While "no one" likes the falling prices (obviously those looking to buy do), what is interesting is that the lower the price of Bitcoin goes, the more tradeable it becomes, so while there is downward pressure, the daily volatility is increasing, as there are far higher percentage gains to be made in a far shorter timeframe.
And that is the last 30 hours.
For those who are looking at token holdings rather than holding value, this is a very good time to trade. In a "perfect" trade scenario of buying and selling the lows and highs, in the last 30 hours, One BTC would have been able to be traded into around about 1.75 BTC in that time. Of course, this is in the fantasy world of getting all of the highs and lows correct over that period, but as you can see, that is quite a change in value, where the holdings starting at around $21K worth, would be valued at $34.4K worth, even though the current price is about 6% lower than the starting price.
And, whilst this sounds attractive, there is obviously a lot of risk involved in those trades, where it could very easily go either way. But according to CoinMarketCap, trading volume in USD value is up 34%, which means that trading volume in BTC is up even more than that, since the price has decreased.
It is due to this volatility and potential to increase holdings that wealth is made in the bear markets, because the volume of holdings can be increased more easily and for cheaper, in a shorter period of time. But, humans like to see that wealth value in dollar terms in the moment, so they are selling into dollars to try to protect themselves and wait to buy back at the low. However, the traders, never stop trading, because the lower the price goes, the less pressure it takes to push the price upward and, because many people have sold, there is not as much competition to buy and once that competition starts, it is easy to sell again, driving the price downward again, setting up that constant mini panic selloff cycle.
For those who are looking long on their holdings, the immediate dollar value doesn't matter, it is the future value that is important and, that future value of holdings is multiplied by the amount held. For example, the lucky trader from the example above would have turned their 1BTC worth 67K at the ATH, into at least 117K at the next all time high. That is a significant gain in let's say, two years, considering it comes from a period of 30 hours of work.
If holdings are significant, falling prices "feel bad" in the short term and as a result, a lot of people go into hibernation, choosing to wait for greener pastures when their holdings increase again. The same thing happens on Hive, where often, activity drops, comments decrease and the competition on the HIVE pool goes down. However, regardless of the price of HIVE, the distribution is determined by "vests", meaning that all other things remaining equal other than price, the same HIVE is distributed by the same vote.
If for example my vote distributed 10 HIVE worth at 100% when the price is $1.00 per HIVE, it will distribute 10 HIVE worth when the price is 10 cents. The difference is of course on the HBD side of the 50/50 equation here, where the first vote would deliver 5 HIVE and 5 HBD, but the second vote would deliver 5 HIVE and 0.5 HBD. but, what needs to be remembered here is that the HIVE pool is all HIVE, not HBD - The HBD is created through an automatic conversion process at the blockchain level.
I think that where a lot of people struggle in crypto, is that they price it all in fiat. I remember that when I first started trading, I did this without realizing what I was doing and as a result, while my dollar value was increasing (due to upward market movement), my actuall holdings weren't changing much. It was only when I "forgot the dollar" that I really started increasing my holdings, because the value didn't matter any longer, the mass did.
Of course, the value matters if on or off ramping from fiat into crypto or vice versa, because obviously if on-ramping, you want to be able to buy low to maximize the amount of token and off-ramping, sell high to maximize the value moving into fiat - but other than this, dollar value isn't that important. But of course, if needing the fiat to spend in the "real world" - it definitely matters.
And, that is where a lot of people find themselves, because while a bear market might not be so much fun, a bear market in an economy headed for collapse is even less so, as people are less likely to be able to meet their financial obligations anyway, meaning they are already looking for additional income. If they hold crypto, that becomes the preferred source for many. However, if they don't hold crypto, what would they do?
Well, what did they do in 2008, 2001, 1990??
These were all pre-crypto crashes in the market and most people survived. They tightened belts, trimmed back on the unnecessary, gave up on various lifestyle expenses and reduced their financial footprint to ride out the economic storm. The earlier they made the changes, the more likely they would survive and faster they recovered, whilst those who postponed, were served a double blow.
Moving early into the reduction cycle allows people to not only save resources, but also potentially expand their holdings at the bottoms with the savings. This means that when the reversal happens, they have a larger mass of assets that will compound upward. But those who postponed, got financially punished more heavily on the way down, forcing a more extreme bottom, but also had a reduced amount of holdings for the other side, increasing the tail of their recovery.
