Topic: My take on the market (Read 623 times)

You guys saw it yesterday, 41k USD was held and today 42k close to 43k is being reached. This is a gradual correction happening. But with weak hands still trying to sell at these levels, it will take some to cross back to 45k.

Dont read too much my man. I mean do read, but read some good work of fiction and not the shit that is posted on the internet.

The stuff that gets written on youtube (spoken I mean) and social media is just Teleology and not professionally done analysis. Just observe support/resistance levels and place orders according to them. Your point is just to make the profit from the oscillations between them.

You are right and it is something very logical, but sometimes those things that turn out to be so elementary or so logical that they are easy to see, sometimes one gets stuck and does not see anything, sometimes that happens to me, and that is why I read the different forms to think that many people around the world have and when reading and reflecting on these ways of thinking it is as if the brain received many panoramas of the immense possibilities that the market has to do and yes, there is always much more clarity, especially for omar a decision.

Honestly, I feel the same way as you if I search for "bitcoin" On youtube, almost all the content they convey is weightless. Yes they don't seem to really know about bitcoin, but what they are really looking for is adsense. But not a few people believe what they say.
But apart from that, there is still one channel that I like to watch, and I think this youtube channel that I watch is enough to give me knowledge.

It's hard to tell how the market will behave near 40k level. Although the resistance is quite strong at this level but we never know the game plan of the whales.
On the downside, 30k is a very good level of support and 99% the price will hold at this level. How if 30k is tested multiple times, then again this support can become weak.

After every bull-bear trend that starts with a sudden high or low there comes in a correction phase and a confusion phase, correction happened to drive the price back to 34-35k USD and now the confusion state as to some people selling while others buying making the price bounce between 36-38k USD. So it is not just you who is confused.

From this level both up and down is possible depending on which trend is triggered by the biggest movement in volume. I think quick flippers are the ones who make the most in this time period while long term buyers wait it out - you dont want to end up buying/selling at the wrong direction at this time.

A safer bet to buy is around 30k and sell at 40k or above. But this somewhat stagnancy might remain for this weekend before bigger movement occurs. Even the 30% crypto taxation news in India did not make much impact on this.

Great explanation, very thorough and detailed. As someone who has accomplished a decent sum of money, by simply forgetting about his wallet and moving on, I fully agree. Sometimes, despite Bitcoin performing well, there are other factors that not only affect Bitcoin, but the whole economy itself, such as the stock market. There are indexes that are closely related with cryptocurrencies, whether we like it or not. First and foremost, there are many whales who have joined the cryptocurrency scene, holding significant amounts of Bitcoin, and trust me, they are likely to be present in the stock market too.

Moreover, with the economy being at a state of depression, it's not surprising to see cryptocurrencies falling, after all, it would be astounding if they didn't, but that's way too unrealistic.

The truth is that for me the movements of the market are not very clear, because these are the moments where at least I am out of the market because I do not have a clear idea of what movement can occur, if the price goes up or down, the truth is, do so analysis and come to a conclusion I do not feel very sure, at least from what I have seen is that the price of BTC has already bottomed out at the $30k levels, and it is a good floor for it to push forward, my perception long-term market remains bullish.

Holding at this time of the bear market is better with stable coins which is of advantage, to reduce the fear of losing everything.
This truly is the very right time to buy the lows and wait for the price return for a new ATH, cause this is certain, just that one can't really tell when it will be . That not being the case, a proper preparation for the market swing in price movement, setting all needful parameters ready is one right thing to do now. I think buying more of Bitcoin Satoshi is and will be more profitable this time, though ETH will have it's own moves, and some other coins like BNB, SOL. Bitcoin will be giving more profits (positively) in every shot price movement.
For those who are scared of lossing everything, the best option is to put your assets on the stable coins to be at the safe side, so you can easily switch into the market when the bull run starts again.

