Crypto,  Market Thoughts

Fear is the Most Contagious Emotion in Trading

The timeline is in shambles right now (April 30, 2024).

Bitcoin is on a downtrend, chopping around $60k, and most of my twitter feed is acting like it’s about to crack below $30k.

I get the feeling a lot of people didn’t actually get bullish enough to enter the market until previous all-time highs were breached, over $69k.

Bullish at resistance, bearish at support… it’s a tale as old as trading.

Just taking a look at the Bitcoin chart, it paints a picture that makes complete sense as to why the timeline is losing their collective shit.

As you can see, price is hanging around right at support. Nothing too crazy.

We also just had the halving, which typically involves a small down period around the event, followed by a massive uptrend.

This pattern has played out every single time there has been a Bitcoin halving. 

Yet still, people are freaking out like hormonal teenagers, because they obviously got dog shit entries.

If we take a look at the daily chart, Bitcoin is simply trading in a range.

Is it the most bullish looking chart? 

No, definitely not.

Does it concern me?

No, not really

Look, these are markets… and anything can happen.

However, I don’t believe these calls for far lower prices and proclamations that the bull run is over are coming from a place of cool headed, rational reasoning.

It reeks of fear!

In conditions like this, it doesn’t take much for an ember of unease to ignite, and become a raging wildfire of fear.

Fear is maybe the only emotion in this game that is more contagious than hopium.

Watching your unrealized profits shrink drastically, especially in a short time, can easily make one’s conviction shaky.

I’ve been trading off and on for about a decade, and been steady in crypto since late 2018.

One thing I’ve learned is that the masses are rarely correct in their calls of “It’s over!”.

Will there be a time in the next year or so that you need to sell your crypto?

In my opinion, yes. 

This cycle will top, just like all the others. 

When it does, it will be a long, boring and profitless market. 

You definitely don’t want to roundtrip all of your gains when that time comes. 

That time is not now though.

Now is the time to grab your balls, stand on your convictions, and not let the frightened masses on twitter scare you out of your positions! 

Especially if you were accumulating entries much lower.

We might see lower prices in the short term, I definitely don’t rule that out.

It would actually make a lot of sense to see one big capitulation candle where the Bitcoin price drops 20% in an hour, then recovers quickly.

That would wipe out a ton of levered positions, as well as shake out those with weak conviction.

If that happens, I’ll continue to chill and add to my long-term bitcoin bag with fresh wagie bucks.

My conviction is rock solid, and my money is most definitely where my mouth is.

That said, there are no guarantees.

Maybe this was a giant triple top.

Perhaps the global macro conditions are so fucked that this cycle will get kneecapped before it really spreads its wings.

It’s possible… but I doubt it.

Based on my experience, I just can’t see this being the top, and I’m willing to lose more money on paper to be proven right.

This game is all about making educated guesses and playing the probabilities.

And my educated guess is that this bull run is not done.

I’m not long because I’m drunk on hopium.

I’m long because I have good reason to believe the people selling here will want to commit seppuku in the next 6 months.

Until next time,

Fractal

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