Why Bitcoin Could Fall Lower From Here
Why Bitcoin Could Fall Lower From Here
Bitcoin broke below critical support in the upper $13,000s this morning ($13,500 - $13,800) and is now sitting around $13k at the time of writing this. Bitcoin has consolidated around these levels for the majority of the past week and has found significant support there.
Assuming that many more people are going to declare their cryptocurrencies on their US tax returns for 2017, do you think we are going to see a lot of last minute selling tomorrow, Dec. 31, in order for folks to lock in what may be some great capital losses?
I am thinking that could cause Bitcoin to drop through any remaining resistance.
For the investors who sell Bitcoin to lock in the losses, how many of them will stay out for 30 days, in order to avoid the wash sale rule? And will they come back on Jan. 31, or will they have moved on to other cryptos, leaving a void for Bitcoin?
This might get interesting if we see a wash sale rule crypto dance tomorrow that causes the prices to remain stable.
Ex: I sell my Bitcoin on Coinbase at 11:55 PM on Dec. 31, and then I take that money and buy Litecoin at 12:03 AM on Jan. 1, 2018. The "person" buying my Bitcoin on Dec. 31, then sells me his Litecoin eight minutes later on Jan. 1.
At the same time, millions of other Coinbase investors are effectively doing the same exchanges, although some are selling their Ethereum, and buying Bitcoin, or selling their Litecoin, and buying Ethereum.
Meanwhile, you arbitrage guys on GDAX and Gemini are working that eight-minute gap for all it's worth.
The results are lots of heavy volumes, but little price movements...if we all time it well.
That all said, I bought my first bitcoin on Dec. 14, 2017, and today I bought some Litecoin. Although I am a newbie, I do want to make a prediction. I think Coinbase is going to lock up like Fort Knox tomorrow night.
Really wish I had seen your video on Dec. 13, and then queued up my money in GDAX, as you suggest. Great video.