Bitcoin-Nasdaq correlation is at all time high. Maybe not all stocks are linked to BTC, but tech stocks are for sure. BTC had it bounce back while indexes fell 2 days back, but that's because it had corrected much more and came close to the point of mining cost. It's not easy to make bitcoin run below the cost of mining. It happened before, but we always had fast bounces above when miners refused to sell at a loss.


And their headlines are hilarious.
"Bitcoin bloodbath, get ready for maximum pain" "bear market confirmed, it's over for bitcoin" and the same people 2 months later were saying to buy bitcoin for 60k and not miss out on the opportunity of a lifetime
I'm disappointed by most youtube channels. They claim to know what's going on, claim to be crypto enthusiasts, yet every time the price moves they amplify the market sentiment by running around like headless chickens.

Actually, in 2 years we'll be very close to another halving and this usually works wonders for Bitcoin. The negativity rarely drags on for more than 6 months. Just wait until 1h chart moves forward so much that the November/December drops won't fit on people's screens and they'll act like it was never there

I agree, it's always known for bitcoin that has the possibility to decline even just after the recovery. We just have to be open with all the possibilities and if we're already in this market for years, it's not surprising if it goes recover so fast and goes back to the price that we're wanting or go the opposite and starts to drop again.

I think of it as a fast recovery, we're almost there but yeah as usual it has fallen again. It's $38k that was reached yesterday and didn't got to $39k and $40k. I've thought that it would be that easy but yeah, it may take time but hopefully just like how it got to $36k-$38k that fast, the same could go on.

That's nice if you've managed to keep your bitcoins and don't have to sell it, unlike on my situation before, it's just all about the thought that we'd probably reached the peak and I have the urgency to do it just for the sake profits but nevertheless, it's the opposite that has happened.

This post is indeed meat in due season. Thank you for taking out your time to put the out there. There is so much insights on how the market operates and why it’s reacting the way it is.

I've searched on Youtube by using the keyword "bitcoin" yesterday and the results were hilarious.
All those clickbait videos with crazy thumbnails and all that overreaction and attention seeking.
All the bombastic headlines,like "You'll be shocked,If I tell you the truth about the current Bitcoin price crash!"
As if all those clowns and idiots on Youtube know the real reasons behind Bitcoin price drops.
Anyway,you are pretty much right about the current situation on the market and Bitcoin fundamentals,but I keep thinking that the Bitcoin price was overinflated back in 2020-2021 and the next 1-2 years we won't be seeing crazy 60-70K USD price levels.There's little hope that I might be wrong about this.

Dont think the stock market is making the effect on bitcoin in this case, we have the habit of correlating things too much, I think they are both moving on their own accord. The fiat market in my country is dropping and bitcoin also started like that but bitcoin is now recovering while the fiat market here is still dropping.

Therefore I am putting money into stocks I wished to buy at low and also placed buy orders on bitcoin at 30k.

No, because they are all humans and trading is not for them, but they will not realize that and continue to lose money and blame bitcoin for their losses.

Possible, they bought at highs, a common mistake in any speculative market.

This line is true for many users.  

this is it, even though if they don't want to be in bitcoin for the long term when the price is going up why don't they come out but when the price goes down they just come out and this is an act that tends to be stupid.
learning is an important thing and indeed it is very much needed not only for beginners but for everyone because indeed it is an important thing.
Crypto is not just for hype but when you really want to make a profit there then you have to be willing to sacrifice both in money, time and learning

If you truly believe in 4 years cycle then you must not count the 2021 because it is a bullish year when supposedly that is bear from the halving of 2020?

but yes I am also a believer of that span of time for the market to evaluate .

never that it will be like the recent because that is the effect of worldwide economy as the pandemic enters the world .

so Never that same thing will come .

There was little fear in my mind also as prices were going down continuously and I was need of funds but didn't want to sell off my stash at these price levels but was lucky that funds were arranged from other source and i still hold onto my bitcoin investment.

