Do You Remember The Crypto Bubble in 2017?

Whenever I think of the later part of 2017 it reminds me of the cryptocurrency boom that was taking the world by storm.

At the height of the boom things got crazy. I remember attending a meetup with crypto enthusiasts that was nothing short of a gong show. It was one big party. 

There were nearly one hundred people in attendance. From stay-at-home moms to retired oil field workers, people from all walks of life were getting in on the action. Some even brought their laptops and were trading while listening and watching a DJ in between talks from local "experts".

After being there for less than five minutes, I immediately knew the top in the crypto market was near.    

That night, believe it or not, marked the exact high in Bitcoin right near $20,000. 

I love trading trends and even bubbles and the trend in crypto, more so Bitcoin and Ethereum (the two largest cryptocurrencies by market cap) look to be waking up. The crypto winter could be coming to an end.

Bitcoin, the original cryptocurrency which is considered the gold standard is approaching $14,000. A break above would greatly increase the odds of a test of the old highs near $20,000. Then from there who knows. Some say $100,000 some say a million. In the world of crypto, there are no limits, especially when it comes to throwing around big random numbers.

What I call the crypto "proxies" or related stocks are starting to wake up as well. Besides buying Bitcoin or cryptocurrencies on a crypto exchange, this is another way to play this trend.

I've already traded one of these names earlier this year, Galaxy Digital Holdings (GLXY.TO) for a 91% profit. However, be sure to do your own due diligence as these stocks are extremely volatile and not for the faint of heart.

As an example, back in 2017 I decided to trade a proxy (related stock) instead of trading a cryptocurrency. I figured that I wasn't the only one uncomfortable opening a digital wallet and there would be others looking to play this trend in the equity markets.

The company shown below was in the blockchain space and was starting to pop up on my nightly scans. It no longer exists on current charting software so I had to dig through my trash bin on my PC so I could take another look at the parabolic move this stock made.

As you can see above when the price held the 50-day moving average it presented a good low-risk entry at $3/share on the basis of this trend continuing. This is what happened next...

If I remember correctly, I ended up getting stopped out somewhere in the mid to high-teens, and as quick as it went up, it just as quickly made its way back below $1/share. 

I was able to get out of this stock with a nice profit because I didn't care about the company or the story it was promoting. I knew they were trying to take advantage of the crypto/blockchain trend and the price action spoke loud and clear both on the way up and the way down.

I believe in price action and trends. I could care less about the prevailing story, especially ones the media spin to get your attention.

Price and trends allow you to detach any emotion that comes from believing and buying into some fantasy. Not only can a prevailing story prevent you from participating out of fear, but it can also trick you into hanging on too long because of your underlying belief.

I don't know if Bitcoin is going to 20K, 100K, or 1 dollar. But I do know that the price action is starting to trend higher and that means there could be great opportunities to profit in the days and weeks ahead.

Ignore the noise and profit from trends.

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