Maria, my cousin and a single-mother of three who works two jobs, was beaming last month. She’d invested a big chunk of her savings, the money she’d planned to use to pay for her daughter’s college education, into Bitcoin. Not all of it, thankfully, but enough that she was bitingly and excitedly nervous. She viewed it as her chance to get on top. It was an opportunity to realize her dreams and create a better life for not only her daughter, but for herself. She’s not alone. Millions of average Americans are being wooed by crypto, seduced by the allure of get-rich-quick schemes and the notion of financial freedom.
So what does it mean when the Bitcoin dream suddenly runs into reality? Specifically, an $85,000 wall?
Is Bitcoin Truly for Everyone?
Here’s the thing — that $85,000 mark isn’t some arbitrary number. As per Advocates analyst suggestion shakes, it’s where the lower limit of the Ichimoku Cloud is located. The what-now cloud? Fibonacci retracement levels are a popular technical indicator among traders used to identify possible future resistance levels, price levels at which the asset finds it difficult to breach above. They further pinpoint support levels, where the price is likely to rebound. Consider it a protective force field that Bitcoin has to break through to continue its upward trajectory.
CoinDesk analyst Omkar Godbole notes this cloud has been a hard ceiling to breakthrough since February. Here’s the kicker: if Bitcoin can’t decisively break through this barrier, we could see a significant sell-off.
Now, do you know who tends to get hit hardest in a sell-off? It’s not the institutional investors, the hedge funds, or the crypto whales, as they can be called, swimming in their digital riches. It’s Maria. It’s the single parents, the young professionals, the retirees who’ve poured their hard-earned savings into the dream of crypto wealth. They’re usually the last ones in, but the first ones out when the market goes bad.
Poor Risk-Reward Ratio: Danger Ahead?
Not to mention the fact that risk-reward ratio is extremely poor at the moment, as Godbole points out. Resistance is at $85,000 and support drops all the way down to $75,000. This makes for a great limited potential upside, but a huge potential downside. If you purchase Bitcoin around $85,000 and it is rejected, you can be faced with a 10%+ downside. Now picture Maria losing 10% of her investment in her college fund in a single week. Devastating, right?
Think of it like this: you're standing near the edge of a cliff. The scenery is incredible, but take one misstep and you’re rolling down a cliff. The benefit (that beautiful view) is not worth the cost (dying from falling off the cliff).
- Risk: Potential 10%+ price drop
- Reward: Limited upside until $90,000+ breakout
This isn't to say Bitcoin is doomed. A clear break above $90,000 might trigger a fresh rally. But until then, the risk is wildly disproportionate against the everyday investor.
Crypto Regulation Needed To Protect Us
Here's where the "unexpected connection" comes in. To many Americans, the crypto market—with its unpredictable booms and busts, and unclear market-making and trading practices—definitely comes off as the Wild West of finance. Remember the 2008 financial crisis? That’s because the absence of regulation enabled dangerous and predatory practices to go unchecked, culminating in an unprecedented economic disaster for millions of everyday Americans. Are we thus sleepwalking into a remake of the crypto debacle?
I'm not saying Bitcoin is inherently bad. The underlying technology has incredible potential. The current regulatory environment, which allows for manipulation and is bereft of meaningful investor protection, is a recipe for disaster. We call for increased transparency and regulation. This transparency is important to establish a level playing field where the average investor isn’t left holding the bag when the whales decide to sell.
We need to ask ourselves a tough question: Is the current crypto landscape truly democratic, or is it just another system rigged in favor of the wealthy and powerful?
Maria, like every child growing up today, deserves a fair shot at building a better future. So do you. Before you jump into the crypto pool, spend a little time educating yourself. Know what you’re stepping into, and invest only what you can afford to lose. The American Bitcoin dream is not dead yet, but go slow on the hype. Your financial future depends on it.