The fear was because of need of funds but those who are into panic sell are doing the wrong move as market trends to move both the ways up and down so why fear this.You are right on the point that few months back we were happy to see even $30k and now it's the barrier point so time changes and so our mind with it but remember btc will go up in the long run always.

I am open to hearing a bullish case on cryptocurrencies, though I respectfully disagree. I think the four-year cycles are still operating and that the reason why certain metrics are off this time is not just a change in some fundamental forces, but also the maturity of the market that will bring about less meteoric bull markets (though still significant compared to more mature industries).

We also have looming Fed rate hikes, which I think can overpower the positive sentiment that might otherwise exist. On the other hand, if we are in a bear market, it stands to reason that it may not be as extreme as previous ones due to the maturity and growth of the industry.

Actually, no one is able to exactly predict the market and it is behaving opposite of expectations. The best thing we can do is to stay of this market for some time and let the market decide where it wants to go. Last two days, bitcoin moved from 33k to 39K but today again we are back to 35K. Unless, we see the clear direction of the market, it is better to hold our investment and do not take wrong decisions.

If you have money (USDT), you can buy some good altcoins in spot only. Do not do future trading in current market situations.

Will there ever be a time when people will set aside their emotions and stick to reason in their investments? Or perhaps, to those who are selling during the dip or are selling out of fear and panic, are you overinvested? That's probably the reason why you are severely affected with the correction. If a dip or a bear season, which is a normal occurrence in any market, gives you a sleepless night, perhaps you are investing more than you can afford to lose. Or is it simply a case of low risk tolerance? Or perhaps you simply don't belong to the Bitcoin market.

even the current price has reached the price of $33k and that's lower than the price you said. If the price continues to fall and the price may enter the $20k area. the market is bearish. the possibility of a rebound to the $40k area remains but certainly not that fast. Bitcoin was also faced with the FED's decision to raise interest rates.

We might say things like this are becoming commonplace in the bitcoin market, but it's always possible to see them differently than before. It is important to see bitcoin recover after the market corrected since last year.

I have seen the price start to rise after experiencing a correction in the last few days. Now the bitcoin price has reached $38K, but it is still quite vulnerable to a decline. We can still expect the bitcoin price to rise above $40K by the end of January, but of course that's not guaranteed. Anyone who wants to buy must weigh the risks, also have to make their own analysis.

Yes and also saw it hit $38k. You don't think it's fast but I think that it was, the price have moved fast but as usual, there will be some pauses that has to happen.
Like what happened after it has hit $38k, I thought that it will going to continue moving up to $39k but there's a delay somehow. But just as the usual thing for bitcoin, we don't know what's next for it and maybe a rapid move from $37k to $39k and $40k.

You want it - you got it.


I'm pretty sure we need more time to break 40k, but with Bitcoin anything is possible. S&P 500 got a little bounce yesterday but is still much lower than it was 5 days ago. Nasdaq again lower today than it was on the 20th... This Bitcoin move is fueled purely by Bitcoin itself. It can be amplified or quashed by the stocks in the coming weeks. 

Finally, the price is back to $37k and the sign to rise is there so hopefully, the price will be back to $38k. Yes, the price can bounce back, although the price is not moving fast to the high price but we should gladly see this moment because we can profit from the coins. Bitcoin seems to have the power to lift the price to hope that it will be a good week for us. They should not worry about the fluctuations because they are part of the crypto price movements and we should try to benefit from that.

I always get confused about the economics behind this. Yet, the doom and gloom resulting in crashes can hardly be caused by the average retail investor trying to sell off his investments. I guess most people would like to jump out of risky investments but they don't react on the news; they react after the market itself has reacted. And the markets react due to the moves from BIG players.

I think if it was purely upto retail buyers, they could hardly care to selloff Bitcoin on the back of news about inflation. Yet, the selloffs by professionals is what leads to the panic. I assume that the average guy is as average as me. In that case, he mostly just prays for things to go back up, diamond handing his coins down to whatever comes, LOL.

