I have been writing about the crypto market collapse, and while all the signs are there the bull run looks like it will never end.
An accurate prediction needs the use of many tools and I have explained that I see it ending in June this year. Probably in the end of June, around 25-30 there will be a top and a sharp decline.
As we approach the top, the risk-to-reward ratio becomes unworthy to invest. The risk is increasing and the possible rewards are shrinking. One indicator is that all these networks that have reached tens of billions of dollars in valuation are not exactly used. Metcalfe's Law tells us that :
The value of a network is proportional to the square of the number of connected users in the system.
How many users are connected and using the Dogecoin network or Cardano or anything else? Nobody is using crypto for day to day money transfers. We hope that we will use them, but even the Bitcoin Cash network of merchants is not there yet.
We faked usage by those crypto card companies like Crypto.com, the Binance and Coinbase debit cards and more like these. All the news was that crypto is used today and you can buy anything. It is not correct. This is a drawback not an advantage, as cryptocurrencies were created to remove the middleman and act as person-to-person money using P2P technology and not using a service that first sells your crypto and gives the business the fiat currency we are trying to replace.
Bitcoin Cash is exploding today, because it is doing exactly this. It has a network and the usage is increasing day by day, new shops and websites are adding the Bitcoin cash accepted sticker and new users are finding it to be useful.
What else is useful then, I just don't see anything else today. I hope that Bitcoin Cash gets there to replace Bitcoin from the top, but this is not happening yet.
The fact that this bull run is coming to an end in another two months as I explained in other posts, is also noted by @MarcDeMesel in many of his tweets and noise.cash posts.
Marc De Mesel understands this market completely and while I don't know if it can reach 7 trillion dollars before the bullrun ends, I am sure that it will end around the time he mentions:
The Trololo chart Marc mentions is an algorithm that gives the main trend for Bitcoin's price since 2014 and has given accurate predictions. It is a useful tool that we can have in mind together with some more like the hodl-waves.
Most of us have been riding the waves since last year. We traded the bottoms and some of us may have been selling all the way to the top. It is a good idea to be in an asset early and make the most of it. But guess what, we can't predict the exact top and bottom. We use these charts and try to find not one exit point, but many and sell in steps, in different price levels.
In just one year many of us made ten times their money. I have sold 90% right now and I still hold what was my innitial investment with a plan to sell at the level Marc explains.
What I see today, it is just the same as the end of 2017. It reminds me December 2017, when everybody was talking about their crypto investment. It was eurphoria, it was the top. My hairdresser was giving me tips on cryptocurrencies and I was also reading reports coming from my companies explaining the benefits of this magical blockchain technology that we needed to adopt.
We see today streamers, artists, actors, rappers, CEOs tweeting and giving interviews about their DogeCoin potition. If this is not disturbing and alarming then what can be next? The bullrun will end. The crash is near and it won't be kind to anyone. All of this happened again, in 2017 when crypto went mainstream.
I've read about people taking loans and buying Crypto with their credit cards. It happened again in 2017. Anyone that is not aware of the Bitcoin cycles that force the price into extreme highs in a very short time, and then crash are not aware how easy they will lose their funds investing in useless shitcoins.
I see the potential and I see the fair value. What we have today in all cryptocurrencies is extreme value, a bubble that is waiting to pop and the market will crash. Bitcoin's price will go so low that mining companies will go out of business, declare bankruptcy, and ASIC miners thrown on the streets again.
One thing is certain, there will be blood. Buying when there is fear, confusion, massive selling and blood on the street is how top investors make it. If you are ready and willing to buy in something everyone is telling you it is dead and over, then you will have a chance of making it. Being a sheep and following the flock means you will be slaughtered when the time comes. When the market reaches the delusion phase in the chart above, it is profit-taking time. But are we not there yet?
I can answer it with this song by a French trader with a great sense of humour:
