Everyone says to buy the dip...
Bro, with what money am I supposed to do that with?
Those who are constantly all in (like yours truly) find themselves in an awkward position. My advice was to slowly DCA sell any price above $35k. How is that advice aging so far? Pretty damn well if you ask me. Of course it's a shame I can't ever seem to take my own advice.
So Bitcoin dips and I can't buy the dip because I don't have any fiat to buy the dip. Go figure. Have you noticed that though? Everyone says "buy the dip" but no one ever talks about selling enough to actually have the money to buy the dip. It's a pretty flagrant double standard if you ask me.
Obviously the problem with "selling the spike" is that it's impossible to know when Bitcoin has stopped mooning. Sell too early and you'll potentially miss out on a life-changing run. Better to just eat the losses and simply HODL then try to outplay the market that seems to be the master of separating us from our money.
DCA
However, there are safe ways to maintain balanced positioning, selling the upswings and buying the downswings. It's nothing new. Dollar cost averaging is the way to go. Rather than being a min/max all-in gambling maniac you enter and exit the market slowly over time.
I'm just now remembering that I wanted to create a 20-point system for this. Each point would represent 5% of the money one is gambling with (excludes forever-HODL money). When we get the urge to move in or out of the market we do it one point at a time rather than shoving our stake around like maniacs. That's really the way to go. We need to train ourselves to make calm measured decisions over time without trying to reclaim bad-beats or get overly greedy during a winning streak.
Very few people actually play it this way because we get pumped into extreme emotional states during extreme market volatility. This has a tendency to cause us to make quite rash and hasty decisions. Trading this market is somewhat like going to the gym. Everyone should start small and work their way up rather than trying to max out and risk injuring themselves, resulting in a burnout that takes us completely out of the game for a long time.
Many are looking to 2017 for the answer.
After what I've seen, I think it's safe to say that 2021 isn't going to look anything like 2017. In fact I think the real bubble is going to be in Q2 2022 at this point, or at least there's a good chance for that outcome. I need more information from Q1 and Q2 of this year to solidify that position.
Side note
Michael Saylor and Microstrategy recently announced buying $10M more in Bitcoin. Seems... weak and scrambling... if you ask me. Like many of us, the man is all-in and hasn't left himself a buffer in case we drop back down to $20k.
Even though the corporate sharks have theoretically infinite money, that doesn't mean they are just going to throw money away. They are in the ultimate business of making money, and they can see what we all see.
What do they see? A Bitcoin market that's gone x10 in less than 12 months. They see a market that is obviously unstable, so why pump more money into it when they can just wait and buy at a lower price? Things to think about.
I stand alone
I feel like I'm literally the only one bearish on the market right now. Everyone is riding high with their $300k end-of-year predictions. Hell, this is even my prediction. However, in the short term, I still maintain that things are not looking great.
In order to be bullish on Bitcoin, one must be bullish on the market at large. For me, the only way to be bullish on Bitcoin while not being bullish on the stock market is if Bitcoin is trading on the doubling curve (currently $14k). Otherwise a dump in the market will result in an automatic dump in Bitcoin, and as we all know Bitcoin dumps are far more violent than stock market dumps. Thin liquidity is thin.
There's nothing bullish about Q1
Many people are holding out hope that because 2017 Q1 was bullish that means we'll repeat that and continue being bullish throughout what is potentially a mega-bubble year where Bitcoin will trade 10x higher than the doubling curve. As you all know my favorite metric is this idea that Bitcoin is consistently doubling in value every year. It's a metric that hasn't failed and began in 2013 at $100 at the end of the year Q4.
Bitcoin Doubling Curve
| 2013 | 2014 | 2015 | 2016 | 2017 |
|---|---|---|---|---|
| $100 | $200 | $400 | $800 | $1600 |
| 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|
| $3200 | $6400 | $12800 | $25600 | $51200 |
From my perspective, it is a HUGE mistake to compare 2021 with 2017 at this point.
We are in completely uncharted territory with everything that's going on right now. From a global pandemic to the Patriot Act 2.0 to the New Normal and a Global Reset. Anything could happen.
This is September 2016 to October 2017. So if we're looking to compare 2021 to 2017 to get a glimpse into these 4-year cycles based on the halving event... what do we see?
I see Bitcoin hitting all time highs in January 2017 and getting instantly rejected back to the doubling curve. Is that what happened in 2021? Uh, no... not even close. We went x3 above the doubling curve and even now we are x2.4 higher than the curve.