According to the logarithmic regression band that some traders use to calculate future highs and lows the average price of Bitcoin right now is ~32k USD The lows of the band are at 19k.
Historically the lows of this band were always the lowest point to which Bitcoin was falling in a prolonged bear market and it often returned to and above the middle range.

I remember reading a thread some time last year where people were asking if Bitcoin will ever fall below 50k. Funny how in a bull market people tend to be unreasonable in one way and in bear the other.


Thanks. Good luck with your investments.


Selling in a downtrend isn't that bad as long as you do it early on. Unfortunately people tend to hold it off and every subsequent drop is like torture to them. When you put money on the line you need a plan. People should ask themselves if they can afford -50%. If not, they should set a stop loss or exit the market with a small profit in a bull market and be done with it. Worst thing you can do is invest money you can't live without, see it drop 50%, accept defeat and sell and then feel like shit for years.

Perhaps, it was a happy moment to see that Bitcoin is going back to high again. I thought it drops more as it reaches $33k, it looks like it wasn't the time for the market to be at that bearish season, I think not this year.
I guess some people are celebrating right now seeing growth on their portfolio, I'm on it...

So my take on the market is that we can't predict the trend, nor are we able to see what happens next but instead, it remains unpredictable no matter what we do (TA's, chart reading, etc...)

I love this your write up, you took your time to come up with it. What I have learnt from this write up majorly is that we are having a global 'bad market' it not just about crypto but also stock markets. Every other aspects is for newbies who are yet to experience bitcoin in cycle of four years, because if they have believe me they will not be panicking and talk more of panic selling. I think life is about learning and growing, certainly they will learn from this one and perhaps do better in the future when the market goes bearish.

Basically, this should what investors do and avoid not panicking and selling during the dip, I tend to agree with this idea.  When there's a dip, buyers would be the right time to enter the market and sellers should hoard their assets until the hype will come.  We know that there's no infinite growth of Bitcoin price or let's say the entire crypto market, corrections always occur at any time.  It always fluctuates creates a wave position that might up and down and when people listen to the FUD, it's expecting that the market will continue going down.

I believe that the market will not go down beyond $30k, for short traders who bought Bitcoin at the dip for sure they're happy to see their profit now while the earlier investors still hoarding their assets.

During the rise from 30k to all time high, I did assume the market to to drop back to 34k and test the support levels because it was crossed in a short period of time and I was in the belief that the support level had not developed much there. However a few months and the price continued above 50k and I assumed that I might have been wrong and support levels did become strong there.

I was eventually shown that my first assumption was correct, just that it was never tested till this month when prices dropped and the 35k support level was tested. I still consider the 30k mark to be the safer buying option or even lower if we see that. This is not the time to sell, do that again when bitcoin crosses beyond 50k.

Right now, just wait for lower prices to buy in.

$36k as it is and it's a good sign that after going low to $33k we have seen it bounce back with another $3k that quick. This is what I like with bitcoin. It bounces back quickly although the drop has been too heavy and a lot has been reduced to the former price.
Still, this is giving hope to the newer ones who have lessened their hope due to the fluctuations. But again, they shouldn't worry about such movements because that's the nature of bitcoin and they should be accustomed to it.

I believe that in addition to the normal panic that many retail investors feel in situations like this, there is the disillusionment that the many bullish price predictions for the past year have failed, and by far. Remember S2F, the supercycle theory etc. So, if we are in a general market downturn and we add that, it is easy to understand a massive sell-off by retail investors, who tend to do the opposite of what should be done.

The reflection of the OP is quite good, what happens is that it will have little influence on these retail investors, who are driven by emotions rather than by reason.

There is only patience we can do in the current situations and stay calm down to prevent panic. Luckily, the price now is increased and back to $36k. I guess we can still hope that it will still increase this week and no matter if the increase is not happening fast, as long as the price can increase step by step, that will still be worth it for us.

