Tax day in the United States is usually April 15. This year, the date was pushed back to May 17. That is a highly irregular action on the government's part, and there was no real reason given for the change.
All of a sudden on May 18, crypto starts nuking.
Imagine you were someone who just reported a nice $100,000 capital gain on crypto in 2020. The day after you send in that payment of what, $40-50k, your $100,000 takes a nice 40% hit before you even have a chance to spend any of it.
You're left with maybe $5-10k in profit, if that. You rush to sell it so that you can eek something out of this. You curse your luck and swear never to touch that psycho fake Internet money again. Turns out all those guys on CNBC you casually watch for your financial advice were right.
And there are anonymous buyers on the other side of the trade just lapping it all up. Anonymous buyers perhaps with an agenda.
I often thought of what would happen if the Fed just right-clicked a bunch of shit fiat into existence and started buying up bitcoin. Perhaps for some reason they can't just do that. In order to keep bitcoin from being a real threat, they need yours. After all, if they just buy up the open orders, they basically burn those bitcoin for all intents and purposes, driving the price up. They could tank the price hoping that you give yours up, or do wash sales with sellout exchanges like Coinbase, but they still need yours for the crypto system to fail. No matter how much money they print or how much they cheat, bitcoin survives as long as you don't give yours up.
I haven't seen this idea put out there, but this could be a component of the dip we're experiencing this week. It also doesn't say anything about whether that dip will bring on a bear market or if it's just a great buying opportunity. I don't think we've made that decision yet.
But it is another reason for me to keep my bitcoin and other crypto in the system, albeit with a slightly different personal monetary policy to maintain my longevity here. I will not sell.
I'm not spreading hopium either, but there is still some reason to think this is a short term dip: Random alts are holding. I don't mean crap doggie coins. I mean alts that represent real projects, which means people in-the-know are sticking around inside the crypto system to make sure their projects stay afloat even as the ship goes down. For instance, MEDIA in the Solana Network requires holding 25 tokens in order to access the site. It is the #1 hodled coin in the Solana ecosystem. Were this a true bear market, I think those holders would capitulate.
In other cycles, alts outpaced bitcoin in the final run before the bear market, but the alts had a truly breakout blow off top before everything went to hell. I didn't see any of the new money in crypto flow to the small alts this time, which makes me believe we have further to go in this bull cycle.
I'm also aware of the Pi cycle chart that was indicating a bitcoin top while other indicators were showing bull run continuation patterns. As it turns out, the Pi cycle was correct in that we are now at a local top for bitcoin. However, the other indicators haven't shown their tops yet. If they are to be respected like the Pi indicator was respected, we have further to go.
There you have it. I'll keep you abreast of my thoughts. The $40k support has broken, which means we probably have further down to go. $32k is a tipping point. I don't think we can go much below there without changing a thesis about this market as a whole. But for now, this is still a bull for me.
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YOUR GUIDE TO MAKING MONEY IN CRYPTO STARTS HERE ---> Making Money in Crypto Part 1
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