Last week, the majority believed that any price above $20k was your last chance to sell before things went to hell.
This week, the majority believes that any price below $20k is your last chance to buy at the bottom of the bear market.
With just a little bit of price action to interpret and no material changes in the news, almost everyone seemingly shifted to the opposite side of the boat.
But the boat is the same and the seas are still rough.
There is still a chance that the Fed raises rates by 75 or 100 basis points.
A recession is inches away (or here already).
Inflation can still rise.
Housing prices are sitting on a cliff.
And we all know that the COVID narrative can return any day.
The list goes on - Russian sanctions, the war in Ukraine, China’s lockdown, supply chain issues and Monkey Pox.
There’s no reason for sentiment to shift so sharply, simply because price zigged and zagged. Eventually there will be a bottom, and everyone that bought along the way will be rewarded. Flip-flopping emotions are a distraction, especially if you are buying as an investor for the long term.
How will you feel if Bitcoin drops to $15k? 10k? Both will be buying opportunities for me and neither is a time to panic. Zoom out.
There’s no way to change the macro environment, or the fact that crypto is at the mercy of global events.
Contagion from within is still a real threat.
But all of this will eventually end.
Crypto will likely be the first market to bottom. It’s our canary in the coal mine. This happened in March, 2020, although there are no guarantees that history will repeat.
Be patient, don’t change bias with the wind and take a long term approach.