The gold market is setting up for a perfect storm as the top mining producers’ supply is forecasted to decline right when demand is likely to surge. The surge in gold demand will occur as the broader stock markets roll over and begin their inevitable massive correction. Due to the tremendous amount of leverage in the system, the coming market correction will be quite violent at times.If investors believe the correction is over, and high times are here again, then they haven’t learned anything about the cyclical nature of markets.
For example, I have stated that Bitcoin and the Crypto Market are classic bubbles, and wasn’t at all surprised by the collapse of the Bitcoin price from $20,000 to $6,500 in a short period. However, now that Bitcoin and the Crypto Market have reversed, I see analysis and comments that anyone suggesting that Bitcoin is in a bubble, is flat out wrong. I would kindly like to remind these individuals that markets don’t fall in a straight line.
We can see this quite clearly in the following charts which two came from the article, As Bitcoin Nears $11,000, Here’s A History Of Its Biggest Ups And Downs:
The price of Bitcoin in 2013 surged higher, crashed and then corrected higher before falling over the following year. The same thing took place in 2013 and 2014:
At the end of 2013, the Bitcoin price surged more than ten times to a high of $1,150 before falling to nearly $500, reversed direction and shot back up to $900+. However, over the next year, the Bitcoin price trend was lower.
If we look at the current Bitcoin price trend, we see the very same setup:
As we can see, after Bitcoin fell from nearly $20,000 to $6,500, it reversed and quickly added $5,000. But, this is exactly how corrections behave, as they did for Bitcoin in the past. So, the Bitcoin price may move even higher before it starts to sell-off in the longer-run. Unfortunately, the notion that Bitcoin will continue to endure these corrections on its way to $100,000 or $1,000,000 will likely disappoint crypto investors who are counting on a wealthy lifestyle from their Bitcoin profits.
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