Bitcoin’s 2017 Journey Recap
Last year was a thrilling ride for Bitcoin enthusiasts, kicking off at just $966 and soaring to an astronomical $20,000. Even amidst recent price swings that could make a seasoned trader dizzy, Bitcoin has outperformed nearly every other type of asset. But as we step into 2018, many are left pondering: what’s next for Bitcoin? Will it rally again, or is a crash looming in the shadows?
The Bulls and Bears Speak Out
In the world of cryptocurrency, opinions run as wild as the prices! Optimistic bulls are envisioning Bitcoin skyrocketing to $60,000 this year—an eye-popping 300% leap from current levels. Meanwhile, skeptical bears poke their heads out to declare Bitcoin is nothing more than a bubble awaiting a pin. Among the mayhem, Saxo Bank suggests a ludicrous possibility: Bitcoin might hit $60,000, only to plummet to a mere $1,000 afterwards! On the flip side, entrepreneur Julian Hosp thinks it could tumble to around $5,000, but also suggests it might just touch that golden $60,000 mark first. What’s a trader to do?
Finding Your Trading Path in 2018
To find clarity amidst the chaos, we’ll examine some consistent chart patterns from 2017 that could serve as your trading compass for 2018.
50-Day Simple Moving Average
The 50-day Simple Moving Average (SMA) emerged as a trusty support line last year, reminiscent of a safety net at a circus. In 2017, Bitcoin dipped below this line only a handful of times, and even then, it was only temporary. For savvy traders, buying near the 50-day SMA may offer a glorious low-risk opportunity with the added comfort of keeping a stop-loss below it.
200-Day EMA as a Safety Net
Long-term traders found solace in the 200-day Exponential Moving Average (EMA) throughout Bitcoin’s jaw-dropping ascent. It’s been the Holy Grail of supports since October 2015. Whenever the price slipped below the 50-day SMA, it usually hovered near the 200-day EMA—a golden chance for long-term investments. Don’t fret if it doesn’t drop all the way down though; in previous falls, it never went more than about 15% below the 200-day EMA.
Calculating Trading Signals
While there’s no magic formula to predict Bitcoin’s next move, you can use the “Price Oscillator” (PPO) to track how far the price strays from the 200-day EMA—a nifty tool that could guide your buying decisions.
What If Bitcoin Sinks Below the 200-Day EMA?
A dip below this critical moving average isn’t just news; it’s a flashing red light. It could indicate Bitcoin is either entering a downward spiral or settling into a range-bound phase, and this requires a fresh trading strategy. Remember, timing is everything, so buckle up—this could get bumpy!
Selling Strategies: The Great Escape
Finding the right time to bail can be trickier than you think! Simple trendlines proved to be effective indicators for locking in profits last year. Though not foolproof, they allowed traders to secure healthy gains before the inevitable dips.
The ADX Strategy
For those who love indicators, the Average Directional Index (ADX) offers a solid alternative. Historically, when the ADX surpasses 60, it’s often a signal that it’s time to cash out. Keeping an eye on this can save you from getting too attached to your Bitcoin before a downturn.
Your Roadmap for 2018 Trading
As we dive into the fresh adventures of 2018, understand that forecasting Bitcoin’s price movement isn’t as easy as flipping a coin. While we can learn from the indicators and trends of the past, attempting to predict every twist and turn may just lead to disappointment. Focus on immediate strategies to seize short-term opportunities instead of fretting about the long-term future. Here’s to happy trading and avoiding unnecessary heartache!
