Market Cycles Are Fun but Don't Be The Guy Left Holding The Bag

about 3 years ago (Edited)

I love the optimism in the crypto community during bull markets. So much hope and joy! The sky is no longer the limit, we're all going to the moon and beyond! Lambos and private islands for everyone. You gotta love it.

This market cycle will be life changing money for so many people. The people that will really be rewarded are the folks that have been around for a few years, they bought on the way down, hit the bottom and hodled on the way up. Although some of them are professional hodlers and don't really care about price, the ones who will eventually sell are set up for some life changing profits.

So many new people are now entering the space. It's funny, because around $3500 I called a few people that were interested around $20K and said, "You know, I'm looking at these charts and it looks like this could be a nice place to start to DCA (dollar cost averaging) into Bitcoin and a few alts."

Most people laughed at me. Not ironically, these same people now want to enter the space at $60K. This is madness! It really is the perfect definition of FOMO.

A relative recently asked me to help set her up for trading. I was happy to do it, and told her to be careful. IMHO, now is not the time to enter the market as a noob. This is 2017 all over again. The people that bought the $20K top had to wait almost 4 years. That's a long time to hodl.

Take it from me. Emergencies come up. Money is needed. Bills need to get paid. The whole time watching your bitcoin investment depreciate from $20K to almost $3K. Don't listen to me, you've got strong hands! You're not touching that money! Those are the moon bags! Well, sometimes it's easier said than done! As they say, life happens.

Scrolling through my Twitter feed I seen some great trading tips today.

Personal Crypto Trading Rule:
Never ever ever, under any circumstance, buy ATH
https://twitter.com/CryptoGodfatha/status/1382218923504934912

I learned this in 2017. I don't buy tops often, but when I do I generally get stuck holding the bag.

Don’t trade until you have enough capital to execute your chosen system. Being under capitalized can set you up for failure from the start.
https://twitter.com/SJosephBurns/status/1381944781207699456

Again, life happens. Make sure you have the capital, time and PATIENCE to execute your strategy.

I think the biggest meme of this market cycle is , "THIS TIME IT'S DIFFERENT" I remember that same mantra being laughed about in 2017. Sure each market cycle is a little different, but make no mistake about it, the coin prices go up, and the coin prices go down! These are volatile markets.

Somebody asked me earlier what I thought were good buys and I said...

"Write a bunch of tickers on a wall and throw darts at it blindfolded. Buy whatever the darts land on."

That's the point we're at in this market cycle. He then asked, "What are you buying?"

My reply: "I'm not really buying anything. I made all my buys last year. I'm trading chop and volatility and trimming larger bags taking gains on the way up. I'm not buying anything right now."

I partially lied, I do have a couple bags I'm building, but now is not the time for noob traders to jump head first into the deep end.(I'm not sure if the guy was a noob or not, but that tends to be a noob question) At least that's my thoughts on all this. Plus, I hate when people ask me that, they tend to get real salty if the trade goes the other way on them. DYOR (do your own research).

So what's my point to all this?

I'm not calling tops, and I have no idea how crazy this market cycle is going to get. I'm guessing, like a lot of others, we have a really great time until around October or November before we start seeing some signs of a reversal. I'm basing this on previous market cycles. Between now and then I suspect $75K to $100K is very possible. I've heard a couple other analysts I really respect predict a possible $200K top. I'm not that optimistic but it is crypto, anything is possible.

I also stand by my comment that at this point you could throw darts at a wall of ticker symbols and chances are most of the coins you hit will be winners till this market reverses. Even dead coins will pump when crypto madness hits the masses.

My point to all this is that if you're new or this is your first serious crypto bull run, BE CAREFUL. You don't want to be the guy buying the top, and you don't want to be the one left holding the bag.

If we reverse and fall into another crypto winter, you can end up holding those bags for a really long time. During that time a lot can happen. Exchange hacks, rug pulls, lost private keys... you'd be shocked to discover all the shit that can and will go wrong. Disappearing developers who lose interest in their project, regulations, fragged hard drives and corrupted backups, indictments, SEC fines, fud campaigns.

My point is, have fun, enjoy this wonderful market cycle but don't drink the kool aid. This time IT IS NOT DIFFERENT. It's just like all the times before with a few new players. Some of the names and faces have changed but the underlying game remains the same. Whatever you do, at the end of all this, DON'T BE THE PERSON THAT BOUGHT THE TOP AND GOT STUCK HODLING THE BAGS

This is post 14 of 31 for this month #HiveBloPoMo

Image credits Giphy