By the way, congratulations to people who bought bitcoin at $33k-$34k yesterday because they are making a nice profit now. I speculate the price will still be up and down for the rest of this month so if you can use it for your benefit, you will make a good profit at the end of this month. It is up to you

Who doesn't want to see bitcoin going up further? All of us do but that's where the greed starts and based on experiences, we know that when it's already at its peak, we should start taking our profits and avoid being picky and greedy because we're aware that the dump is about to start soon. And we're all right with that because after bitcoin hit the last ATH, it has basically started to dump.

Panic selling happens in every drop occurs...
Panic selling happens during ATH (not to miss the chance)...
Buying and selling are still in the race. We can neither change this scenario as people had only take the look at the current trend, not for the future. Some people will say "I Will Hold" but later on, I'd sell them because I am worried that it drops more. This is how volatility influences people's mindset and it often changes depending on the situation.

What you say is the reality that is happening today, many people make the wrong decisions. When the price of Bitcoin rises above $60k,
many people choose to hold Bitcoin over selling it. Then when the price of Bitcoin is currently experiencing a decline, many people panic
and sell the Bitcoin they have,  so the price of Bitcoin is falling even more. I always say that it is very important to learn Bitcoin first,
before finally deciding to invest in Bitcoin. So that many people understand how to make the right decisions, so at least understand
how Bitcoin works. For now people who have experienced losses, don't think about leaving the crypto world, the losses we experience
are lessons for us. We can start again from scratch to re-invest in crypto, especially now that the price of Bitcoin is very low,
we can start to enter the market now. Remember never to panic if the price of Bitcoin falls, as long as we don't sell it, we haven't suffered a loss.

buy the dip not the hype

dont listen to people that talk about fear, they have a one-sided view.
hype 'fear of missing out'
dip 'hoarders fear'

rational minds though
hype=buyers wait for correction
dip=buyers reward

hype=sellers reward
dip=sellers hoard time

The problem is that many people are still late in making decisions, for example when the price of bitcoin goes up even to New ATH, they still want to keep going up again and even some time ago $100 was still a hot topic.
and when bitcoin plummeted as it is now, they were reluctant and too late to use it to buy them instead selling their assets.
this happens very often and not even just for one or two people but a lot of people

the quick rise from $20k to $69k was externally driven... the correction to $34k is as said the correction

the price is volatile but the bottomline value(not price) rises at a slower and supported rate. and no where was $69k price deemed as a stable price that should have remained

2021 value was $20k support value, 2022 value support is $30k

anything above these are speculative premium that can go up and down

With Bitcoin it's usually a number of news, not just one, but the important part is that the drop is externally driven. Pandemic followed by a stimulus package and money printing threw many countries into an inflation spiral and scared people away from investments.

When the average guy hears all this doom and gloom in the news and finds out some of his friends lost their jobs, he goes to the bank and withdraws money. Inflation incites investing and spending, high interest rates and pandemic lockdowns work pretty much like news about a coming war and make people think of hoarding money.
Unfortunately, bitcoin is still seen as a volatile asset and instead of digital gold. We can joke that for it to be digital gold it would have to be losing 2% a year, like gold, but people will be people, most of them will never own a new car or be free of debt.

So the fall has really just mirrored the stock falls due to rumors of Fed rate hikes. This may not just be the only reason as the actual fall is too great to explain this (40-50%). The geopolitical situation has definitely amplified this. Till the uncertainty recedes, we will continue to see falls. Yet, no matter what happens, the facts don't change that Bitcoin is still being considered by nation states and institutions. There have been worst falls earlier and this is also the best time to what some call "buidling".

So instead of panicking, the newbies who are stressed for their losses should really just hold onto their crypto, if they can and try to explore the space more for opportunities.

This isn't the time to care about price if you are in crypto for the long term. This is the time when you find your crypto niche and be ready for the revival.

