Discover more from Your Crypto Community
To buy or not to buy, that is the question. #9
Bears in disbelief. Bulls euphoric. Which is it?
The latest price action has caused a lot of debate in the crypto space. Bears went silent while bulls celebrate. Is there something we are missing or is this market really turning around?
The below tweet from Peter Brandt (30 years of trading experience) probably explains best the current market sentiment. Bears are in disbelief and they struggle to accept they may have been wrong.
Bitcoin was not supposed to rally 50% since its most recent bottom and altcoins should not have doubled in price. However, such opinions turned out to be a biased approach against the price action which started to give bullish signals since late November 2022!
The breakout above $22,000 by Bitcoin proved to be fatal for any last remaining bear. This was a key resistance that was not supposed to fall. Yet it did and with it a question started to be asked: Is the bear market over?
The longer Bitcoin sits above this key level, the more positive the outlook becomes. Nevertheless, even if Bitcoin continues its rally towards $25,000 or even $28,000 (key resistance levels) it may eventually turn back to retest the breakout or even fall to $20,000 during a corrective phase. Such a retest would be a healthy event as it would build a strong foundation for Bitcoin to rally higher later on.
Either way, the bear market is over so long Bitcoin holds above $20,000. Bears may need to wait for the next bear market in about two to three years to be satisfied again. Prices will not go up only from here, but a lower low is highly unlikely. Those waiting for $12,000 may be waiting in vain.
Should you buy?
The optimal time to buy Bitcoin was at any price under $20,000. Buying altcoins during that period was also a good entry. But lets be honest. Once Bitcoin will be above $100,000 it will not really matter if you bought at 18k, 20k or 22k.
You have two options right now:
Wait for a retrace/correction to enter once this impulse up is over (say after a rejection at the $25,000 resistance). Idea entry around 20k-22k.
DCA on any pullbacks on the way up. This means you buy in increments every time Bitcoin falls by 3% or more. The lower it falls, the more you should buy.
Remember to always keep some cash ready in case an opportunity arrises and you get a large discount / pullback.
⚠️ Note that this is not financial advice. Use common sense and do your own research before taking a position.
Turns out its not really retail or institutions. If anything, institutions got so scared during this bear market that most ended up liquidating their assets or leaving the market all-together. The FTX collapse was the cherry on the top.
While retail is waking up and may get FOMO due to this price action, there is one actor which is new this time: NATION STATES. It seems more countries will follow El Salvador’s example in adopting Bitcoin and now oil rich countries like the Emirates (see tweet below) are about to use crypto in their trade.
This is a huge shift in both perception and use case for crypto and most of all for Bitcoin which remains the undisputed market leader. Retail will be back and institutions will follow the money like they did in the last bull market. When all these forces will converge, we will have a new bull market breaking records.
Regardless of what happens, the worst of this bear market may be behind us and this is a welcomed change. Optimism is high right now, but be careful if euphoria starts. Remember to secure profits on the way up or you may regret it later.
If you’ve been absent from Twitter, you may have missed my thread on the biggest ponzi in history. I am speaking of Bernard Madoff who created a $65 billion ponzi which lasted for decades. There are some lessons learned there which prove useful in crypto as well. Have a go at it, the thread is below. Now before you go… (see below).
To get started on your crypto journey use one of my referrals (scroll down) and then consider becoming a Patron. You can find me on Discord for any questions and if you want to start a collaboration, reach out!
Duo Nine - YCC Founder