It isn't easy to make the decision to reduce spending, especially when it is on things that we look forward to and value, but postponing is going to amplify the economic hardship on the way down and reduce the amplification on the way up. Those who sacrifice their finances early however, have padding to soften the landing on the downward cycle and a larger foundation surface area to build upon as economic recovery takes place, giving them more potential to build back faster, as there is "less competition" on the asset pools.
This means that by the time the postponers have recovered and are entering into the markets again heavily, the early savers are in a strong positive position getting additional benefits, meaning that they could even start selling early, so they can make gains and still have significant holdings to dump at the top, giving them more resources to pick up again at the lows.
None of this is in our human nature however, which makes it very hard to do consistently, but those who build the processes and can somewhat "automatize" it to be their default, will continuously be making either dollar gains on the upside or asset volume gains on the downside to always be increasing their holdings, one way or the other.
I personally am not good at this, but I am trying to improve and get into the habits required, but my own mindset seems to play against me, where while I am very keen to buy the bottoms and do so, I am very resistant to sell the tops, even if I am in a significant gain position. This leaves me with far less potential on the downside than I should have, which reduces my upside potential the next time around.
Who knows if I will ever learn to make it habitual, but in theory, I know what I should be doing and right at this moment, that means reducing my liabilities and obligations, so as to soften that bottom and perhaps even, expand holdings a little. Yes, I should have started earlier and at a greater rate than I did.
Taraz
[ Gen1: Hive ]
Posted Using LeoFinance Beta
It's the time to evolve and adapt to every economical and financial crisis that may hit the World at large.
We are all in this together and our actions now will determine our positions in the future.
While some find it hard to cut down expenses or change their lifestyle, those who do will reap greater benefits than those who just ride with the world.
We are mostly in this together - a small slice seem to be in a league of their own.
Riding with the world these days generally leads to doing what we are told to do, which tends to get below average results - the new average.
Yeah, bitcoin is offering a blue light special of basement prices. Smart money is buying, and if I were smart I would too. But I am not that tech savvy. We do our best as imperfect people and that is good.
Buy a little here and there - who knows what it becomes in a few years :)
Here are some Warren Buffett quotes:
"meaningless reassurance" - that is most of the market sentiment... :D
not easy to do this in real-life, especially not with 1 BTC.
I several several people try to do this with hive, probably you included, and been moderately successful, but I know at least one individual where this backfired big time.
With my 30 year of trading experience, I personally don't try to do this :) Risk:Reward ratio and the probability not in my favor.
Yeah, the chances of getting this right is tiny, but my point is there is still plenty of opportunity with the volatility - it doesn't have to be done in 30 hours :D
I haven't been very successful as a trader - because I hold too much!
Nothing wrong in holding. That’s investment. I hold a lot myself. However I also trade still. Mostly futures and definitely not crypto.
yeah - I mean I tend not to be able to sell! So I hold all the way up, all the way down... over and over...
:D
Panic seller always face loss from the both side. I also think that when the market is in bearish zone it's a good time to trade( not always) but it's the best time to invest fir the long time. I am accumulating as much as i can in such kind of time.
At the very least, it is time to accumulate, but in order to do so takes having something to invest in. Many don't or aren't willing.
I think if transaction volume of BTC is getting higher, the price of which won't fall that sharp.
"I am very keen to buy the bottoms and do so, I am very resistant to sell the tops, even if I am in a significant gain position."
Apologies, but I have no idea how to quote from the article :D
That's exactly the same as me, willing to buy low but not willing to sell high. Sometimes I wonder if it's just plain greed as I keep thinking it will go just a little higher.
This could be all one needs to survive the bears and build their stash of coins. I love how it ends up showing that knowing does not mean doing. You have start training your self to do whats right as you nature has created parttens and behavious that define you. Though not beneficial but you find your self doing them dispite knowing whats best for your portfolio
Trading is hard and I think we need more people to learn about financial education. I have a feeling that most people don't really pay attention to things like cutting costs or investing.
Posted Using LeoFinance Beta
In the bear market I tend to look at my previous holdings and compare their past values vs. present, then think whether it's good to invest. I've been trying to accumulate Hive when I can and while the dip is still holding on atm. I think bearish market will not last long and this is the time to get hold of other stablecoins as investment for the future. As they say...no risk no fun.