Buy when there’s blood in the water

I should have published this two days ago. But the crypto markets moved faster than I thought they would!

This weekend was tough for a newbie crypto HODLer like myself.

Every time I checked the value of my crypto coins on Saturday, it seemed they’d swooped down another significant percentage.

“This is ridiculous,” I told myself.

“The best time to buy is when there is blood in the water,” I reminded myself. “When everyone else is panicking, that’s when you pick up good bargains.”

Steeling my nerves, I picked up a small position. I wasn’t daring enough to get anything more, but at least I wet my beak, so to speak.

I logged out and got busy doing other things until Sunday night. I anticipated seeing yet another new low, but, instead… the market was turning back up. I’d already turned a nice profit on the small purchase I made Saturday.

Lesson Learned: Buy when there is blood in the water

While I wish I had given this advice on Saturday, it’s still not too late. The crypto markets seem to be going bullish again, but it’s still pretty early in the upturn. Now might be the time to pick up some more positions, before values start to go up too much.

Is Crypto going back up? Are we back to the Bull Run?

I think so, but I don’t claim to read the future. However, I would like to share some thoughts with you re. this trial by fire we’ve recently gone through.

There can be more than one black swan event

Last week, we had several events that all seemed to attack the value of Bitcoin and the alt-coins. There was Elon Musk doing his tweet thang, China banning cryptos again — just like it has done every year since 2009, and then there was a cyber attack on a gas pipeline in the Southeastern United States.

Vitaly Buterin, the man responsible for Ethereum, which is probably my favorite crypto, put out a statement in which he pointed out that the more Musk tweets, the less he impacts crypto prices. Which is hopefully true. I just wish the annual Chinese crypto bashing had also become ineffective in moving the markets in irrational ways.

Because the bloodbath in crypto that occurred through the weekend seemed totally unnecessary. When you look at actual facts vs. hype and psych games — there were really no underlying changes to the fabric of reality to justify a 50% or more correction in crypto prices.

As Bitcoin plummeted back towards $30K, how many sold their crypto? Hopefully you were not one of those who did. Hopefully you HODLed on for dear life, or, better yet, hopefully you judiciously added to your position so that you can now cash in some profits.

Crypto will crash. Count on it.

I just think of Crypto as being akin to Microsoft. It will crash.

So, instead of fighting the inevitable — have a plan in place. I’ve decided my new plan is to get the heck away from the computer during a market crash. Sure, add a few positions if I’ve got ready cash, but then… walk away.

To put this in perspective — The latest tumble was on the order of 40%. But go back in time. In 2018, Bitcoin dropped from $20K to $3K. Once upon a time, Bitcoin HODLers became diamond hands while crypto experienced 80–90% drops. Now, the guys who held on back then — they were tough.

Don’t listen to the MSM

The coverage of cryptocurrencies in the MSM has, for the most part, been rather biased, IMHO. I’ve occasionally listened to a truly thoughtful story about crypto on NPR as well as read good articles on a few of the more tech-oriented sites such as MIT’s Tech Review. But for the most part, financial “experts” seem to harbor real hostility to crypto.

Maybe it’s because they don’t understand the technology, and it’s easier to hate or fear what you don’t understand?

We’ve got the likes of Paul Krugman and Greg Ip telling us that Bitcoin is worthless and we’ve got major news sites misrepresenting the news out of China by reporting a new ban on crypto instead of honestly pointing out that the Chinese government is merely adding to an existing ban.

We need more robust crypto exchanges

It seems that every time Dogecoin surges, Robinhood goes down. This doesn’t exactly inspire confidence.

During this last correction, Coinbase was down a lot, apparently, and it was not alone. Binance went down too.

Is it really too much to ask for these exchanges to be a little more robust? Spend the money on infrastructure. Or, don’t and you’ll get your shorts eaten by the next exchange that comes along that actually stays up while the rest are down. Some people will happily pay higher fees just to know they will always be able to execute their trades in a reliable and efficient manner.

Make sure to take profits!!!!

It’s really easy to be ruled by greed and fear. Fight this!

I didn’t allow myself to panic sell during this last crash, and I’m very happy I controlled my emotions. Now, I need to exercise the same restraint if cryptos continue to rise.

When the cryptos are rising, it’s really easy to talk about making 10x. But… maybe sell a little bit at 2x? Lock in a little bit of profit?

One’s strategy depends on one’s own risk tolerance. Theoretically, if you are willing to tolerate more risk, you can make more money. You can also lose a lot more.

Personally, I think it’s a good idea to set a few targets and divide up the profits you plan to take at each step.

So, let’s say your target for Ethereum is $10K and right now you’ve got some that you bought for $2K.

Why not plan to sell equal amounts at $4K, $6K, $8K and $10K, leaving a little in the kitty even after the $10K mark? Because, you never know…

Anyway, that’s one strategy. There can be others. You might decide to just get the heck out if Ethereum hits $6K because you’ve already figured out that tripling your money will get you the down payment on the house you really want so you can start a family.

Sometimes other priorities outweigh maximizing your crypto profits.

Hopefully this article has helped. If you panicked this time around and sold near the bottom — don’t beat yourself too much. There are lots of people in the same boat. Learn what you can from the experience and do better next time.

Source: https://levelup.gitconnected.com/buy-when-theres-blood-in-the-water-4be182058394?source=rss——-8—————–cryptocurrency