Lessons from the past - what to do with the current bitcoin slumpsteemCreated with Sketch.

in #bitcoin3 years ago (edited)

While I am writing this, the bitcoin price is down 25% in a day, making it the 7th worst daily loss since mid 2010.
Coming from a new alltime high just a few days ago with lots of new investor having jumped on the band waggon recently, a lot of people are likely to feel a lot of pain right now, asking themselves what to do.

While I will not give you any advice what to do as this will be largely dependant on everybody's own personal and financial situation, let's put things in a historical perspective.

As said, the slump today is the 7th worst in 7 years.
bitcoin-3014614_1280.jpg
If you would have invested at any of the days which had been worst than today, you would have earned on average: 28% - you could thus interpret this as a sign that chances for a short term recovery are good.

If you would have invested at each of the 6 days worse than today and held for exactly 50 days, you would have on average made 52%. This is however worse than the average 50 day return of 83% since 2010. This is due to the fact that historically such a steep downturn came with more trouble later on.

This becomes also visible when looking at the 100 return for these 6 miserable days. This was on average 70% vs 233% on an average day since 2010.

I will thus not buy yet but wait for prices coming down more.

Please do your own research.

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General Electric is in a similar slump stock-wise. The company is great, bringing in revenue, turning a profit, but the stock keeps going lower. One of the finance shows actually asked, "How low can GE go?"

And now we're seeing something similar in Bitcoin. The people that bought like crazy when it was high? They're feeling the burn. They didn't watch School House Rock when they were younger...

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