This run is still doing $BTC a favor. I said this afternoon

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--·Holding $BTC 5.8K USDT

This run is still doing $BTC a favor. I said this afternoon that I thought its rebound was too weak, and that it should break 80,000.

Turns out it was holding back for an evening surge! It’s shooting up like crazy—it’s already at 81,000.

诸葛投研

Wasn’t Trump’s crushing defeat in the midterm elections bad news? So why did $BTC go up?

Because you shouldn’t think about investing on the first level—you should use second-level thinking: everyone expected Trump to lose the midterms, so BTC had already fallen from $86,000 to $76,000 by today. (For example, I’d been predicting since mid-October that Trump would lose.)

Before the results came out today, the probability of Trump losing the midterms was 92%. In other words, 92% of the drop this result was expected to cause had already been priced in.

Since everyone had already anticipated the bad news, what was likely to happen today? Most likely, the news would be absorbed and trigger a reversal—that’s what’s known as second-level thinking. (I’m not saying this with the benefit of hindsight; I’ve held this view since last week, and I told my followers the same thing in private messages today.)

Of course, not every instance of bad news being priced in turns into good news. What matters is whether there’s even worse news ahead. Today’s V-shaped rebound was actually pretty weak; it only recovered the losses from the day before yesterday. The Democrats could turn against the crypto industry at any moment, so bulls don’t dare charge ahead aggressively.

If there’s no foreseeable bad news over the next two months, BTC will absolutely rebound to above $80,000.

BTC+3.51%