Have you guys managed to get your breath back yet?
This has been one insane day in crypto which I will never forget. We broke a landmark historic figure in Bitcoin. Bringing the continuous, relentless surge in the digital market leader up to the five figure mark before experiencing some sort of correction which is happening as I literally type this up. Not for the faint of heart, I’m sure you’ll agree.
So what next?
Here are a few of my personal thoughts on the “probabilities” instead of “possibilities” regarding future prospects. We have been in a BTC bull market for quite some time now. In fact, pretty much non-stop from mid-September. Now, the question on everyone’s lips is… “How long can this sustained rally keep going up?”
Well, we have a few variables to take into consideration. The first being demand. In terms of cryptocurrency, this will always be a key factor to how price will behave, regardless of any technical analysis or fundamental basis. Mass adaption is around the corner. There seems to be little doubt of that given the explosive year we're just about to finish on. Not only for Bitcoin but for cryptocurrencies in general. Those that laughed at us upon first hearing about this new “digital form of transacting money” are now most likely glued to their computer screens, desperate to get in on the action and find out more information. More fool them, I say. An open mind is a great mind. Short story, the bigger picture we've all envisaged is well and truly on it’s way. So that leaves the relatively safe assumption that BTC (having first move advantage) will carry on rising over the coming months and years. In fact, few would argue with this statement given the historical data we now have to work with.
However a chart correction, in any market out there, usually constitutes a sign of good health. So, it just stands to reason that we cannot simply keep rising all the way to a million (oops, did I just say that? Lol... ). And depending on today’s closing daily candle being a long tail wick with a thin body at the bottom(refer to the screengrab above), this could signify a short to medium term downtrend on the horizon. Again, nothing to worry about in the longer term mind. I just get the feeling that the crypto market as a whole is getting a little too heated at present.
Also, being a trader for a number of years now, I’ve observed that when there comes a major shift in market sentiment, you get these fierce, wild swings either way. Almost as if there is a huge invisible tug-of-war taking place behind the scenes. And the market price action of today appears to show just that. Massive volatile swings either way like a serious market shake-out. Albeit, this pattern is not set in stone but I’ve witnessed it enough times to realise that it is a phenomenon not to be ignored.
So, let’s say this is all true and we are indeed due for this correction that could last anywhere from a week to a few months. Do we sell what we have to buy in at a lower level? Take this as an opportunity to gather some more of those precious coins to add to our treasured, private stash? I would say an affirmative “NO”. There’s a popular saying that goes like this.
“The markets will remain irrational longer than you will remain solvent”.
Simply put, this means that whatever reasoning or analytics you apply to your decision for buying or selling, the market will never give you a 100% predictable outcome 100% of the time. Especially when attempting to day trade crypto, the market will inevitably wrong foot us and our emotional baggage kicks in, causing us to further propagate our mistakes. And the end result could spell some very real and painful damage to our digital wallets.
So, I suggest if you want to gain from an impending downturn, buy-in gradually as the price recedes. If you believe Bitcoin will ultimately go up (which I’m sure most of us here would agree with) then the last thing you want to do is try and catch the lowest price point, just to have it shoot back up and you waiting for it to return back to your target spot. Just look at Bitcoin’s past performance. I hope you agree with me when I say, that is one dangerous game of cat-and-mouse best stayed away from.
I believe it is best to stay invested and simply view any downtrend as an “opportunity” instead of a “tragedy”.
So, those were just a few of my personal thoughts on today’s crazy activities. It is nearly impossible to accurately predict where Bitcoin will be on a daily basis, never mind next week or month. But what we "can" do is safeguard our actions by implementing a logical, sound strategy and sticking to it. It's done me fine over the years and I'm sure will prove the same for you. Therefore, I'm putting my money where my mouth is and will be following the above guidelines to a tee.
What will you be doing I wonder, my steemian buddies?
Would love to find out…
@ezzy