The too late mindset isn’t good for your psychology. It makes you feel like shit. When people think about bitcoin I quickly see them become disappointed. They wish they had listened earlier. Or they wish they had bought at least one bitcoin when the price was lower.
The problem with bitcoin is you can never buy at a good price. Why? Bitcoin keeps being the best-performing asset each year, and is now the best performing asset of the decade. Think about that. This is the superpower of bitcoin. It doesn’t matter when you buy it. What matters is that you do eventually.
Buy low, sell high
We’re taught to buy assets at a low price and sell them at a higher price. What if this was industrial age factory worker thinking?
The best time to buy bitcoin is when you decide to.
The reason is, bitcoin has a fixed supply of coins and predictable code built into it that tells you its future. You don’t have to be a genius to understand bitcoin’s future price.
A Dutch institutional investor known as Plan B created a stock to flow model which helps investors understand where the price is going based on the hard-coded, predictable monetary policy of bitcoin.
Once you understand stock to flow, then you’ll understand the overwhelming dollar value of guaranteed scarcity.
I want to shake up your thinking. The opportunity of bitcoin has nothing to do with price. Bitcoin solves a problem. The current value of the circulating supply of bitcoin is roughly $355 billion.
The current value of the world’s supply of gold is about $9 trillion. The current value of the world’s supply of derivatives (a popular financial instrument people dump money into) is $640 trillion. The current value of the world’s supply of stocks is $95 trillion.
If only a small amount of money moves out of one of these asset classes and into bitcoin then the price will skyrocket.
Investment firms are buying bitcoin, not because they want to, but because they have to. There are very few places you can put your money and get a return. There are even fewer places you can put your money to store it safely in the event of a downturn or recession.
I don’t personally care about the bitcoin price. I care about the problem it solves and whether over the long-term there is a financial return likely to occur for doing so.
The worst way to invest as an everyday person is for the short term. One of my early investments in bitcoin was short term. I bought a lot and then sold it when the price crashed in 2017. That short-term thinking has meant I’m working a few years longer than I need to.
I would be retired if I still had all the bitcoin I owned in 2017. I’m okay with that. My investor psychology was weak back then. I needed to see a few 50% drops to learn my lesson. The March 2020 covid crash was certainly a good test, and I passed without selling any bitcoin.
Thinking about the assets you invest in over the long term helps reduce your stress levels. You’re less worried about whether it’s “too late” or “is now a good time” and focused on doing your research and understanding what you’re buying. This phrase sums it up better than I could:
Time in the market beats timing the market.
It’s going to be bad for your psychology. When euphoria hits an asset like bitcoin, people lose their minds and throw a wall of money at it. How do I know? I lived through the euphoric phase of bitcoin back in 2017.
People I worked with went from IT professionals to wild gamblers in a day. Every computer screen in my office at one point was showing the bitcoin price. One guy in the office mortgaged his house to buy bitcoin.
The problem ended up being rather unusual: people didn’t buy bitcoin. They bought shitcoins that were worth less than $1, thinking they’d get rich. That’s what euphoria can do to people’s thinking. It isn’t pleasant to watch — and it will happen again. The use-case for bitcoin was born during the pandemic. This is going to create ongoing euphoria.
With Citibank throwing numbers out like $318,000 USD per bitcoin, and the price going over the all-time high of $20,000 USD per coin, people are guaranteed to collapse on the ground with a case of FOMO.
What can you do about it? Stay calm. Your life won’t end if you don’t buy bitcoin. Take your time and research it. Start by reading the book, “The Bitcoin Standard” and go from there.
Patience always wins when it comes to investing.
Nothing you put your money in is perfect.
The biggest risk of bitcoin has always been the potential for it to be banned. In 2017, the risk was enormous. Over time that risk has decreased as more and more adopters of the technology — like PayPal and payments company, Square — have offered the product to their customers.
The likelihood of bitcoin getting banned is almost zero.
What will happen to bitcoin, though, is regulation. Regulation just means you will have to be identified when you buy and sell bitcoin. Unless you’re a drug dealer breaking the law, regulation is good for your investments. With more regulation comes more opportunities for legitimate wall street firms to invest their money in bitcoin and use it for what it was made for: a store of value.
The other risk is your coins get stolen. The old school way to fix that issue is to purchase a Trezor or Ledger to store your coins in. I’m going to give you the non-technical definition of a hardware wallet:
A hardware wallet takes your bitcoin off the internet.
When your coins are off the internet nobody can access them except you. This is how you stay safe and prevent a Russian hacker from stealing your coins while you drink your early morning coffee by the jacuzzi.
Scarcity is the one attribute both bitcoin and gold have.
The issue is, the scarcity of gold is controlled by humans. The scarcity of bitcoin is controlled by nobody and can’t be changed.
Every year the gold supply increases by roughly 2%, as new gold is discovered and mined. With oil, humans invented a technological advancement called fracking which became popular in 1949. Humans could invent more ways to mine gold. We could also throw lots of money at gold to mine more of it. The final option is to mine asteroids for gold.
