Tuesday, January 16, 2018

Is The Sky Falling ? No It Is The CBOE/CME Futures But The Flippening Is Still On.

So we are at 11K for BTC today and we nearly went below 10K. What caused this crash? Remember back in December when some of us had doubts about the futures being bullish for Bitcoin, Well we were right. The short sellers are in to make a fortune.

To make money you will always need to bet against the trend ant at that time the trend was bullish. All the pundits were predicting 25K 30K Bitcoin. If you were a whale or belong to that group and had the resources to sell the index then taking up a short position on the futures would be the surest and most profitable bet of all. Each CME contract was for 5 BTC which at 18K would mean a profit of around 40K a contract. The beauty is that this is an unregulated market and even if they manipulated the index there is no authority that can hold them accountable for market manipulation.

The first CBOE futures expires 17/1/2018 and the first CCME futures expires a week later. We can expect to see bearish prices for the next week or two. By then when the sentiment is really bearish and pundits predicting 5K BTC then the smart money futures bet will be the other way. So we will see a huge recovery come March/April 2018.

Update : Calvin Ayrn was bringing in significant hashpower to BCH this week. Instead we we the hashrate increasing in BTC. It could be difficulty pump for BTC, before pulling the plug. Looks like it is Coingeek.com and they have started mining BCH. First block today. This is the beginning of the end for BTC. Good riddance.

The flippening is still on.

I do not trade futures. I buy on fundamentals. For this period the only fundamental that we need to be concern with is that both BTC and BCH cannot co-exist on the same mining algorithm. BTC will have to fork away once it is caught in the Chain Death Spiral. High transaction fees is an extinction event, and BTC is only holding the higher price ahead of BCH because it has incumbency.

A price drop of this magnitude without the price of BCH following suite would have triggered the Chain Death Spiral for BTC. However all cryptos including BCH experience the same sell off which means that weak hands who were only in it for speculation and a quick profit have sold their positions.

What we need to realise is that there were many BTC investors who bought into BTC at up to 19K and have moved the BTC to their personal wallet, found to their detriment that their transfer to the exchange for a quick sell was stuck and in just over 24 hours saw their investment drop an additional 3K per BTC and it is possibly still stuck in the BTC unconfirmed mempool. This will be a bitter pill to swallow. Another angry BTC investor.

Everyday the odds are being stacked against BTC. More people are leaving. More businesses announcing that they no longer accept BTC and they are switching their business model to BCH. More mainstream adoption for BCH.  More features being added to the BCH platform and more project shelved because of the unuseability of BTC are now being revived on the BCH chain.

The greatest threat to BTC now is not a drop in the price of BTC but a quick rise in the price of BCH. Keep an eye on that metric. It was .18 when the market collapsed and went as low as .15 but have now recovered to .16

Yes. The flippening is still on.