The reason why Q1 2017 was bullish for Bitcoin is that it bounced off the super solid support of the doubling curve. We don't have that right now. We are bubbled as hell.
How high did the price get in Q1 2017? $1300... Again, that was only like x1.3 the doubling curve and the price was immediately rejected back to the curve by the end of March to the $1000 line.
So to compare all that to a bull run that went x3 the curve and is even now still x2.4 the curve? Ridiculous. In 2017 Bitcoin was traveling on the curve for the ENTIRE time until we finally broke away in the Q2 summer time. It is no longer a valid comparison. Bitcoin should be trading less than $20k right now, but instead we got a bubble which is basically just free money if I end up being right and turning bearish is the right move. Big if obviously...
So when to capitulate?
So when do I abandon this bearish crusade and admit I was wrong and this mega bubble is even stronger than 2017? The numbers are pretty clear, all we have to do is make a new all time high before the end of Q1... not going to happen.
In fact, I'm going to be surprised if we even break the $35k resistance at this point. I expect $35k to get rejected and we will start trading around $30k until the market finally runs out of steam and dumps to $20k.
I don't understand how so many people can look at this chart and be like yeah, this is fine, why wouldn't it just keep going up like this for the entire year... lol? Like, these things take time.
Timelines
Again, everyone says these 30% retracements are fine... 30% retracements happen all the time right? During a mega-bull run year you get the 30% retracement and then guess what? The price rallies again and hits all time highs all over again. No problem, buy the dip, shut up and enjoy it. Right?!
Wrong.
These timelines are FUCKED. HEALTHY 30% RETRACEMENTS take weeks or months to play out. Look at the charts. They take weeks... or months. I am not wrong. How fast are these current retracements happening? 2 days max. Closer to one day.
These are not the sign of "healthy dips" and/or "consolidation phases". These are the signs of a bubbled market that is insanely volatile and doomed to crash as soon as volume runs dry.
Greed supreme.
But everyone knows that Bitcoin can still hit $300k by the end of the year... so extrapolate that back and it's easy to make a prediction that Q1 is still gonna be great... it's not... it's so not.
Everyone seems to have forgotten that Bitcoin makes all it's gains in violent bursts in short periods of time. You can't extrapolate $300k Q4 Bitcoin backwards and expect it to be a smooth curve upwards. That's not how these things work.
Conclusion
Every single time the market tries to price in these events early, it falls flat on it's face. Every single time. We are in one of those times right now. Corporate sharks went FOMO, bubbled the market, and now it is wholly unstable, and they know it. Of course perhaps Michael Saylor doesn't know it... throwing down another $10M which seems more like a desperate drop in the bucket rather than actual bullishness.
All of the on-chain metrics say we are doing well, all the of the technical analysts say we are going to the moon and still in the bullish channel. They're all wrong. I'm right. Q1 gonna suck. End of story.
So what happens next?
Well if I'm wrong Bitcoin should easily break resistance at $35k and consolidate further... not gonna happen. Gonna bounce off $35k and go lower. February is usually a great month to swing trade an epic dump/pump dead-cat-bounce. Be on the lookout for that. In these situations, March is usually the most disappointing month out of the year... unless you're looking to buy cheap of course.
I'm worried that all this "buy the dip" talk is going to burn people out on buying the real dip, which in my view is obviously $20k-$25k. That's the dip I'm saving up for, and I'm willing to wait a few months to get there. Even if I'm wrong and Q1 is good for Bitcoin, the chance of it being an amazing run is really low, especially by 2017 standards.
Once again, early April is the best time to buy Bitcoin, hands down.
The question is will you have any fiat to spend during that time?
Or will you be all in like so many others before you?
The only way to beat this market is to lower volatility with DCA.
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back in January 2018 people were having crazy predictions just like they have now and bitcoin just flopped for almost 3 years. I'm going to wait patiently for the real dip meaning under 20k anything beyond that I'm not really interested.
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People forget the timelines on these things... You have to wait months for the market to play out. Not days. It's foolish to think this time will be different.
This isn't January 2018... it's the beginning of the post halving bull market parabolic phase. Apples and oranges. 'This time is different' than what you are comparing it to.