Doomsdayers say that if NASA decided to bring an asteroid home with them from space it would “destroy commodity prices and cause the world’s economy — worth $75.5 trillion — to collapse.”
I think this is ridiculous. Humans may mine asteroids for gold but it’s probably a long way away and incredibly difficult to do. I don’t see the downfall of gold coming anytime soon. But I do see the 2% increase in the supply of gold every year as an unfortunate feature of the metal.
The speculation over banks manipulating the gold price is another factor to consider when thinking about the difference between bitcoin and gold.
Bitcoin is different to gold. It’s understood my digitally savvy millennials and doesn’t require a safe to store it in or muscly arms to hold it. There is no one owner of bitcoin. You can’t rip Zucks out of bed when he’s butt-naked and drag him to court so you can sue him over your grievances with facebook.
There isn’t a human or company to sue when it comes to bitcoin.
Bitcoin’s supply is fixed.
Bitcoin technology is owned by nobody.
Bitcoin’s inflation rate is locked and guarded by code.
Bitcoin has no ego because no billionaire owns it.
Bitcoin is an egoless, non-existent company.
The game-changer with bitcoin is the network is owned by the users. Users own and give the technology value.
Venture capitalists, bankers, and politicians don’t get to give bitcoin a permission slip or approve its use. Every person from every country in the world gets to vote on bitcoin with their smartphone by buying it.
Ric Edelman, founder of RIA Digital Assets Council, makes the idea of investing in bitcoin easy.
He recommends to his clients as a financial advisor to consider a 1% allocation in bitcoin. If you have $10,000 in savings, then consider a $100 investment in bitcoin.
He says if you had invested 1% of your money in bitcoin in 2020, then it would have lifted everything you’d invested in by 25%.
Now my approach is different. I’ve spent more than five years understanding how bitcoin works so my allocation is a lot more aggressive than 1%. But if you have no idea and want to access the benefits of bitcoin, then a 1% investment is hard to look past.
A slow approach you can steal from the pros
Iconic hedge fund managers like Raoul Pal use a dead-simple approach: dollar-cost averaging. Here’s how to do it.
Step 1: Decide on how much bitcoin you’re going to buy every month. Let’s say you decide on $100.
Step 2: In the first month, invest $100 into bitcoin. The price might be at an all-time high.
Step 3: In the second month, invest $100 into bitcoin. The price might be at an all-time low.
Step 4: In the third month, invest $100 into bitcoin. The price might be going up again.
Step 5: Keep investing $100 every month until you’ve reached your desired investment amount (let’s say your desired amount is 1% of all your money goes into bitcoin).
With this approach you can smooth out the price you get into bitcoin at without stressing and losing your mind. Some months the price will be high, and some months the price will be low. Just like a savings account, you don’t care. You lock your money away and let it be protected by code, not humans.
It’s not time to panic.
It’s time to digitally upgrade your financial education.
Physical cash in your wallet and nuggets of gold you take inside with a wheelbarrow is the pre-digital financial world. The world of money is a long way behind advances in technology.
Bitcoin is trying to catch the financial world up with the digital narrative, so we can use the phone in our pocket to go about our day and store our money without its value being secretly eroded away and taxed by inflation, by the pinstripe suit club.
If you’ve been thinking about bitcoin, do your research. Go down the rabbit hole. Avoid FOMO. Stay away from the hype. Understand the problem it solves, intimately. Get to know bitcoin like you would a new lover you invite into your bed to shag.
The best time to buy bitcoin is when you understand it and see its value.
Bitcoin Price Prediction: BTC freefall to $42,000 beckons amid extremely drained bullish front
- Bitcoin rejection from $52,000 leads to unstoppable declines under $50,000.
- Technical indicators flip bearish for Bitcoin, adding weight to the impending price drop.
- The IOMAP model reveals immense resistance ahead of BTC and robust support, hinting at a potential consolidation.
Bitcoin continues to explore price levels under $50,000 following a recent rejection at $52,000. Initially, traders anticipated support at the 100 Simple Moving Average (SMA) and the 50 SMA on the 4-hour chart, but the gravitational force seems extremely hard to stop.
Meanwhile, the bellwether cryptocurrency is trading slightly above $47,000. Short-term technical analysis shows that the least resistance path is downwards. This is emphasized by the Moving Average Convergence Divergence (MACD) on the same 4-hour chart.
The trend momentum indicator has also flipped bearish following the MACD line (blue) cross under the signal line. Additionally, the technical indicator is falling toward the midline and may extend the action into the negative region.
Bitcoin is expected to secure support at the 200 SMA to halt the losses. However, if push comes to shove, BTC will extend the bearish leg to $42,000 due to the lack of a robust support area.
BTC/USD 4-hour chart
The In/Out of the Money Around Price (IOMAP) model by IntoThepBlock bolsters the massive resistance ahead of the flagship cryptocurrency. Recovery from the current price levels to $50,000 will not come easy, especially with the selling pressure between $48,450 and $49,816. Here, nearly 1.1 million addresses had bought 504,000 BTC.
