poor souls cram themselves into this line of code in search of riches. (For more, see “Bitcoin is perfectly tracking major bubble phases.”)
As history has proven on multiple occasions, most bubbles end with the majority of investors losing massive amounts of money as they hold and hope for the bubble to reflate. Regrettably, after bubbles pop, they can take decades to recover and “take out” the bubble price high, or, worst-case scenario, disappear. I think bitcoin will be a worst-case scenario situation.'
'...To be absolutely clear, I will never make an investment by looking at a chart alone. I have to understand what makes the chart “tick” and what makes an investment, as in the case of specific stocks, rise or fall. Since there never will be any profits, or cash flows for that matter, generated by bitcoin, ever, it is conceivable that it will go to zero, nada or nil. It does not take a genius to figure that one out.
That said, let me put my amateur technician’s hat on. It appears that bitcoin has broken below a major support level at $6,000 (see chart). The chart shows declining peaks and even lows that got taken out last week at that key level. If one reads the chart as $6,000 being the climactic low that was hit after the top was set on Dec. 18, 2017, and $12,000 is the first major rebound off that climactic low, then the bitcoin chart has formed a “bearish wedge,” or a “descending triangle” pointing from $12,000 to $6,000. The measured move of that breakdown is $6,000 (or the width of the triangle) below the support level of $6,000.