4 Years of BTC and herd mentality in one chart
Hey guys, as you've seen on my previous forecasts on BTC and XRP, I've started to accumulate and increase my holdings. Besides the technicals, my bias is getting even more long biased due to the massive pessimism around inexperienced traders and overall media coverage. As you can see on the chart above, this is not the first time the world has witnessed such a huge drop on BTC. Back in 2014, when the total crypto market cap has dropped below 5 billion USD due to a massive sell off of -87%, the web was full of articles saying that Bitcoin is about to collapse. That it will end.During this phase, we've also witnessed the MtGox affair and the start of some regulatory talk. Some university professors and asset managers begun to throw out predictions that BTC will hit $10.
Once price has started to recover, you've suddenly heard nothing more from these people. The sentiment has been switched to "keep our mouths shut" till BTC slowly gained bullish momentum again. What happened then? The very same newspapers and magazines started to write articles that BTC is now "hip" again and it might become a big thing in the future. As soon as price started to really rocket, the very same procedure has started again. Jamie Dimon/CEO of JPMorgan, marketwatch.com, CNBC journalists and many others listed thousands of reasons why Bitcoin is bad, risky, a fraud and of course why we all should stay away from it. Guess what happened when the price started to drop again in January? Right. The very same thing. There is no "this time it's different". This market is still in its infancy and yes, there are other coins that might become the crypto #1 but no one knows when it will happen and we shouldn't actually care about, because for now we clearly see a heavy BTC dependance on other alts - despite the diminishing BTC dominance.
Long story short - I think it's extremely important to never, really never fall for any catching armageddon crypto headline out there. I am actually using all this as an contrarian indicator, meaning that a peak in both, heavy optimism and pessimism regarding cryptos should be a warning sign. People just went crazy in France a week ago or so, because some stores have been offering Nutella and diapers for a 70% discount. This thing has escalated so quickly that they've had to call the police. On the other hand, when people are been offering to increase their crypto holdings to buy back at a heavily discounted price of more than 70% , people are scared to death and even sell(!!!) their holdings with a massive loss. I mean..that's just insane.
It's not about having the most accurate entry or exit. Think of Michael Burry (The Big Short) or other investment funds who act during or prior to such a crisis,bubble,healthy correction (call it whatever you want). They rarely squeeze a trade out from the very bottom to the absolute top. Sure, they're doing their best to do so - but in the end it's about the final result. And speaking of this, it simply doesn't matter that much if you've bought in at $6k or $7k. Hell, let BTC even drop to 5k or 4k. That would be even better, as we can buy at much cheaper levels. And once BTC and alts start to gain bullish momentum again, you'll hear the exact same words, you'll read the exact same headlines on the very same magazines and newspapers. And yes, there will be again regulatory talk going on, people spreading rumours, maybe some bans, etc. It just doesn't matter in the mid to long run.
I've seriously read a comment below a tweet of Kim DotCom who advised people to buy BTC on the 5th of August 2016 with the words "Buy Bitcoin while cheap. Like right now. Trust me". You don't believe what an insane amount of hate comments he received and many were just like "mhmm alright". These peeps have probably the very same mentality to those who are laughing at others that say, BTC and alts with a proven concept will have another insane bull run in the near future.
Don't be a sheep. Don't panic. Be patient
Once price has started to recover, you've suddenly heard nothing more from these people. The sentiment has been switched to "keep our mouths shut" till BTC slowly gained bullish momentum again. What happened then? The very same newspapers and magazines started to write articles that BTC is now "hip" again and it might become a big thing in the future. As soon as price started to really rocket, the very same procedure has started again. Jamie Dimon/CEO of JPMorgan, marketwatch.com, CNBC journalists and many others listed thousands of reasons why Bitcoin is bad, risky, a fraud and of course why we all should stay away from it. Guess what happened when the price started to drop again in January? Right. The very same thing. There is no "this time it's different". This market is still in its infancy and yes, there are other coins that might become the crypto #1 but no one knows when it will happen and we shouldn't actually care about, because for now we clearly see a heavy BTC dependance on other alts - despite the diminishing BTC dominance.
Long story short - I think it's extremely important to never, really never fall for any catching armageddon crypto headline out there. I am actually using all this as an contrarian indicator, meaning that a peak in both, heavy optimism and pessimism regarding cryptos should be a warning sign. People just went crazy in France a week ago or so, because some stores have been offering Nutella and diapers for a 70% discount. This thing has escalated so quickly that they've had to call the police. On the other hand, when people are been offering to increase their crypto holdings to buy back at a heavily discounted price of more than 70% , people are scared to death and even sell(!!!) their holdings with a massive loss. I mean..that's just insane.
It's not about having the most accurate entry or exit. Think of Michael Burry (The Big Short) or other investment funds who act during or prior to such a crisis,bubble,healthy correction (call it whatever you want). They rarely squeeze a trade out from the very bottom to the absolute top. Sure, they're doing their best to do so - but in the end it's about the final result. And speaking of this, it simply doesn't matter that much if you've bought in at $6k or $7k. Hell, let BTC even drop to 5k or 4k. That would be even better, as we can buy at much cheaper levels. And once BTC and alts start to gain bullish momentum again, you'll hear the exact same words, you'll read the exact same headlines on the very same magazines and newspapers. And yes, there will be again regulatory talk going on, people spreading rumours, maybe some bans, etc. It just doesn't matter in the mid to long run.
I've seriously read a comment below a tweet of Kim DotCom who advised people to buy BTC on the 5th of August 2016 with the words "Buy Bitcoin while cheap. Like right now. Trust me". You don't believe what an insane amount of hate comments he received and many were just like "mhmm alright". These peeps have probably the very same mentality to those who are laughing at others that say, BTC and alts with a proven concept will have another insane bull run in the near future.
Don't be a sheep. Don't panic. Be patient
Comment:
Sorry for some typos! And it hasn't been a comment below Kim Dotcoms tweet, but the Kim's tweet itself where he advised people to buy BTC at the current levels.
Comment:
*but Kim's tweet itself. Oh man! haha
Comment:
Hey guys, as some of you have asked: I do now have a Telegram group! Feel free to join: t.me/bbgtv