How not to lose everything during the upturn
13. August 2020
With sentiment suggesting that Bitcoin (BTC) and the crypt markets are about to enter a bullish run, seasoned veterans are warning about the lessons learned from previous bullish spells.
With the Bitcoin price showing a 5% correction last time, the Crypt Fear and Greed Index has returned to 75. In this measure of sentiment that looks at the volatility, market volume and social networking activity of digital currencies, a reading of 75 is equivalent to „greed,“ just below the 84-or „extreme greed“-that was recorded on August 10. But both readings suggest that expectations for the coming good times are high.
Mati Greenspan: Bitcoin and S&P 500 no longer correlated
In a Twitter thread on August 11, MyCryptoWallet and MyEtherWallet co-founder Taylor Monahan shared some old tips, learned during the 2017 surge. She noted that the irrational exuberance of bull markets invariably attracts bad players who prey on the vulnerable.
Like moths to the flame
„They will make a lot of money and people will lose because exuberance, FOMO, greed and publicity are the most powerful things on earth,“ he wrote. Monahan believes that the time for hoarding has passed, and he pressured users to put 90 to 95 percent of their crypto assets into offline storage. She suggests that you don’t go looking for shiny new coins:
„Pick a few long-term legal tender coins that you like. Invest in them. Do your research. Don’t follow the lures […] You’ll win if you consistently make a profit, not if you try to get to the top.“
Monahan also emphasized restraint, noting that people who „go into huge debt to get kryptonie“ will not win, but rather „lose their home, their children’s savings. Don’t be those losers.
Like many experts, Monahan believes that investors should only risk 5% of their net worth, and once it is lost, they should not try to recoup those losses.
„Have fun with that, but once it’s lost, it’s gone. Don’t double down. Don’t take it out of your savings account or what you have stored off-line.“
Easy to say, hard to do.
Cryptomoney researcher Chris Burniske said in an August 7 tweet that it was „difficult to be adequately prepared“ for a bullish rally. He expects the enthusiasm of „crypt dependents“ to be 10 times greater than in 2017, implying that there may be reckless buying and selling of assets in the face of unfounded predictions.
„Speculation cycles have accompanied promising new technologies for hundreds of years,“ Burniske said.
„While no one can control them, we can control how we react, present, educate, communicate and manage space.
Pomp predicts Immediate Bitcoin price will exceed $400,000 in the long term
Fans of podcaster Anthony Pompliano will be familiar with his frequent tips on what to do in a rally. Some users believe that the advice is a curse, as every time he publishes it, the market seems to turn bearish.