Now let’s make a plan to buy the dip during this bull-market correction.
Bitcoin has been trading around 80,000 for a month. I’m sure many people are already feeling miserable, being tossed between euphoria and despair by this choppy market. But we need to stay calm, because opportunities take shape amid pessimism.
We’ve said that there are two major buy signals in a bear market:
1. There’s broad consensus that it’s a bear market.
2. Pessimism leads to a consensus around an absurdly low price.
We need to use these two signals to guide our upcoming buying plan.
Since we’re still in a bull-market correction, even a bottoming phase will be gentler than a bear market. So let’s adapt these signals to better identify a bottom during a bull-market correction:
1. People start to doubt that the bull market is still intact.
2. Pessimism leads to a consensus around an even lower price.
Whether the market continues to move sideways or takes a sharp dive, people’s emotions will be the same when it comes to confirming a bottom. When we see ourselves and most other people starting to doubt whether the bull market is still alive, and we keep seeing people tout an even lower price, that’s when we should go all in.
At a true bottom, people won’t reject an absurdly low price. If we’re only in the middle of a correction, most people will push back against it, because greed is still there and bullish sentiment remains strong.
For example, if you see lots of people starting to say Bitcoin will fall to 70,000, or even below 70,000, don’t just foolishly wait for that price. Be bold and act at that point.
1. If you still have cash left, deploy it all.
2. If you’re already fully invested, consider a coin-margined contract with a 10% position.
The essence of a bottom is that selling pressure has been exhausted. To shake out everyone who lacks conviction, most people need to believe that prices will fall further and lower—not doubt that possibility. The best signal for testing whether we’re in that state is “consensus around an even lower price.”
Another benefit of this signal is that it gives us an adequate margin of safety. Most people who sell at a loss or get liquidated do so because they bought at the wrong stage—usually by chasing the first major drop. The typical sentiment at that point is FOMO-driven dip-buying and greedy bullishness.
When our signal appears, it’s much easier to buy near the bottom. Even if prices fall further, the drop is likely to be small.
Most of the time, we stay on the sidelines, waiting for key signals. When they appear, we act decisively. $ETH
Bitcoin has been trading around 80,000 for a month. I’m sure many people are already feeling miserable, being tossed between euphoria and despair by this choppy market. But we need to stay calm, because opportunities take shape amid pessimism.
We’ve said that there are two major buy signals in a bear market:
1. There’s broad consensus that it’s a bear market.
2. Pessimism leads to a consensus around an absurdly low price.
We need to use these two signals to guide our upcoming buying plan.
Since we’re still in a bull-market correction, even a bottoming phase will be gentler than a bear market. So let’s adapt these signals to better identify a bottom during a bull-market correction:
1. People start to doubt that the bull market is still intact.
2. Pessimism leads to a consensus around an even lower price.
Whether the market continues to move sideways or takes a sharp dive, people’s emotions will be the same when it comes to confirming a bottom. When we see ourselves and most other people starting to doubt whether the bull market is still alive, and we keep seeing people tout an even lower price, that’s when we should go all in.
At a true bottom, people won’t reject an absurdly low price. If we’re only in the middle of a correction, most people will push back against it, because greed is still there and bullish sentiment remains strong.
For example, if you see lots of people starting to say Bitcoin will fall to 70,000, or even below 70,000, don’t just foolishly wait for that price. Be bold and act at that point.
1. If you still have cash left, deploy it all.
2. If you’re already fully invested, consider a coin-margined contract with a 10% position.
The essence of a bottom is that selling pressure has been exhausted. To shake out everyone who lacks conviction, most people need to believe that prices will fall further and lower—not doubt that possibility. The best signal for testing whether we’re in that state is “consensus around an even lower price.”
Another benefit of this signal is that it gives us an adequate margin of safety. Most people who sell at a loss or get liquidated do so because they bought at the wrong stage—usually by chasing the first major drop. The typical sentiment at that point is FOMO-driven dip-buying and greedy bullishness.
When our signal appears, it’s much easier to buy near the bottom. Even if prices fall further, the drop is likely to be small.
Most of the time, we stay on the sidelines, waiting for key signals. When they appear, we act decisively. $ETH