A year ago today, Bitcoin peaked at $19,511.
Former International Monetary Fund economist and Pharo Senior Risk Trader Mark Dow made an unpopular bet not long thereafter: Bitcoin would not sustain its growth and the price would slip from there. He entered a short position and rode his intuition all the way to the bank, finally closing the position today. A big part of his intuition was the launch of Bitcoin futures trading.
Dow wrote a sort of guide on shorting Bitcoin around the time he’d opened his position. Not quite a week after the peak, he wrote:
First, bitcoin is volatile. It’s annualized volatility is over 100%, implying daily moves up or down of over 6%. Second, bitcoin exchanges are open 24/7, but bitcoin futures follow regular Globex hours. Third, the exchanges have integrity risk (e.g. Mt Gox) and the futures have 20% collars. These last two factors increase gap/discontinuous pricing risk for those who trade the futures, even though I suspect these factors represent more risk for long positions in bitcoin futures than for short ones.
— Dow (@mark_dow) December 18, 2018
He told Bloomberg that he’s already taken profits twice this year on the position, but now he has finally decided to close it altogether. He didn’t comment on whether this is because he sees an upswing coming. He said:
I’m done. I don’t want to try to ride this thing to zero. I don’t want to try to squeeze more out of the lemon. I don’t want to think about it. It seemed like the right time.
Dow frequently refers to Bitcoin as “faith-based.” He said to Bloomberg that the reason for last year’s bubble was largely people “believ[ing] the narrative” and that a failure on the part of many traders to actually understand the underlying technology lead to a “more violent” bubble.
Novogratz Believes Bitcoin Will Be $3,000-6,000
Erstwhile, Mike Novogratz feels that a gradual demand pressure is building in Bitcoin, telling Bloomberg that there was a “monster correction” which is “over.”
His conviction level remains “high.” He pointed to the dot com bubble, saying that both the Bitcoin bubble and the Dot Com bubble were based on “something real.” He made the point that the Internet has changed the world in many ways.
CCN’s own chart analysis shows that BTC/USD will either break out and head on another bull run soon or careen off the edge, given the Doji pattern presented in recent charts.
Featured image from Shutterstock. Mark Dow photograph from LinkedIn.
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Source : CryptoCoinNews