Well, statistics are fucked up at times, the problem here now is that so many have a vapor view on Bitcoin, the trust the Crypto has built around itself is damn high that notwithstanding how bad the markets may seem, they will also stand in with all damn shillings, clearing hoping more people can go push in money to pump the market, that way they'd look good making flawed instances, suckish. However, one can always be wrong, so we can only look onto the future and see what plays out, then we can reference this moments.
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so... 30% retracement top to current bottom... 13d 16h... I would call that weeks
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You see one retracement lasting 2 weeks.
I see two retracements lasting 2 days.
Show me where this happens in 2017.
Again, the market is trying to price in an event way too early.
No one argues that we are at least a year away from the mega-bubble.
This bubble is trying to price that in, and it will fail, as always.
I could actually show you a bunch of places in 2017 this exact thing happened... information bias seems to be kicking in my friend.
On that note, just look at this chart I keep showing you...
This is a weekly chart, and several of these pullbacks have less than 2 weeks from top to bottom.
Certainly, I won't be surprised if it works out this way...
But I think you're ignoring the obvious.
The ultimate question that must be asked:
What is the risk of exiting this market for 8 candles?
8 weeks aka two months.
What is the risk vs reward?
The risk is that the price goes x2 to $58k and then retraces down to $40k.
The gain from going bearish is retesting $20k support.
Looks like it's going to be volatile either way, so it's probably important to maintain a balanced position.
Again, I challenge you to overlay the doubling-curve on top of this analysis, and you'll see that the price bounces off it on all three of the first dips. The first three 30% retracements were fully supported by the doubling curve. That curve is at $14k right now. We have no support.
True support lies in where the biggest buyers are putting their buy orders. I can assure you that the largest institutional money isn't looking at your doubling curve when deciding where to put those orders.
Yep, you are exactly right. I've been saying this for days and weeks now, yet somehow people are failing to see the trend...
That's exactly what happened back in 2017:
Several of these were top to bottom in less than 2 weeks, and even more in less than 3 weeks.
Buying the dip is even harder to do in these bubble markets where all assets are rising and dipping in sync. It is easier to do in markets when the different asset classes are uncorrelated or even better if you have asset classes that have negative correlation.
When something is at a dip another asset is at a peak and you can sell that asset high in order to buy something low, but again that is really hard to do in this market where asset classes are all rising simultaneously. You could hold cash so that you can have some "dry powder", but over the course of this last year there has been a heavy cost to being on the sidelines with cash.
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A lot of stuff happening these days which make it extremely hard to predict what's going to happen. New stimulus packages to likely be passed soon, ETH futures launching on CME in a couple weeks, a more pro-crypto head of the SEC coming in. I don't know what will happen, but I really can't bring myself to sell crypto right now. If you're right and we do dip down to $20 - $25k I guess I'll just have to find some funds from somewhere else to BTFD!
I'll buy the dip and double dip the chip. I don't care whether George likes it or not.
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from the price stand point it will be interesting to see what will happen after that michael saylor conference. he said that there will be thousands of executives. also that he is going to opensource all their accounting and law guidance. Now that he invested a good number of $ makes sense open sourcing it as it will just make them more profit. and that probably means price go up. when? end of the year?
Fully agree, I sold btc at 40k and will wait for 20k to look at buying it back
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Agreeing with someone who literally is telling you in his post to probably do the opposite of what he says sounds dangerous to me... :)
LOL - so far this year anyone following my predictions is doing a shitload better than anyone following yours!
Remember "BTC will peak at 40K so sell now" or "BTC will drop under 30k so do not buy it at 35k"? for two good calls I've posted in the past two weeks...
And there are a bunch of others going back a bit further!
Ha, first of all I was talking about @edicted's... second of all, chill out. If you go look through my posts I actually have a pretty good track record of calls and predictions.
Emotions are running high!!!
This market is nuts!
smells like FUD to me... or maybe FOMO?
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I am not a fomo, I identify as a toaster...
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Yes, I'm getting overexcited :)
You tend to say hold BTC - and yes over the time frame of 12 years that has worked well. But the assumption that a brief 12 year history in a rapidly developing new field like cryptos is a solid base to predict the next decade makes no sense at all.
As likely as not there will be massive changes that will make that history all but irrelevant.
BTC is a strongly fluctuating asset and missing the massive up and down trends makes no sense to me at all - it's not hard to swap in and out of it.
On Leo people are getting excited about "what can I buy with 10 Leo posts" but ignoring the fact that this year a good trade call on one Bitcoin can be worth US$10,000 (or 20,000 Leo) in a week.
