What does bottom look like?

in #bitcoin7 years ago

Let's get some inspirations from the last bottom. Here is a weekly chart after the crash from the last major peak in 2013.

We can see a few things

  • Prices bounced up and down violently for a few months. This is a period where people who were holding coins were trying to cash out on re-bounce and people who were hoping to become rich overnight trying to catch the bottom. People who get in in early 2014 would really need a lot of determination or very high skills in short-term trading to profit from such high volatility.

  • The volatility eventually died down after the new year of 2015 and remained low for almost a year before slowly pickup momentum. These few months of low volatility is actually a gruesome period as people who got in late to the game (right before the main peak) and who got in trying to scoop the bottom were well under water. If you or your family depends on these "investment", these months would for sure be rather dark. I have seen quite a few examples of people giving up hope and their position during this period.

  • If you were to dollar-cost average your investment, even if you were to start at the very peak of late 2013, you would probably start seeing profit somewhere in the latter half of 2016 and would have a handsome profit today, provided that you were bold enough to hold your positions. Again, it is much easier to hold your position if your position is not large compared to what you can afford to lose. Often times, trading is not a technical game, but rather a psychological one.

Lastly, and most importantly, the chart will not repeat itself. Don't expect that the bottom forming process will be the same as the last one. We may or may not see a similar pattern. It's all probabilistic.

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