Well if it is for those people that have sold the peak, they really don't have to panic when the price of bitcoin goes $30k or lower. They've made significant profit and selling x2 when the price of bitcoin heads down to that price. It's known that the whales have always been making a lot of profit every cycle of the market and as a small investor and trader, we should think about how we're going to deal with the current situation and this may take long and be patient.

We're grasping at straws here, that's true, but patterns are a known way of predicting market moves. The more people see the pattern the more likely your prophecy will fulfill.
Most market indicators have their flaws. Pi cycle top indicated that 60k in April was the top, but there was another top close to 70k months later, so the indicator was ~10% short.


Call it what you want, but you have to agree that it's been pretty good at showing buy zones in the past. Usually when it goes to yearly lows, the sellers are becoming exhausted. As an investor you should look for extreme panic, a time when people aren't thinking straight anymore and those who held through initial selloffs get tired of waking up to red candles.

Human psychology is always the same and I know it because I've been through it in 2018 when I actually made money and was at a profit, but the long bear market made me quit the forum and stop watching charts. I had enough of constant negativity and even considered selling, but taking a break and focusing on something else helped me to get through this.


Chinese new years had more impact when China was still in the trading game. Now it's more of a "I don't know what's going on, but people are selling so maybe it's time to sell" game.

Hopefully, those people already sell their bitcoin when the price is at $69k

I think they do not have to panic seeing this situation. They can wait until the price back to $34k and start buying. Or they will not purchase anything if they are still afraid to enter the market.

Yes, we are close to Chinese New Year so we can expect that the market can be more bleed from this. Or those whales already prepare their money to buy at a low price and celebrate it by posting on their social media

But one thing that we should know is that the whales are already making a big profit from the peak and now, they are waiting for the best moment to accumulate more bitcoin from some of their profit.

This is human phycology. Last year people were happy to see 35K because they have not seen the 60K at that moment. Another reason was that 2021 was a bull cycle year as per the four year cycle and therefore people expected more upside and were greedy at 30-40K. Now when people see bitcoin dumping from 69000 to 35000$. they feel panic because as per the history they think we are about to enter a multi year long bear market.


If people can't bear the 10%-70% portfolio down, then they should not be in the crypto market. Crypto market is volatile and here we will have to face such crazy dumps. The main thing is that we know that bitcoin is fundamentally strong so it will recover. All its need is time and we have to wait for this time.

there is no 'fear index'

its just a chart that shows greed in one direction and 'fear' in the other

/\

but here is the thing
for every seller there is a buyer.
so on the same updown. the buyers are the opposite
/\

one persons reduction \ is another persons discount
one persons premium / is another persons profit

and when it comes to sellers. not everyone bought above $35k so not all sellers are upset/afraid

i wouldnt call it a fear index. id call it an impatience index for those selling when prices are low.

what you do learn though is all the people that bought in previous years at $6-$20k that are selling for $35k. they are all happy.
and the new owners are at $35k and fresh, and willing to hoard for a longer period meaning the sentiment becomes stronger as a support above $20k to become a support above $30k
the more that bought below $20k and sell above $30k resets the $20k support to become $30k thus help prevent the price dipping below $30k because too many have bought and refuse to sell at a loss. and too many value it at $30k+ plus to want to buy more while its cheap.

the price drop is not FEAR, its impatience for those that seen the $69k ATH but cant wait around for support bottoms to catch up to the speculation numbers above it

Good read, I'm one of the holders and this is also my stand point this time.


Honestly, I'm one of those who has sold earlier and that's why I think that I'm still cool with whatever is happening in the market. It's like a cycle or it actually is. We're close again to another Chinese new year and usually when it comes, the market is really bleeding. Who knows? The whales from China or wherever they are co-celebrating and cashing out money from the market for their another "prosperous" upcoming new year.

For those who find such explanations a little more complicated than what they could easily digest, it simply means avoid letting your emotions take over your decision making. The market is doing good and healthy. Bitcoin remains the same valuable Bitcoin.

