One year ago, I published a Stock Surge Daily article entitled “Beat the BTC Bubble.”
I compared the rise in BTC to other notable bubbles in history and broke down the five stages every bubble has followed throughout history.
I encourage you to review it as this phenomenon will undoubtedly continue for centuries to come.
But if you need a refresher, these are the five stages as I explained them back then…
The Five Stages of the BTC Bubble
Stage 1: Displacement
Displacement refers to a disruption of the status quo, usually in the form of an innovative new technology like BTC.
Stage 2: Boom
Prices rise slowly at first but soon gain momentum as more and more buyers enter the market.
The fear of missing out (FOMO) takes over as speculators jump on the bandwagon.
Stage 3: Euphoria
Caution is now thrown to the wind. Price skyrockets.
There is no price too high, and all rational arguments are disregarded.
Stage 4: Profit-Taking
In this stage, the “smart money” begins to sell and collect profits on their speculative trades.
They see the warning signs of a pending bubble and wisely exit before the bubble bursts.
Stage 5: Panic
In the final stage, the once-shiny asset begins to lose its luster.
Suddenly, the upside is no longer guaranteed, and even a minor setback can be the needle that pops the bubble.
The Current Technical Picture
At the time I wrote that first article, BTC was trading for $57,000.
Since then, it has fallen by half from its peak and is now below $33,000.
And the technical picture couldn’t be much worse…
As you can see in the daily chart above, price has been falling since the market topped in early November 2021.
It broke through its 21-day (blue line) and 50-day (red line) moving averages shortly thereafter and eventually broke through its 200-day moving average (white line) in January 2022.
Price went sideways for a few months and then came back up to test the underside of the 200-day, where it failed almost immediately.
Since then, price has plunged from about $48,000 down to current levels near $33,000 — a drop of over 30% in just over six weeks.
More Downside to Come
Personally, I think it will go much lower. I wouldn’t be shocked to see BTC fall another 80% from today’s prices.
Adoption has simply not taken place.
Talk to 100 people who own BTC. Ask how many of them have actually purchased something with it.
The answer will be zero.
That’s why I continue to say that BTC is not a currency. Instead, it is a speculative asset.
And that’s easy to prove, as it has shown no price stability.
The value has crashed in the midst of extraordinary inflationary pressure, which is exactly the kind of environment in which it was supposed to shine.
The asset is easy to lose, commissions to buy it are high and the market is running out of new “fanboys” to pump up the price.
Call me a skeptic. Call me a bear. Call me a boomer if you want. But for me, BTC is trash.
Will digital currencies one day replace physical ones? Absolutely.
But will BTC be the one to do it? I highly doubt it.
And even if I’m wrong… Even if users do suddenly adopt it as an accepted currency and find a seamless way to buy and sell goods with it…
How long do you think the federal government is going to let people do business freely with untraceable transactions and remain completely untaxed?
No government in history has looked favorably on competition with their control over the national currency.
And they’re not going to start now. Democrats and Republicans alike both believe in spending a third of Americans’ wealth… and then printing even more.
I don’t care who’s in office.
Once tax revenues start shrinking because citizens are getting paid and transacting business with untraceable cryptocurrencies, there will be a bill to ban them on the floor of the House by the end of that week.
Mark my words!
A Better Strategy
Now, if you’re ready to stop speculating on BTC and want a better strategy for trading the markets, consider this…
When corporate insiders like CEOs, CFOs, executives and board members put down their own hard-earned money to buy shares of their own companies, it’s a huge vote of confidence.
After all, these folks have a footing of knowledge about their companies that Main Street investors simply do not.
It’s absolutely free to attend, so I really hope you’ll join me.
I’ll cover my strategy for trading alongside corporate insiders and generating potentially massive gains with less risk.
I look forward to seeing you there!
Embrace the surge,