Bitcoin Futures Come Home to Roost
This theory might be BS or it might be the Ghost of Bitcoin Futures coming to warn us all about the dangers of Scrooge-like hoarding, or something. (Isn’t Christmas still 342 days away??)
CME and CBOE had roughly 23 thousand coin contracts on January 16. CBOE is connected to the Gemini exchange, and ten thousand coin futures makes up nearly 2/3 of the 24h exchange volume. However, the actual expiration is today, 1/17. Not everyone waits to cover the contracts, which could have induced a flood of contract sales, leading to a huge sell wall.
If this theory is true, we should expect another 20% dip today, ending just before the 4pm Eastern close. But this assumes the cash volumes on a single exchange are enough to push the market down this much, which seems unlikely.
The Dip Is the Knife, or the Knife Is In the Dip
Between widespread new regulation concerns in South Korea, China, Germany, France, and Russia, the influx of institutional and new/weak money, the proliferation of random and useless tokens, and the Lunar New Year, this crash is waking and shaking crypto-speculators (ie, your next door neighbor) up in a big way.
There’s a saying in trading: “Buy the dip.” There’s another saying as well: “Don’t try to catch the falling knife.” While prices are plummeting, it’s best to stand by and wait for a correction before buying. That way you can potentially avoid getting stung by the knife. But as always, there’s opportunity in chaos.
Unless you’re a trader, there’s very little here you need to do. The key here is not to panic like everyone else. Wait for the dip, and then buy. After all, even the St. Louis branch of the Fed
thinks there may be something to this crazy cryptocurrency after all.
Or you can just sit back and watch as $100 billion
of fake imaginary internet money goes spiraling down the drain.