Excessive Greed: Know when to Exit the Bitcoin

“Be fearful when others are greedy and greedy when others are fearful.”

That’s one of the trading philosophies of billionaire Warren Buffett.

At times, greed can get so severe we don’t see the reality of a situation we are only consumed by excessive blind momentum.  In fact, when the price of silver begins to rally, analysts from here to Timbuktu say it could run to $50 an ounce. It never happens though.

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Look at the Bitcoin for example. 

It’s tough to argue that the Bitcoin has become one of the most rewarding currencies of the last year.  Up nearly 180% in a year there haven’t been too many signs the rally could stall. 

That is, until now. 

Since it’s $17 low in September 2013 to a high of $1,194.03, it’s had a sizable run on the heels of increased regulation from Chinese authorities clamping down on money laundering, demonization in India, and volatility in other currencies.  The same analysts that said silver could run to $50 say that the crypto-currency could now run to $3,000. 

That’s a long way off and may only be a headline for the analyst.  Be wary of that.

Technically, it’s at an all-time high after breaking above November 2013 highs of $1,108.80.  What’s also interesting to note is just how over-extended Relative Strength (RSI) is.  The last time it was this high, and as unsustainable was in 2014, when the currency slipped from $1,120 to $204.69.  In fact, most of the technical patterns all say it’s time to sell.

That’s not to say the currency can’t regain lost momentum moving forward.  It just means that perhaps it’s time to move on from such blind momentum until it cools off a bit.

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Learn Simple, High Probability Setups from Pro Traders. Prove Your 
Mastery of Their Strategies and Get Paid To Trade! Learn How Here

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