Fear and panic are high right now especially to the newbies who bought at a much higher price. If you give in to your emotions you will end up selling at a loss. Remember that selling is the only thing that makes you lose. The value of your Bitcoin right now is just paper value. The moment you sell, that’s the time your value is made permanent. You cannot anymore recover from it.

I get your point but I'm just saying that it's not the time for us to be scared because the prices are going down, and instead see it as an opportunity for us to get a potential profit in the near future when all of this red days are over. I mean you can wait for more days to come and see where it takes you but we don't know if the prices will start climbing again but hey, to each of their own.

It's totally a downtrend except for the stable coins. Man, this is too good to enter the market but I'm still waiting for the right time to invest because it might go down further in the next few days. I'm just putting the money first in the exchange to get ready for the massive comeback. I'm sure everyone is doing the same as always and they also waiting for the right time to enter the market.
This is a sure profit since we are investing in the top 10 cryptocurrencies but it is safe to say that bitcoin is the best choice right now.

Oh boy, with the fear index on the high gear. I guess it's time for us to start making sure that we have fiat lying around so we can make sure that we are going to buy a lot of cryptocurrencies, I know that I'm not the only one who thinks this is a good opportunity to buy crypto right now so I know that my opinion is somehow grounded in logic. Hope that everyone gets to buy crypto right now when the prices are dumping.

when the price goes up it always comes down

there are so many waves you will always find a combination that matches more then once

\
  \    /\_
    \/     \/\

especially if there is like 8 other peaks between the 4peak pattern. making it a 1/3 chance

but this silly pattern 'trend analysis' is meaning less. its more so fulfilling prophecy rather then predicting anything
if enough bots are programmed to trade in a pattern if the price dips more then 10%.. guess what. the bots are the ones then causing the pattern

however if you look at a more outside view of just imagining a price line. you can start to see more things.

just looking at the price line. you could the market 'bottom' (lowest price of last month, 3 month, 12 month) and then whatever the price is today you can see if its near those bottoms or up high. meaning you can see if something is cheap or premium (value or overvalued)

you can also make a better value window. by looking at things not found in the market price.
things like the mining cost from cheapest on the planet to most expensive.  and you will find when putting the charts together the price no matter what it is fits inside the value window. its no surprise.

here is my recent example
yep its much better then drawing arrows on price charts. as its actually using statists not found in price but explain alot about the economics at play.

Here's an addition to "Why shouldn't you panic?" of OP.

People especially newbies must also be aware that this bloody market action recently is not only happening in the cryptocurrency market, if you take a look at the stock market, they are also suffering. I am more likely worried if this bloody market is only on cryptocurrency, this is like global effect, for all the market not only in Bitcoin.

The Dollar Cost Averaging (DCA) method this time is extremely effective, with the drop from $40,000. Oversold market, then if even we will drop again, I am positive that we will not visit $20,000 or below again.

Thanks for the input. I chose this section because I didn't want the thread to be too technical or too political. It's also not about trading but rather not getting rid of your coins after a 45% drop in price without considering the bullish case.

You are right, but I feel like the market is becoming more mature. There's less speculators and more strong hands. People compare market cycles thinking it will play out the same way every time (20x up and then 85% down in a year of bear) but It's not going to be like that. This would be too easy to predict and too linear.



 

This is a quality post, but I think it belongs to the economics or trading section of the forum.

To comment a bit on it: The raise of interest rates will surely affect the level of spending of people and businesses, but we can't know for sure the magnitude of the impact. After all the productivity growth caused by technology advancement is something we haven't seen before in our history. Just think about the economic value artificial intelligence could unlock, not even talking about space exploration. The sell-off is probably caused by a mixture between the expectation of a serious drop in economic activity once interest rates hike and fear of the on-going health crisis. It is a pity that Bitcoin is not yet considered a hedge against uncertainty. Probably investors need to see a longer track record in the markets.

