Perfect Time to Buy Bitcoin and Other Crypto Currencies

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

'- Warren Buffet

After hitting $5,000 on September 1st, massive sell-off ensued for bitcoin - the mother of all cryptos. Consequently, all other cryptos followed suit. Turns out, $5,000 was “marked” for profit taking by “sophisticated” investors.

This is not unusual though nor unexpected. When bitcoin hit $3,000, similar thing happened - bitcoin lost a third of its price (Ethereum lost about 2/3). With this in mind, the next few days would be the perfect time to invest in not only bitcoin but also other cryptocurrencies.

History may repeat itself or may rhyme

So what’s the right entry point for bitcoin? If it repeats the June 11 high and July 16 bottom, the price of bitcoin will drop to around $3,333 from its $5,000 high. Otherwise, the bottom could be between 3,800 to 4,200 range. Please be warned though that chasing the perfect bottom is a wild goose chase and it often leads to disappointment. Aim for “good enough” rather than perfection.

Technical Analysis – 1-2-3 pattern?

It remains to be seen if bitcoin will follow this pattern. Rarely does history repeats itself in perfect alignment but this play is still in the cards. Don’t let hope glue you to this pattern though. Rather, use this as a measuring stick to determine your entry point. It’s easier for a tailor to cut a perfect suit following a pattern and adjusting as he goes.

The Psychology of Stock Investing

While bitcoin is not really a stock, the same investing rules apply. In stock investing, there are these three enemies that people often confuse as allies – hope, fear and greed. When bitcoin was approaching $3,000 in early June, a lot of investors jumped to join the bandwagon hoping that it would rise even more for them to make a killing. When it turned south dropping to below $2,500 however, panic strikes and many scrambled to sell, only to be disappointed when it rose again after bottoming at $2,000.

To increase your odds of winning, change your mindset – buy when people are selling and sell when people are buying. And don’t let “hope” change your mind!

Wish you all luck and have fun trading!