Don't Let Bitcoin Fool You
Crypto bear markets will play games with your mind. Prices quickly fall to levels you never thought Bitcoin would ever reach again. From that point, prices go sideways for an exhausting length of time. Causing price action to become so boring that many become apathetic and lose interest in the market. Then, all of a sudden the tide of the market changes. Bitcoin moves back up to those extremely bearish levels that you were dreading just a few months ago, but now you're feeling bullish. You start to feel FOMO and believe that maybe there is hope of the market recovering. In reality, we have continued to be stuck within the same range like a game of pinball. With the price of rattling back and force in each direction just long enough to get your money. Most of us probably have the same goal; to accumulate as much Bitcoin and crypto as we possibly can. In order to do that we must first have full emotional control over our minds, which is our biggest weakness.
Humans are emotional beings and there are few things that we are more emotional about than money. In the Bitcoin market that is compounded even further. A large reason for that is due to how volatile the market is. Upwards and downwards movements of 10% or more in the crypto market is called a Monday, while in other markets it would be a day that is remembered for years. Gaining or losing 10% on your portfolio in a day will make even the best of us feel some sort of emotion.
Another reason is that people often feel more attached to Bitcoin and crypto than they do with regular money. Perhaps the reason for that is people are really fans of the tech or philosophy behind it. They feel like they are part of a movement that will change the world. Or maybe, we have all been told that the largest transfer of wealth that the world has ever seen will be taking place and those who own significant amounts of crypto will be rewarded. This has caused many of us to become obsessive accumulators and even borderline hoarders. That this will be our chance to finally obtain financial freedom and we need to accumulate as much as we possibly can before prices get out of hand.
Perhaps it is a combination of all of these reasons, and even some that I didn't mention.
The key point is this. When humans become more emotional, they tend to make more impulsive decisions without putting as much thought into them. This is exactly what happens with Bitcoin as well. Often times with Bitcoin, users will make those impulsive decisions that result in them causing self-inflicted wounds. They have become their own worst enemy. Outside of the current macro situation, this is always what has caused the markets to go through bull and bear markets. During times of FUD or general negativity in the market, people begin to get dancing feet. Meaning that they feel that they can't stand still. They need to act and preserve their wealth while they still can. These people sell their Bitcoin, even if it's a price much lower than they initially paid. Buying high, and selling low.
This causes an avalanche effect that also causes other users to sell who either don't have conviction, have too short of a time frame, or have invested too much into the market to panic. Which results in the price dropping further than most expected.
During bullish times this also works similarly. People get caught up in the latest big news announcement, the prospects of becoming rich, seeing how much money their friends have made, and then buy back into the market. Often, it is those very same people who capitulated and sold out of the market just a few months ago that will buy back at higher prices. This is what signals the bottom and starts the next upward movement in the market.
Now let's look at the current price action for Bitcoin. Since the summer of chaos when 3AC, Celsius, Voyager, and several other crypto companies would become insolvent. The price has been in the range of $18k to about $21k on average. When the price veers towards the bottom of that range, people become extremely bearish and spread the word that Bitcoin is finished and that we will definitely see prices of $13k very soon. On the other hand, when prices rattle near the top of that price range, which is where we are today. People then begin to see light at the end of the tunnel. Beginning to think that perhaps the market is recovering and that prices could soon hit $30k or more.
If you pay attention to cryptocurrency influencers on Twitter, YouTube, news articles, or anywhere on the internet you will probably been able to feel these mood shifts. The most important tool that you need to have success in the cryptocurrency market is to have control over your mind and emotions. If you don't, it will make holding on to coins until they eventually reach moon prices almost impossible. There will be no worse feeling than looking back ten years from now and seeing coins that you previously owned go to unimaginable prices. Amounts that would have changed your life and made you extremely wealthy. Instead, you decided to sell because there was a stretch of 5 months where prices were bearish and boring. That would be a regret that many of us would never be able to forget.
To avoid this, put in the research before you buy crypto. Find projects that you are truly excited about and have conviction in. Don't use money that you can not afford to lose. Buy, set it, and forget it. Continue to do this for ten years and it might just end up being the best thing that you ever did.
As always, thank you for reading!
Now let's look at the current price action for Bitcoin. Since the summer of chaos when 3AC, Celsius, Voyager, and several other crypto companies would become insolvent. Great information you have given to us here thanks