Bitcoin: The Greater Fool Theory....are you the Greater Fool?
Here is a daily chart of Bitcoin. Can you notice the needle point like price spike towards wave 5? Not bullish! This is an exhaustion type of buying spree.
The greater fool theory always executes at the extremes of MACD lows and highs. The below chart shows these high (dotted green) and low (dotted red) circles. During the MACD highs, many want to buy thinking prices will keep going higher; rather it's time to sell. Vice versa for the MACD lows. In other words, The Greater Fools are always driven by two emotions: GREED & FEAR. Many in cryptoland call it FOMO (Fear of Missing Out) and FOMO embodies fear and greed since it plays out during the highs and lows of prices.
At today's level of MACD....is it time to be taking buying actions or sell action? The @haejin algorithm is pounding the table warning that NOW IS NOT THE TIME TO BE TAKING BUYING ACTIONS.....IT'S TIME TO TAKE SELL ACTIONS!!!! If you take buying actions at current prices, then you are hoping for a greater fool to buy at higher levels than yours and thus giving into the greed emotion or FOMO. This is not discipline. This is why discipline is needed to buy when others are selling and sell when others are buying. We are at the latter type.
Can prices go higher? Yes! But I have already taken much of my Bitcoin profits as I bought at the most recent dotted red circle area and had accurately called that bottom in a prior blog post. On my equity calls, many have jeered at me for shouting SELL when all were buying and shouting BUY when all were selling. I would expect some jeers, polite or vulgar, as a confirmation of the sentiment. I try to be humble and gratefully take the profits on my table with no regard to lost potential if prices go higher a bit.
This is very true at current circumstances:
DO NOT BE THE GREATER FOOL!
If this blog post has entertained or helped you to profit, please follow, upvote, resteem and/or consider buying me a beer:
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Legal Mumbo Jumbo: This is only my opinion, make of it what you wish.
Thanks for sharing
I be followed your last few posts on btc with interest. I ageee we could be looking at a potential correction but I still fully support bitcoin long term. Therefore I have decided to take some profits whilst leaving an amount invested. If we suffer a drop, I'll look at buying back in at lower levels. If we push on without a break, I will not have lost the opportunity!
Very smart! I have 1/3 of my bitcoin and altcoins targeted for sale to take profit and raise cash for better prices.
UPVOTED. very good. I would be happy if you like to follow me and give your opinion about my posts. Thanks
Thanks!
The young lady wanting to meet a man with $500k salary.....hmm, she got a mature response from the JPM fellow!
When I first started out on this journey, I was the greater fool. It's not a mistake I will make again. Meditation, discipline and patience is required to control your emotional state.
I was a greater fool many times over my 15+ years of experience and it's always greed and fear. These two emotions drive the supply and demand. This is why I use my laddering buys/sells to remove as much emotion as possible. So having a method that works for you is key. Here is my laddering blog: https://steemit.com/bitcoin/@haejin/bitcoin-cash-entry-laddered-buy-points
Great post it´s allways good to know about this things! Im following you ! Resteeming this to my followers. Hope it helps a little.
Thank you for the read and follow and resteem!
Good Morning Haejin, Not sure if I agree with You, but I find Your technical analysis interesting for a few reasons...
In my almost 40 years of using TA, have never really fully understood Elliot Wave and am not sure if it really works BECAUSE many EW's will change their wave count when their past EW counts are proven incorrect.
Generally speaking, I am really interested in reading Your prospective on TA, like this particular Post... though I'm not sure if I agree or disagree with Your conclusion on this post regarding Bitcoin.
Although in this Post You are using MACD to predict Bitcoin's price movement... I'm really not sure if I agree but am certainly willing to be wrong, if You are proven to be correct about Bitcoin's near time price movement downward... HOW much lower do You expect Bitcoin to go AND is this lower Bitcoin price give You an actual price level and how long this will take for Bitcoin to go lower and then turn around to go back up ?
Thank You Haejin for responding back to these questions and look forward to more of Your Posts...
Of course, Time will Tell relatively soon about Your price prediction of Bitcoin AND I am willing to learn from You or anyone that is proven correct.
Hope You are having a Good Weekend Haejin... Cheers !!
I appreciate your thoughful insights!
#1: So, what method do you use that doesn't re-assess? I've never come across one and would love to learn. Also, tons of failure experience helps to minimize the number of re-assessed EW counts. Some EW technicians are good and some are bad and some are very talented. Just like music. As a Cellist, i see some very talented (yoyo ma) and others not so (not to be named). It's same with wealth...some are rich and others are not and some are middle class...usually dependent on their ability to earn.
#2. Thanks for your read!
#3 Here is the longer term EW count I'm using for now. Yes, for now, as nothing is perfect and impefection always needs improvements with re-assessed changes. We are currently heading towards and perhaps finishing Wave III.
#4. Someday, I'd love to retire and live in a Catameran! My favorite boat!
#5 when you chart a sailboat, how often does your course get adjusted? Same for my TA analysis.
#6. My laddered buy/sell method has helped to encompass the best ranges but also remove as much emotion as possible. I've posted on this laddering in past blogs. How often I used to buy in a single transaction and only to see prices fall lower than my buy point. This has significant emotional and psych impacts. So, for me, laddering works very well.
Hi Haejin, Sorry for my delayed reply.
My feelings are You have spent many years learning how to assess & reassess Your technical analysis methodologies.
Your laddered approach is excellent and I do the same for both entrance & exits from positions, especially in the case with NEO recently, as it was moving upward very fast at times. (( Still have a very significant core holding of NEO... smilesss ))
I believe You will reach Your goal and be able to buy a Catamaran... it's a great boat to live on, especially in the Caribbean !!... AND I believe Your dream to retire on one is much closer than You might imagine. These markets are going to be much higher in the next 3-5 years... HODL the Good Coins... >> : ~ ))
(( When You are ready to begin looking for a sailboat, contact me, I know many people in Florida and believe I can offer You some excellent guidance... AND help You get a very good price on a Catamaran !! ))
Thank You for Your ongoing & continuing analytical Posts.
Cheers !!
Or don't day trade as a solution to emotion. Investor's don't day trade
Investors also sell....how is that decision made? Sell at the bottom or top?
thanks. great analysis. it does appear to be at a top for now, with a possibility of going back to around the $1200 -level . what a great opportunity 1000 to 1200 dollar bitcoin will be. followed
I'm raising cash by selling 1/3 of Bitcoins and Alts.