The market is trying to tell us something. It’s a warning.
On August 25, there was huge selloff of BCC from recent highs. There is a bit of speculation about the reason why but none of seems to be particularly convincing. Even if you put all the speculation aside and just look at BitConnect chart from a Technical Analysis perspective this selloff looks like the first shock…and it is not likely to be the last. Have a quick look the chart from coinmarketcap.com :-
The thing about Technical Analysis and market shocks like these is they actually create more fear and doubt for holders, making it even more likely to sustain further shocks – it is self-reinforcing. The speed and severity of the shock alone gives an indicator of just how quickly and severe BitConnect could go down if there is a fresh wave of panic selling.
Now when you put the Technical Analysis into context of the Fundamental Analysis of this coin….well holders have bloody good reason to be concerned. This coin promises a guaranteed profit and supposedly is adding value via a trading bot. Any investment that promises a guaranteed profit should be raising a red flag because there is no such thing as a guaranteed profit.
I won’t go into it in detail as plenty of others have, but it is my sincere belief that BitConnect is the largest ponzi scheme currently in the crypto space with a market cap (at time of writing) at more than $777 million USD. This post is not about spreading FUD, it’s about trying to serve the public interest and warn people!
Now a lot of people like to throw the Ponzi claim around about a lot of cryptos (if not all of them) but it is a particular type of scam, defined by dictionary.com as :-
“a fraudulent investment operation that pays quick returns to initial contributors using money from subsequent contributors rather than profit”
To me BitConnect fits that description down to the ground, but that's just my opinion.
The thing about Ponzi schemes is that when confidence in them falters, they collapse like a house of cards. In BitConnects case it would look like a crypto coin that has dropped to $0.
Let’s have a quick look at the price chart on the bitconnect.co website for the last week :-
I should point out that this “internal” exchange accounts for about 85-90% of the traded volume for BCC. It’s interesting isn’t it. It’s a bit like the price shock didn’t happen, possibly because the site was down. Considering this exchange has nearly all of the volume for the coin this might be what it looks like in the end – a site that goes down and just never comes back.
Now go back and have another look at that first chart….
If you’re still holding this coin then count your blessings that it has had a bounce and you are getting another chance to bail at a decent price. Markets will often give you a second chance but don’t count on getting a third.
DISCLAIMER - Information provided in this post is general in nature and does not constitute financial advice.