Patience is the key to digesting this volatility in Bitcoin
What a day it was in the Bitcoin world yesterday! I was driving from one city to another yesterday and could not post. Having been in the market for well over 4 years now and having seen many corrections (20% to 30% plus), it still took me some time to digest yesterday's sharp move. Of course, I have learnt to ignore the onset of a bear market and all the negativity from mainstream media, but yesterday's move was good enough to make me look at the charts once again.
On the 1 year timeframe, not much has changed. Bitcoin closed the day above 200 DMA and is still in the downward trending channel. The short term yellow support line has been broken through, but with RSI literally at an oversold level, one can expect that a local bottom has set in. The support around 200 DMA was strong and one can be assured that 200 DMA will act at strong support during this bull-run. In this post of mine from 2 weeks ago, I did mention that Bitcoin will head closer to $50k first before heading to $75k and higher. I was expecting Bitcoin to stay above $50k though. However, I ignored that when Bitcoin falls, it will close a lot of leveraged longs with it.
This is Bitcoin's chart for its entire existence -
The chart shows that there is strong support for Bitcoin between $20k and $30k. If anyone is worried after hearing these numbers, then I must highlight that anything is possible in this space. While I think that the probability of a further fall is low, a massive risk-off scenario can cause a lot of institutional money to pull away from this highly volatile space. To give you some comfort, I invested for the first time at ~$20k and then stayed on negative returns for almost 3 years. In this game, one has to be patient and be able to digest extreme volatility. Such volatility in any other market can destroy billion-dollar firms! Of course, that happens with leverage.
There is another chart that I want to share for context and I am borrowing it from someone else -
The above is a list of all the 30% plus corrections that happened during the 2017 bull run. This bull run will not be very different. If anything, it could be worse because now we have leveraged institutional capital in the space that is probably placing much larger bets.
The close above 200 DMA is extremely important from yesterday. Also, corrections are healthy as they take away a lot of the greed that builds up in this market. If you aren't a big trader and are investing for the long run, then invest small, take no leverage and Hold that bitcoin On for your Dear Life!
Greetings @karamyog.
I share with you the opinion that in the field of cryptocurrencies (Bitcoin), the one who despairs is the one who loses, because it can present a downward trend and if you run to sell because you are in the red the only thing you will get is loss, because it will return to its original course and will rise with a great momentum and can have great profits if you are not very urgent to get your investments.
True, long-term, bitcoin is still in a bull run and still seeing increased adoption. We are seeing an adoption curve with $ value for the first time.
Just like you said, patience is important to go through the inherent volatility in BTC. A friend of mine once said that "you can't go wrong while hodling BTC". So I guess we should just have patience.
Excellent read buddy. Thanks for sharing
that is very true. one cant go wrong holding btc
Greetings, I think that yesterday many people made a bad decision selling their BTC out of fear of the market, may that signal be false and continue its bull run, or may make the correction accumulate again and in 3 months the price reach 100k, selling out of fears or impulses are always going to be bad decisions that people have to face.
Sometimes people are in for the short term and therefore they have to sell quickly. But if one can hold, then they should, best to buy the dip.
Same thing happens with many traders. No matter how much volatility is there but if you have a patience, now or later you will definitely come out from that situation. Because holding BTC is overall beneficial. I trade sometimes and i think takig right entry and long term holding is the best thing. Keep sharing my friend. Thank you ..
true, trading responsibly is ok. i want people who take irresponsible risk to understand that getting wiped out in this space is easy.