Motley Fool Blogger Kevin Godbold: Recent Crypto Bull Run Is A Dead Cat Bounce, Riskier Than Ever
Crypto Blogger Kevin Godbold Thinks That Recent Crypto Bull Run Is A Dead Cat Bounce
Earlier today, in some exchanges Bitcoin, came within touching distance of the $9,000 mark, which is seen by some traders as the “point-of-no-return” for the long-term price of Bitcoin. A retracement to $7,000 – and then back to $5,000 – has been fear as the rally stalled, but instead, the confident run towards $10,000 continues.
However, there are many within the crypto believe that this run is elusive. He thinks that it might just be an age-old case of dead cat bouncing. A dead cat bounce is a small, short-lived recovery in the price of a declining security, such as a stock. Frequently, downtrends are interrupted by brief periods of recovery where prices temporarily rise. The name “dead cat bounce” is based on the notion that even a dead cat will bounce if it falls far enough and fast enough.
In his blog, Godbold writes:
“The buying probably caused the share price to move up. A little at first, but seeing the movement, others maybe started saying, “bitcoin’s moving” and more buying happened. And because of that, bitcoin went higher. And the higher it went, the more the momentum speculators piled in. And the more they piled in, the higher bitcoin moved.”
Godbold thinks that eventually, the speculators will run out of firepower, and when we reach that point, bitcoin is likely to plunge again. He adds;
“To me, the up-move looks pretty full, so bitcoin looks riskier than ever right now, and I wouldn’t touch it with a bargepole.”
It is of no surprise that this is the position Motley Fool decided to take as they are usually anti crypto. Later on in the article, he concedes to this point.
“But in fairness, I wouldn’t touch bitcoin with a bargepole wherever the price is. Instead, I think a much better opportunity for successful speculation and investment exists in shares and share-backed investments. I think the stock market is a far better vehicle for the potential generation of wealth than the world of cryptocurrencies.”