Dear Hodlers,
Bearish post in a bullish phase. I'm expecting downvotes, but I am happy to have them if it means I can give wisdom to 1 or 2 people. In this post, I wanted to list a few things to be mindful of when entering what could be one of the craziest weeks of price action we have seen in a few years.
I want to preface my points by saying, I have been, and still am, a HODLER of BTC and other cryptos for many years and have also been burnt in the past and seen significant portfolios dwindle because I didn't take profits when so many fundamentals were screaming at me to do so. I'm not a professional. However, I have a strong passion for trading and love all Bitcoin, and the broader crypto community is looking to achieve.
Here are my thoughts moving forward:
- Buy the hype, sell the news. Coinbase listing & futures. These two events have been equally as significant as the recent news of a US Futures Bitcoin ETF, which is looking likely to go ahead this coming week. When previously mentioned events occurred, the price has often risen the weeks prior (buying into the hype) and crashed the day or days later after the news hits and is confirmed.
- As Warren Buffett said, "Be fearful when others are greedy". It takes one search of Bitcoin on YouTube to see the sheer number of green arrows, bulls, and shocked faces at present to action/consider this advice. More so, the BTC fear/greed index is at a point where rejection/price correction has occurred seven times over the last year. See the following link: https://ibb.co/Fwz5fRk. I've overlayed the one-year BTC price and the fear greed index. The white lines represent times the price hasn't blown through this point and instead rebounded or consolidated, resulting in a decent drop in price (>15%).
- Bitcoin IS overbought from a technical analysis view. I think that's pretty clear to everyone. Most indicators have been screaming for a reversal. We all know that BTC ignores indicators in true euphoric bull runs and respects them when simply rising in price, reversing close to when it should. At this stage, Bitcoin keeps being bitcoin and is going against all the bears claiming 20K incoming.
- Nothing is linear. Price has been too euphoric. Bitcoin and all assets like to retrace. It's essential for the longevity of a bull run. Since the 25th of September, the price hasn't retraced >~7% from high to low. It's relatively uncommon, especially with the greater than average volume we have seen since this date.
- Finally, Evergrande. As much as we like to think that BTC isn't tied to traditional markets, it is. I'm not going to lecture you about what's happening. If you don't know what I mean by simply stating, Evergrande, google it and read. It hasn't gone away and isn't any time soon. It could heavily impact this euphoric run we are experiencing if the broader traditional market were to tank.
As much as I'd love to give you the pipedream that we're going to surpass ATH and go the moon from here, I've been led by my emotions so many times in times like this and wanted to give (what I hope) are some wise words of advice.
Stay safe out there, family <3
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