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Everyone is heading for the exit: Bitcoin below $10,000

Well, now you all know the difference between market and intrinsic value!  Bitcoin is down to $9,400 -- so a far cry from its US$ 20,049 peak price in January.  It also makes some degree of sense, because the only thing giving bitcoin value is the fact that others want it.  Once sentiment shift, the buyers simply disappear, liquidity dries up and the price continues to fall because there's always a price that clears the trade. 

However, there's an old trader saying:  "Don't try to catch a falling knife"  In terms of size, lets just say that the stock market annual price rise is, on average, 7% (sometimes more sometimes less), the rise of bitcoin over the past 18 months has been in the range of 4,500%.

There is simply no precedent -- aside from the Tulip Mania (shame more people didn't see that movie, there was a real parable fo our time there).

On a different tack; based on these two indicators the market is now in that stratosphere:


Finally, from a technical standpoint, the monthly RSI reading of the Dow Jones Industrial Average shows the stock market is now more overbought than at any other time during the entire history of this index which was created way back in 1896 (chart via Nasdaq.com).


So, one hedge fund predicted that February 14 would be the day the market turns bearish.  Certain that Trump will blame Obama for that correction.  The most worrying aspect of this current bull is the amount of investment on margin.  when the market turns, these are the first place where it hurts, since brokers are under order to sell if certainthresholdss are broken.


Interesting time




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