Since I can see the fear and pressure some of you are under at this point, I'd like to offer some advice and a bit of analysis of the market. Maybe this will put those of you who are biting their nails and watching the charts all day long at ease. Hodlers probably won't learn anything new here, but I at least hope that those who think the sky is falling will.

Let me start by saying that the things you can read in both the mania and extreme fear are one of a kind. Especially on youtube you can see and see some weird mix of panic, hate, resentment and sarcasm. No, Bitcoin is not going to $1, $100, $1000 or anything in between. The protocol is intact, the hash power is growing, this Bitcoin that people are selling now at a loss below 40k is actually a stronger, better Bitcoin than the one they were buying for 40k in January 2020.

You're probably thinking that if everything is fine then what caused it to crash and why 30k again? There's so many people who feel fooled by media and youtubers. It was supposed to be at 100k, right?
There's so many factors that influence the price that it's impossible to predict the exact value and time. There's external and internal factors, with internals being the number of users, nodes, network upgrades, hash power, difficulty, number of transactions. External factors are things like the stock market, the attitude of various governments, pandemics, wars and so on.
In 2013 it was mostly internal with the biggest exchange declaring bankruptcy, while the March 2020 market crash is a nice example of an external influence (US stock market covid crash)

Unlike the external ones, internal problems cause a prolonged loss of confidence in the asset, so they're much worse.

IMO we are currently facing a bearish correction due to external factors. High inflation all over the world with countries like USA, Turkey, Russia and Poland really struggling to fight it. Most of them try to increase interest rates, which means that companies who are in debt are forced to pay more interest and any future loan is going to cost them more. Naturally this is going to slow them down and make investors (who also have to pay higher interest on their loans) to sell some assets to be able to cover that increase. This is why the stock market is going down and dragging Bitcoin along.

Is it bad overall? Sure, but is it bad for Bitcoin? Not really, because it's still the same Bitcoin, just people don't have enough money to keep buying and since we are mining more every day, with less buyers Bitcoin is naturally going to keep falling in price.

Silver lining? Of course there is one. First of all, the stocks are not going to keep falling forever. The governments know that they can't let this go too far or companies start going bankrupt, which means less taxes and unemployed people on the streets waiting for another round of stimulus checks. They are going to start printing money and lowering rates, which will push the stocks and bitcoin up.

There's also some technicals for those of you who like these things.
The similarity among this price action and other historical events is striking.

We are going through Spring of 2021 all over again. You can see that there's much less volume this time because we've been witnessing an outflow of coins from exchanges all throughout last year.

Why shouldn't you panic?
1. Fear is at extreme levels in both the fear and greed index and on social media. The blood is definitely on the streets.
2. The RSI is at one of its lowest levels in history, around the value where it was in March of 2020. Historically such a low RSI hasn't happened more than once per year and always indicated a good buying opportunity.
3. In the previous cycles we clearly had an overheated top, that was followed by a 50% move to the downside and a dead cat bounce (a lower high followed by a lower low). This time there was no such thing and we've reach the oversold area without even correcting 50%. In the previous cycles the price had to correct 70% or more to become oversold on the RSI.
4. The fundamentals remain the same.

If that's not enough for you, calm down and think about it for a moment. A year ago people were happy to see 30k, now they panic at 35k. We tend to see the negative side of things, despite common sense. If someone gives you $100 and the next day demands $80 back, you'll be reluctant to give it away. All you'll feel is regret that he gave you something and then came back to take it away, completely ignoring the fact that he gave you $20 for free.

Most people can't stand a little bit of pressure and succumb to it. They want for it to stop already, even if it means turning this pressure into regret. When you hold an asset that's 10% down you just want it to stop and go up, but when it goes down another 10% and another, you sell just to be able to get on with your life. That's why bear markets always take longer and go deeper than they should, without any fundamental reason.