The bitcoin price action has been acting quite odd the last few weeks and the market has become dangerous. That is of course only if you are trading with leverage or have taken out loans using your crypto as collateral. Yes, it is true that the markets have always been volatile, but they have become even more so the last few weeks. It is becoming clearer and clearer that whales are playing games with us all right now and doing their absolute best to liquidate as many people as possible before we see the next price movement. We have relatively been chopping sideways and little down in price throughout the entire month of November. Bitcoin has always been volatile, but in the past typically that volatility would only move in one direction. Either upwards or downwards. But recently there have been single candles where the price of bitcoin dips extremely fast and pumps up even faster in the same candle.
It is obvious that whales are trying to liquid both people who have set shorts and also those have set long trades. Which means that it is an incredibly dangerous time to be making any leveraged trades of any sort. The skills need to trade and read charts have been thrown out the window, and now it is just a game of trying to be lucky.
So what can you do?
It will sound like extremely basic information that you should all know already, but the best thing that you can do is just continuing to "Stack Sats" and dollar cost average into bitcoin. Remember, being into bitcoin or any other crypto for that matter, for the short-term is a risky venture. We have all been told that we need to have a long-term view with bitcoin. After all, remember that if you are able to accumulate around 0.28 BTC; you will rank among the top 1% of bitcoin holders. Still, with that amount of bitcoin in the short-term, that will not make you rich. But, if you take a long-term approach lasting 5, 10, 15 or more years. That 0.28 BTC might become something that will potentially make you rich, or at the very least become a very nice nest egg. The prediction here will vary by just how bullish you are about bitcoin.
But with volatility, especially to the downside, emotions can be difficult to control. Over the last few weeks bitcoin has gone from a new all-time high price of $69k, now down to around $56-57k. A drop of around $12k. If I told you how much my portfolio dropped in dollar terms during this dip, it would be enough to make a person depressed and highly consider selling their position. Something that many people went through during the summer dips. To this I say; always remember that you shouldn't be investing more than you can afford to lose. Especially into something volatile like bitcoin. If the price drops have such a large affect on you that you are becoming depressed, emotional, afraid you won't be able to pay your bills, can't sleep and are stressed out. That probably means that you have too much of your own net work wrapped up into cryptocurrency. Remember that everyone's situation is different. People's level for stress tolerance and also their salary will all differ. You don't need to be trying to "keep up with the Jones'" and trying to outmatch people. Trying to get rich as quickly as possible is a recipe for failure. Stay humble, stack sats and play the long game, building a great financial foundation.
So now you know what is happening and what you should do. But why are the whales playing these games with the bitcoin price?
The obvious reason is that they see an opportunity to make money and accumulate more bitcoin. But there is possibly more that is happening. We tend to see this volatile price action right before major price movement happens. Also it has been noted that right now bitcoin miners and whales have all been accumulating rather than selling. This is another sign that points to a potential price movement upwards. And lastly, the end of the year is coming upon us. Now that last sentence may not have much of any affect on this. But, the end of 2021 has long been said to be the time when things become very exciting. That often begins arounds Thanksgiving time. Of course, this year has been unlike any that we have seen before. It is even debatable that the bull run had already ended in May, with a summer bear market that once again changed into a bull market in October.
Either way, this market is fascinating and I wake up every day excited to see what will happen. There is no other industry like this. I will be honest, I thought the price would be higher today than it is. But this bull market could be extended longer than any of us expected.
What do you think of the recent bitcoin price volatility? What is your end of year bitcoin price prediction?
As always, thank you for reading!
For me, Bitcoin, and any other crypto for that matter, continues to be difficult for me to "valuate." I cannot apply the same principles to it that I can apply to stocks, because of course they are very, very different things.
All I can do at the end of the day is watch things closely, get a good feel for future direction, and continue to invest a little here and little there, taking profits on the pumps where it is appropriate to do so, and continue to increase my staking also where it is appropriate to do so.
Of course I tend to think that ultimately the price of any coin is higher tomorrow than today, otherwise why else would I invest in it, right?
That all said, the one coin, if there is any coin that gain widespread adoption, and that I think has the most utility ultimately, I think it's BCH over BTC. But that's just my opinion. It may be a silly analogy, but I think back to the days of the competition between VHS and Beta and Blu-Ray vs. DVDs. What has the better "idea" does not always make it, being overtaken by the thing that is more practical. I think BCH is more practical, and so for that reason BCH continues to dominate my portfolio. In fact, BTC is 3rd in position in my portfolio currently.
At the end of the day I think you give sage advice. Invest what you can afford, HODL as much as you can, accumulate where it makes sense to do so, and just ride whatever wave happens to be the wave of the day.