On the flip side, the same on-chain model reveals that Bitcoin’s downside is also strongly supported, which means that losses as far as $42,000 may not come into the picture. Consolidation may take place owing to the support running from $45,660 and $47,026. Here, approximately 739,000 had purchased 445,000 BTC.
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Bitcoin and Ether Whales Prepare for Market Rally as Altcoins Outperform Top Cryptos
Bitcoin and Ethereum whales are preparing for a renewed cryptocurrency market rally, grabbing as much of both cryptoassets’ total supply as they can before prices move up in the near future. According to crypto analytics firm Santiment, Bitcoin’s largest holder – those with over 1,000 BTC or more, worth about $49.8 million at press time […]
Bitcoin and Ethereum whales are preparing for a renewed cryptocurrency market rally, grabbing as much of both cryptoassets’ total supply as they can before prices move up in the near future.
According to crypto analytics firm Santiment, Bitcoin’s largest holder – those with over 1,000 BTC or more, worth about $49.8 million at press time – now hold 42.56% of the flagship cryptocurrency’s total supply, after dropping from 43.29% on February 8. Their large supply helped fueled bitcoin’s move to a new all-time high to $58,000.
Per the firm, if whales control over 43% of bitcoin’s total supply, it will be an “indication whales are looking to fuel another rally.”
Large holders taking over a larger portion of the cryptocurrency’s supply may help reduce selling pressure and even lead to a supply squeeze, as demand from other buyers remains while available supply drops significantly.
Santiment, as Daily Hodl reports, also revealed that Ethereum’s 10 largest addresses that are not controlled by cryptocurrency trading platforms are holdings the “most combined supply of ETH tokens (16.86M) since July 2016.”
Earlier this month, over 1 million ETH ($1.57 billion) was added to these addresses, showing they’re gearing up for a move upward.
In separate tweets, Santiment pointed out that while whales prepare for a BTC and ETH rally, smaller cryptocurrencies have been outperforming these blue-chip cryptos, likely because of demand coming in from retail investors.
Altcoins outperforming both BTC and ETH include Polygon (MATIC), Enjin (ENJ), Theta blockchain’s governance token Theta Fuel (TFUEL), and XinFin (XDC). These are outperforming bitcoin at a time in which the cryptocurrency struggles to remain above the $50,000 mark.
Other metrics point to an upcoming cryptocurrency rally. The amount of bitocin held on cryptocurrency exchanges has been steadily dropping over the last few weeks, to the point that over the last 30 days an estimated 46,900 BTC, worth over $2.3 billion, is believed to have left trading platforms.
The bitcoin balance on cryptocurrency trading platforms is often used by analysts to gain insights into what BTC investors are thinking. A large amount of bitcoin leaving trading platforms shows investors are looking to self-custody their funds, presumably because they plan to hold onto them for some time. This reduces selling pressure on the cryptocurrency.
Featured image via Unsplash.
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TA: Bitcoin Price Back Below 100 SMA, Why BTC Could Retest $45K
Bitcoin price failed to stay above $50,000 and $49,000 against the US Dollar. BTC is now below the 100 hourly SMA and it is likely to continue lower towards $45,000
- Bitcoin started a fresh decline below the $50,000 and $49,000 support levels.
- The price is now trading well below $50,000 and the 100 hourly simple moving average.
- There is a connecting bearish trend line forming with resistance near $49,000 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- The pair could extend its decline towards $45,000 as long as it is below $50,000.
Bitcoin Price Turns Red
After forming a short-term top near the $52,600 level, bitcoin started a fresh decline. BTC traded below the $51,200 and $50,000 support levels to move back into a negative zone.
There was also a break below a major bullish trend line with support near $49,500 on the hourly chart of the BTC/USD pair. The pair even broke the $48,000 support level. There was a clear break below the 50% Fib retracement level of the upward wave from the $43,050 swing low to $52,650 high.
It is now trading well below $50,000 and the 100 hourly simple moving average. It seems like the bulls are trying to protect the 61.8% Fib retracement level of the upward wave from the $43,050 swing low to $52,650 high.
Source: BTCUSD on TradingView.com
If they fail and the price trades below $46,500, there are chances of more losses. The next key support is near the $45,000 level, below which the bears might aim a test of the $43,000 support zone.
Fresh Increase in BTC?
If bitcoin stays above $46,500, it could correct higher. An initial resistance on the upside is near the $48,000 level. The first major resistance is near the $49,000 level and the 100 hourly simple moving average.
There is also a connecting bearish trend line forming with resistance near $49,000 on the same chart. To move into a positive zone, the price must clear the trend line resistance and then gain pace above the $50,000 barrier.
Hourly MACD – The MACD is now gaining momentum in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now well below the 50 level.
Major Support Levels – $46,500, followed by $45,000.
Major Resistance Levels – $48,000, $49,000 and $50,000.
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