These trades are worth serious money but the HODL mantra ignores that and assumes everyone has so little BTC that a 20% drop is no big deal.
That's not my contention at all. You are attempting to trade the up and down moves within the broader context of an 18 month bull market. My point, from professional experience, is that your returns are likely to be better buying at the beginning of it and selling towards the end than trying to trade every zag in between.
That being said... Ive said numerous times trading these up and down moves around a core position that you hold is not a bad idea. I'm just not a fan of being all out on the first major impulse move of this parabolic phase. Sure these past patterns may fail at some point but they haven't yet and waiting for a 52% drop when that didn't happen once during the 2017 bull market seems risky to me. You are betting on this time being different even though everything up to now has gone pretty much as expected.
today i hitched a ride on Tezos and have just jumped out - that was a fast one!
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I'm not that bullish on bitcoin, which makes me think it is possible to get to 20K and maybe I can buy some then.
People predicting it to moon I think are just seeing it for the monetary gain and will dump sooner when it's not mooning as the planned, more reason for it to hit less than 30k this year
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That or because they don't think it's going lower.
Even if it does, they think it's going to be significantly higher a year from now, which means you want to buy any dips you get.
On this note, the more you continue talking about bitcoin going to $20k doesn't mean it's actually going to happen. ;)
Haven't you learned yet that everyone loves it when I make predictions so they can bet against the 100% fail rate? 😅😂🤣
I worry about the ones that follow along with it... ;)
Your assessment doesn’t account for one thing: A black swan event pertaining to a nameless central bank who might be in trouble. Now the question is would this be bullish for Bitcoin?? Let’s just say I wouldn’t sell my insurance. But for each his own. :)
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Black Swans are such Wildcards.
Anything could happen, but it's hard to bet on a Black Swan.
Gambling is all about playing the odds.
Just because you lost doesn't mean you made the wrong play.
I agree that hodling and buying-the-dip are not really compatible strategies.
Not allways, but from time to time, it does make sense to tell people 'buy-the-dip'. These are the people not convincible to buy in because 'it has already risen so much'.
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There's a way though. First never sell. Then use leverage to buy dips. When it goes up sell the leveraged amount for a profit. Then wait for dip.
Well the dip sometimes is when some people throw in some external cash maybe from their real time jobs and businesses you know. Because if you're selling and buying the dip basically you're technically not keeping your crypto, I think that dip is just external money according to my experience with buying the dip. It might be different. But honestly I can relate.
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Wow, this is an excellent publication, an explanation that many would like to know to make their investments. I love how at the end of some sentences or quotes you say "It's not going to happen." hahaha
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That's how you know it's gonna happen, friend!
ok I understand
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I do not know and I do not care what the BTC price is the short term, as I am not a trader.
In this year (maybe September) we are going to surpass $100k (stock to flow model) and my prediction is for $212,121.21.
I bought the dip at $30k and I would be glad to rebuy a new one at $20k-$25k.
Happy hodler here 😉
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You'll outlive us all.
Nah bro you use your income in $ to buy the dip. If your only making money in crypto you're doing something wrong. Diversify your income and have multiple sources.
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STOPAs a holder, buying the dip means adding fiat for me. It isn't effective. :)
Very in-depth scrutiny of what is going on with BITCOIN (BTC) and I enjoyed reading it. The post has added to my financial education and that is my big reason for being on @leofinance. I have always been in the habit of having a dictionary nearby when reading.
By reading posts like these, I add to my own mental financial glossary by looking up investment terms. I learned a number of new terms thanks to your article which peaked my interest:
🔄 RETRACEMENT: 180 degree turn in the direction of the price of a crypto coin
💲 DOLLAR COST AVERAGING (DCA): Buy a little bit of coin when the price is high, and buy more when the price is low.
🎈 BUBBLE: Price of coin going up fast
The definitions above are my understanding of the terms as used in your post. They are a bit juvenile and possibly oversimplified, but I am not the sharpest pencil in the box!
Thank you for encouraging me to learn more after reading your post!
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I've been lucky and sold high a couple of times now just before a dip. But I'm with you in that most of the time I don't have any free funds to buy dips. Trying to time any market is a losers game. Instead of buying dips, it might just be best to buy on some set schedule. $20/week, or what ever you are wanting to invest. Dollar cost averaging. Warren Buffet is a buy and never sell kind of investor.
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