My First Bear Market - Being wrong in a Bear Market is expensive
It´s been about a month since I first got rugged...
Can I call it rugged, I guess so. If you lend someone money and they don´t give it back you get rugged. Even if they have a disclaimer that they are not liable in case of Bankruptcy.
Yup, if you have been following me or the crypto space I am sure you now know that I am talking about Celsius. And even though they were able to pay off another $120 million towards their Bitcoin loan on Maker this week bringing its new liquidation to $4,966, nobody can access their funds yet.
I have definitely given up on seeing my funds back ever again. I wrote it off as just another Bear Market Lesson learned. BTW those bear market lessons are damn expensive so I will give you mine for free.
So lesson one is, it ain´t worth getting a couple of cents a week on a couple of hundred dollars if you don´t hold your own keys. These companies might have big names in the crypto space, but non of them have been around the blockchain more than once. So none of them have a trustworthy track record.
They might be having the best intentions, but after the recent purge making $5,00 dollars a year with the risk of not being able to retrieve $250 once the company decides to halt your withdrawals is never worth it in my opinion.
That brings me to rule #2.
Do not be lazy!
In the past, I was The Procrastinator. Now over time, I learned to kick myself in the butt, which is kinda hard, and do things before the deadline.
Still, it has bitten me in the ass twice already this bear run. Basically, I did not plan to hold that much crypto on Celsius, but my Noise and Read rewards did well and those were sent to the Celsius wallet. My plan was to move them to a safe place after hitting $100, but well you know how that goes....there is always tomorrow.
So when I finally planned on doing it it was close to $200. That coincided with the start of the Celsius FUD, but I was "ahh I will do it this weekend." And I did, but changing your Celsius whitelist address takes 24 hours. When Sunday came around I was a bit tired and thought.... there is always tomorrow.
Boy/Girl was I wrong. There was no more tomorrow, withdrawals were halted and I was F´ed.
In the Cycle We Trust
Of course, this may change next cycle, but keep your eye on where we are in the 4-year cycle. Personally I never really took a good look at where we were in the cycle, and in addition, I felt kinda sure we would see an extended cycle anyway.
Why did I believe that, well because influential people and I talk serious peeps no Youtube Moonboys were showing models that were in line with that idea. Plus the fact that I thought we did not do a 20x BTC yet during this cycle.
Wrong again!
There was no extended cycle and we did do a 20X this cycle. On the extended cycle, I can be short. That just did not happen and there can be millions of excuses, but for now, the facts point out that again it´s a true 4-year cycle no fake extensions.
Many expect this to change when more and more people enter the crypto-verse, which might be true but not yet, not this time (unfortunately). I do expect crypto to become less volatile if adoption increases, but my belief in extended cycles has definitely diminished.
Let´s leave the cycles for what they are (round thingies that can bite you in the butt) and let´s look at the thing we do have control over, data.
Not sure if it´s me, but I have been hearing way too many people say: "Nah, this cant be the top we only did 7-10x this cycle." So many that I started to believe that poo, until I did my own research. On 25 Feb 2019 BTC was at $3.400! If you twenty X that number you get 68K and that is scarry close to the BTC All-Time High.
If I had Known
If IU would have paid attention and trusted in the cycle would I have done something differently?
Bloody Yes I would have. Expecting one more up I started buying the dip slowly when we went below 50K, faster when we went below 40K, and I spend all my stable coins by 37K.
That 37k was in April and coincided with me figuring out there probably was no extension to the cycle. Now, if I would have paid attention I would have known that:
At the end of a cycle, the drop is about 80% from the ATH
That the bear market would take about a year
That in that year there are many opportunities to buy near the bottom
If I would have used that data and wanted to play it a bit safe like I tend to do. I would have waited till at least a 60% drop (27K BTC) and then start DCAing the dip like I do today (buy $100 for every $1000 BTC drops).
Now I was lucky to have some fiat on the side and not have to pend solely on my crypto earnings made during the bull season, so I can still do that. But those early investments cost me at least a 4K loss.
Don´t buy ALTs in a Bear Market
That loss was only on spending my stable coins too early, I guess my total drop from my personal ATH is twice as much. On the positive side, everything I was holding when I reached that personal ATH in Nov 2021 was pure profit.
Still buying the dip, the next dip, and seeing that we keep dipping was no fun, especially if you buy ALTs as I did. ALTs made me rich during the Bull run and I thought that with that extended cycle I would get one more chance.
Wrong Again, three strikes and this baby is out.
Buying ALTs at the start of a bear market is probably the worst thing I ever did. These coins go down so fast, we are not talking about catching falling knives, but trying to catch passing comets.
I hold several ALTs that are now worth 2000% less or more. which makes sense as ALTs can do an easy 20X up as well, so why no 20X down. They also take their time going down, often it takes several weeks for the ALT coin market to bottom out once BTC has bottomed out. They also lose value faster, even to ETH. Where BTC might lose another 30% still, there is a huge chance that ETH will lose 50%. If ETH will lose 50% low-cap alts might lose another 200%.
Bottom Line
When DCAing the bear market dip, focus on BTC till the bottom is in. Then wait for BTC to become dominant. Once BTC dominance is high start buying those blue-chip ALTs (top 30). Once those blue-cip ALTs are starting to see real recovery buy the low-cap ALTs.
Money flows top-down once the market recovers. From BTC to Blue-Chip and from Blue-Chip to Low-Caps.
As always Do Not take financial advice from a baby, but hitting the like button to show your appreciation is free!
Have a Lovely rest of your day!
Post Scriptum:
Places where I do Liquidity Mining and Staking
Cake DeFi. Here you have to invest $50 dollars and you get 30 dollars for free. You can withdraw your 50 dollars at any time or use them for Liquidity Mining, Staking, or lending to earn more DFI rewards. The 30 dollars is locked for 6 months but earning you interest for the 6 months. https://app.cakedefi.com/?ref=197670
Platforms where I Earn Crypto for my Content (Affiliate Links):
Torum - https://www.torum.com/?referral_code=bitcoinbaby
NoiseCash - https://noise.cash/u/BitcoinBaby
ReadCash - https://read.cash/r/BitcoinBaby
Hive - https://hiveonboard.com/?ref=whywhy
Peaked - https://peakd.com/register?ref=whywhy
Publish0x - https://www.publish0x.com?a=l9avg4xnbG
Exchanges where I trade Crypto (Affiliate Links):
BitVavo Exchange- European. Higher trading fees (0.25 %) & Great Customer Service - https://bitvavo.com/?a=C21A94C2FD
Kucoin Exchange - Hong Kong. Okay, trading fees (0.1 %) & Contains a lot of low cap gems. Customer Service takes time - https://www.kucoin.com/ucenter/signup?rcode=rJ821BX&lang=en_US&utm_source=friendInvite
Bitmart - Global (USA allowed) Low, trading fees if you use BMX (0.025 %) & Contains a wide variety of coins - https://www.bitmart.com/en?r=7XFCVy
Disclaimer
I do not have any connection with any company I am writing about. I am not being paid to write this article.
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