Nearly Any Bitcoin Dip to This Level Is a Buy

Bitcoin investors have two options. [Jeff Clark's Market Minute]( Nearly Any Bitcoin Dip to This Level Is a Buy By Eric Shamilov, Contributing Editor, Market Minute Gold investors sleep well at night… Bitcoin investors should too. I know with the recent[volatility]( in the crypto markets, that may seem crazy… But the same logic behind gold investors pounding the table for higher prices validates bitcoin as well. Don’t just take it from me... On Tuesday, a quote from Ray Dalio – one of the greatest macro investors of all time – made the rounds on financial news headlines. At a Coinbase conference, he said, “‘I’d rather have bitcoin than a bond.” That might surprise anyone familiar with Dalio – who’s been openly critical of cryptocurrencies in the past, and only recently softened his stance. But to me, this quote simply validates what I've seen in the data… Namely, that bond interest rates have a significant relationship with both bitcoin and gold. So today, I’ll share why this relationship – along with other factors – points to a specific price floor in bitcoin… And how bitcoin investors should use this information to profit moving forward. Recommended Link [To Any American Who Owns a Cell Phone]( [image]( If you own a cell phone, then mobile service providers hope you never get to see this video that could soon go viral. It was shot in downtown Denver by a multi-millionaire, who exposed sensitive truths about mobile phones and 5G. His experiment could strike a bad chord with mobile phone companies. But you’ve got to see what this man discovered and what it means for phone users in the weeks ahead. [Click here to see this video.]( -- Why Bitcoin Fell, and Won’t Fall Much Further [When we outlined the real rates/bitcoin relationship]( in last month's essay, we stressed that as long as the rate of inflation exceeds the nominal treasury rate, both bitcoin and gold will have a price floor. And, as inflation picks up, the demand for scarce assets like bitcoin and gold should increase. Why, then, did bitcoin plunge 50% last week? In a word… Leverage. Leverage is the pin that pops bubbles. The real estate bubble of 2008, the tech bubble of 2000… The list goes on. Not only have crypto trading accounts been massively overleveraged in places like Asia, but there’s been a new trend in asset-based lending where bitcoin now serves as collateral. That means people are borrowing fiat currency in exchange for the lender holding their bitcoin. When bitcoin drops, so does the value of their collateral. Debtors unwind their leverage – selling their bitcoin to cover obligations – and the overall selloff is exacerbated. This dynamic is now fairly known… Even CNBC is talking about it. But there’s another factor that’s contributed to all this that hasn’t been talked about much… Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Just like the 2017 crypto market top, the timing of last week’s volatility coincided with the introduction of a new futures product. The CME (Chicago Mercantile Exchange) introduced a new leveraged futures product to trade bitcoin earlier this month. It allows traders to control 1/50 of a bitcoin for around $1,500. So when bitcoin was trading at $60,000, that amounted to 4:1 leverage. Thankfully, these products have a circuit breaker component to them. If prices drop too much, the exchange shuts down trading. During last week’s volatility, that level was $30,205… And it got hit before abruptly making up most of the losses that day. In the short term, these factors can weigh on prices. Although unnerving, long-term bitcoin investors should just completely ignore them… It’s all just short-term noise. But I also think the effects of these factors have already run their course. And in the near term, they’re putting a floor under bitcoin at around the $30,000 level… [This one stock could be the game changer you’re looking for]( $30K Is the Bitcoin Dip to Buy Take a look at this chart of bitcoin, with a volume profile overlay… [(Click here to expand image)]( [We introduced the volume profile a month ago.]( There, I explained why “I can’t help but stay [bearish]( on bitcoin as long as it trades below $58,000.” The red dotted line in the chart shows the interaction between price and this massive volume build up. After a week of rampant volatility, bitcoin found clear [support]( at the $30,000 mark. And, as we show from the volume profile on the left side, there was significant buying interest between $30,000 and $40,000. This tells me that any slide below $40,000, and closer toward $30,000, will generate buying interest in bitcoin. The $30,000 area is where the big players in the market have stepped in. We called this range in last week's essay, citing that [it seems the “whales” are buying](. So on Monday, bitcoin tested this level again and bounced off admirably. It’s trading close to $40,000, as of writing. If it can break through this level, it could trigger a new wave of investors buying back in… I’ll go out on a limb and say if the $30,000 level breaks, it means something has gone critically wrong with the entire crypto ecosystem. That’s how strong this price floor is. With this in mind, bitcoin investors have two options… - Actively trade these massive price swings – being ready to buy at $30k and sell higher. That’s a tall order even for professional traders. - Play the long game – where the continued effects of inflation and increasing crypto adoption are likely to propel bitcoin higher over time. Either way, investors should look to the $30,000-$40,000 range as a good place to add exposure. But at the same time, investors should be ready to sell anywhere below it. Regards, Eric Shamilov Contributing Editor, Market Minute Reader Mailbag Which option with bitcoin would you most likely take? Or, are you currently staying out of cryptocurrencies? Let us know your thoughts – and any questions you may have – at feedback@jeffclarktrader.com. In Case You Missed It… [WOW! Next Tech Trend BIGGER Than Bitcoin.]( This is a “BUY or CRY” warning… Jeff Bezos, Elon Musk, and Mark Zuckerberg… Along with the Army, Navy, Marine Corps, and Pentagon… Are all piling into a controversial new technology. The World Economic Forum predicts this new technology will be worth $12.7 trillion in the next few years… That’s up to 20X bigger than Bitcoin… and up to 84X bigger than Ethereum… If you’re looking to cash in on the next major tech trend… [Click here for the full story. 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