Crypto Market - Catching the falling knife or an opportunity for DCA
The crypto market is making me feel that I'm just catching a falling knife. During the previous bull run the price of Hive was over 1.5 $ for a very long time. That was when I really wanted to invest but the price of Hive was very high to invest. I did invest around 2000 $ back then on SPS and received only 2000 SPS but today I have close to 100k SPS and my SPS value is not even 1600 dollars.
This article is not to bad mouth the crypto market and my investments but a caution note to the investors to make sure they are not catching the falling knife because I did that. Whenever the price of Hive goes down I used to feel that it is a great opportunity and buy a lot of Hive. But when the price goes up, I wouldn't book my profits thinking that Hive might go further up and miss the bus. The price of Hive would then come back to what it was before.
About a year back I used to feel the price of Hive was very high and I couldn't make an investment. Today the price has improved so much making it the best buying opportunity but I'm still hesitant a little bit to purchase. For 40 cents Hive price, I already thought that it was a great opportunity and I already bought a lot of Hive. I liquidated all the HBD from savings and bought Hive for that. Now after looking at the price of Hive at 28 cents, it is so tempting but I don't have enough HBD to do it.
This is a great concept that many investors talk about. We shouldn't see this investment as catching a falling knife. For some people, this might be the case. I'm a good example of that but in a way, it is also DCA where my overall bought value would be very less when I make use of all the low-price opportunities. For some people, the bought price would be around 1$ for Hive and they have to wait for a long time to book their profits. But in my case, as I'm continuously buying whenever I have the opportunity, I would consider it as DCA and I will already be in a great position to book my profits if the price of Hive hits 50 or 60 cents.
I would say it would be beneficial only if I complete one cycle. I consider buying as the start of the cycle and continuous buying as part of the process and then waiting for the price to pump and then selling the holdings for a nice price and waiting for the price to go down again and then buying at the low price again. I consider this whole thing as a cycle and this is what will bring us success in any type of trading. Just watching the price move up and down is not going to give us any benefits.
Today I was recollecting my mindset a year back. We have been in a situation where the price of Hive was close to 17 and 19 cents. I personally bought Hive when the price was around 11 cents and it stayed there for a very long time. At the same time, I have also seen the price of Hive hitting 3 dollars and I was there watching it happen when it happened. Today I was comparing my mood during both occasions.
When the price was very low, my mood was like if I'm doing the right thing or not. I was only in a position where I have to sell and book some profits. It was right opposite of what I should be doing in a bear market. I compared it with the mood I had during the bull market when the price was around 1.5 dollars where I thought I missed the opportunity to buy when I saw Hive saying near 24 cents for a very long time. Today I see that opportunity to buy and I don't want to regret not buying Hive when the market recovers and the price of Hive reaches over 1 dollar again.
The most confusing part of the buying opportunity is if I should be purchasing Hive or if should I also focus on other coins as well. The reason is because the value of most of the coins is low and we know for a fact that it would recover for sure. I think investing everything in Hive is like putting all the eggs in the same basket but the Hive ecosystem is a place that I know very well and I know how it would behave for the market conditions, so I think this is the safe place for me comparatively.
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