How to Catch a Falling Bitcoin Knife
Another Ultra Long Term chart ( I hate doing short term trades !)
Here is a VERY IMPORTANT quote from Jason Shapiro from the book “Unknown Market Wizards” by Jack Schwager:
" Everyone understands that the market is a discounting mechanism. What people don't understand is that the discounting mechanism is not the price, it is participation. Its not that the price has gone from 50 to 100 and thus the bullish fundamentals are discounted. Its about everyone is long and hence bullish fundamentals are discounted. An example: when amazon stock was about 700-800 everyone said it was ridiculous, calling it a bubble. It was clear though that most people didn't own it else they would not call it a bubble. The stock is now trading above 2300 based solely on participation."
So here is a take on participation (measured using VPVR) over two BTC bull runs (signaled in the chart with a 50-100 MA cross) :
A: Participants who think halving is bullish accumulate thinking (rightly so far) doing so will be a low risk trade.
B: Participants add on to existing positions on bullish confirmation that halving has caused a price rise, long term bears with a functioning pre-frontal cortex jump in.
C: Participants who bought the top in the previous cycle try to get rid of their trauma seeing that price is back at their buy price. Buyers buy their bags. People who are hyper intelligent rationalize that previous top should be the new resistance sell. Too smart they are. The real resistance was Price level B.
D: Participants who think they will buy BTC when it crashes below previous ATH, fomo at these levels after BTC has a near vertical rally, offering no point of entry. Some folks who sold at C buy back again, continuing to rationalize that at least they averted a “potential” bearish scenario.
E: WELCOME NOOBIES
People who do not have the stomach of bearing pain for long term gain, sell at break-even OR at a loss. So two patterns emerge:
1. BUY > price goes down (trauma) > price goes up (hope) > SELL (relief) , OR
2. BUY > price goes up (euphoria) > price goes down (shock) > SELL (relief)
Next bear market bottom: Placing some bids around D and E to catch a falling knife seems to be a good idea. Average in of course coz you never know if price will actually reach D and E. Participants change over time. And as you I show in my display picture: No Pain, No Lambo😊
Here is a VERY IMPORTANT quote from Jason Shapiro from the book “Unknown Market Wizards” by Jack Schwager:
" Everyone understands that the market is a discounting mechanism. What people don't understand is that the discounting mechanism is not the price, it is participation. Its not that the price has gone from 50 to 100 and thus the bullish fundamentals are discounted. Its about everyone is long and hence bullish fundamentals are discounted. An example: when amazon stock was about 700-800 everyone said it was ridiculous, calling it a bubble. It was clear though that most people didn't own it else they would not call it a bubble. The stock is now trading above 2300 based solely on participation."
So here is a take on participation (measured using VPVR) over two BTC bull runs (signaled in the chart with a 50-100 MA cross) :
A: Participants who think halving is bullish accumulate thinking (rightly so far) doing so will be a low risk trade.
B: Participants add on to existing positions on bullish confirmation that halving has caused a price rise, long term bears with a functioning pre-frontal cortex jump in.
C: Participants who bought the top in the previous cycle try to get rid of their trauma seeing that price is back at their buy price. Buyers buy their bags. People who are hyper intelligent rationalize that previous top should be the new resistance sell. Too smart they are. The real resistance was Price level B.
D: Participants who think they will buy BTC when it crashes below previous ATH, fomo at these levels after BTC has a near vertical rally, offering no point of entry. Some folks who sold at C buy back again, continuing to rationalize that at least they averted a “potential” bearish scenario.
E: WELCOME NOOBIES
People who do not have the stomach of bearing pain for long term gain, sell at break-even OR at a loss. So two patterns emerge:
1. BUY > price goes down (trauma) > price goes up (hope) > SELL (relief) , OR
2. BUY > price goes up (euphoria) > price goes down (shock) > SELL (relief)
Next bear market bottom: Placing some bids around D and E to catch a falling knife seems to be a good idea. Average in of course coz you never know if price will actually reach D and E. Participants change over time. And as you I show in my display picture: No Pain, No Lambo😊
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