Welcome back everyone to this week’s edition of my Bitcoin - Forex Combo Strategy. I am gearing up for another leg lower in Bitcoin. Bearish pressures have increased since my last update, “Bitcoin - Forex Combo Strategy: Photonic Mining”, and I think we will head down from here. I cannot think of a better Christmas present from Bitcoin. I am watching price action as it approaches my support zone between $6,380 - $6,550, but we may see prices accelerate farther to the downside and closer to the $5,170 - $5,520 area. This will bring us dangerously close to the crucial $4,868 level, which is what separates us from a great rally in 2020 and total collapse.
The long-term fundamental outlook for Bitcoin remains extremely bullish, and while the technical outlook points towards more downside, I predict it to be the launchpad for a great 2020. New capital has dried up, and almost 60% of Bitcoins purchased in 2017 have not been moved, a recent study showed. This further confirms the transformation in Bitcoin, which I addressed in several posts. Bitcoin is in a transition phase from remittance to value storage, and this represents a critical shift in price action moving forward.
Many believe that Bitcoin represents a decentralized blockchain. China is home to over 65% of the hashrate, with 50% situated in Sichuan province, according to a recent report published by CoinShares Research. Therefore, China exerts control over the blockchain, and this is an issue that remains unaddressed. The reason for China’s dominance can be traced to cheap electricity. PRMine noted that “China is a large country and there are many poorly developed areas with low-price, abundant electricity, such as Xinjiang, Yunnan, Inner Mongolia, and Sichuan. As we all know, electricity costs and mining machines are two important factors for mining costs, so mining companies and individual miners prefer setting up mines in China.”
At the same time fresh capital is decreasing, Bitcoin whales are getting bigger. A whale is an anonymous account that holds more than 1,000 Bitcoins. According to data from Coin Metrics, whales now control 42.1% of Bitcoin supply. This reduces price stability, and whales can easily manipulate Bitcoin in the short-term. John Griffin, a Finance Professor at the University of Texas at Austin, noted that “The problem with a few large players holding crypto is that when they sell they can easily push the price down, which makes the market susceptible to rapid swings.”
I have made no changes to my cryptocurrency portfolio, but I am looking for the right opportunity to short Ethereum and add Bitcoins. I currently hodl 1,000 Bitcoins, at an average entry price of $7,950, 60,000,000 Ripples, which carry an average entry price of $0.3015, and 100,000 Litecoins with an average entry price of $52.80. The three charts below show my Bitcoin, Ripple, and Litecoin holdings.
I also keep my 250 lots long Gold position, that I took on October 18th 2019 at $1,485.00 for a margin requirement of $372,798, with a pip value of $250. I remain patient, and in case of a sell-off, I am planning to add another 500 lots below $1,400. On December 12th 2019, my stop loss was triggered and closed my 500lots USDJPY short position at 108.500 for a profit of 25 pips or $115,098. The two charts below show my open Gold position and my closed USDJPY trade.
Here is the summary of my Bitcoin - Forex Combo portfolio: I hodl 1,000 Bitcoins worth $7,190,000, 60,000,000 Ripple worth $12,228,000 and 100,000 Litecoin worth $4,374,000 plus a total cash portfolio worth $5,523,503. Also, I have the following positions in my forex portfolio: a 250 lots Gold long position worth -$133,548. My total Bitcoin - Forex Combo portfolio is worth $29,181,955, down $399,995 from last week’s value of $29,581,950 and off of my all-time which stands at $34,799,502. Are you ready to grow your account? Take your first step now, open your PaxForex Trading Account today, and follow my Bitcoin - Forex Combo Strategy! Comment below with any questions you may have, and I will be happy to help you get started!
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