Crypto has been on a wild ride.
Out of nowhere we dipped to $58 just like I said we would. Did I have shorts open? Of course not! I was longing the dips hoping to catch some bounces. There were no bounces, frens. I started 10x longing around $61k... then I set up a limit order to double down at $59k (which was the MA(100) average point)... then I set up another triple down at $58k thinking surely that would be the bottom.
It was not... the bottom.
I woke up a bit horrified on the first of the month to find that the price had crashed below $58k down to $56400. Look at where I set my stop-loss: $56277. Got damn! I was a 0.2% dip away from getting totally burned on this triple down. When I woke up that day on May 1st I realized just how closely I had flown to the sun. I was actually risking a lot more money than I was comfortable with but there was nothing I could do at that point. I just had to let it ride.
Now that we are back near $62k I was able to derisk the position a bit. I went from in the red -$1000 to green +$1000 in two days. Again, these were much higher stakes than I had originally intended. Lesson learned. It actually kind of reminds of almost dying in a hardcore video game where you'd of lost everything on death. Too close for comfort... but also it creates a kind of thrill-seeker gambler's high that many find themselves chasing even though it's extremely dangerous behavior; pushing the boundaries until we're finally caught with our hand in the cookie jar.
Personally I've played enough games (gambling and otherwise) to know that a near miss such as this is a signal that we have either gotten very unlucky and that's just the cost of doing business: or much more likely we're taking too many risks and need to chill out. In this case it is almost certainly the latter.
My analysis of this situation is that I got much too comfortable with shorting the market. Shorting the market is just a hedge, while longing the market is degenerate. If I lose a couple thousand dollars on a short it's no big deal; I haven't even lost any money on paper at that point as all my other bags are up more than I lost. Meanwhile if I get burned on a long I lose on that bet and thousands upon thousands across all my other crypto bags. Not fun! Not a good strategy!
Something else I have to consider is that I usually set very aggressive stop losses. That was not the case this time around. My stop-loss was set up in such a way that I was going to lose 70% of what I put in rather than 10%-20%. This was another main reason why I was risking way more money than I originally intended. Just another thing I need to be keeping better track of if I want to manage my risks correctly. The fact that it worked out in my favor this time is no indication that I made the correct decision in the moment.
So what happens next?
In the short term I'm still betting that we'll be going up until May 8th. This is a date I've been focused on for a long time and it could signal a make or break moment for the industry in the short term. It's still very unclear if summer is going to bearish or bullish at this point.
Common sense tells us it should be bearish because of how overblown we got with ETF approval and the halving pulling through around the same time. However this market is anything but rational and if we still could have catching up to do because of how bad the last cycle was compared to how good the current one is now.
If we look at the mountain of FUD over the last few weeks we had all the excuses in the world to crash a lot harder than we did. I'm actually glad the FUD is so strong right now because it's a good indication that we are still strong rather than waiting for an excuse to nuke. We've already gotten multiple nukes and all of them were quite tame on a relative scale.
I'm hoping to be trading around $65k within five days, but after that who knows. At the end of the day all these moves are so small we can still be considered to be crabbing sideways. I find it pretty hilarious that everyone lost their mind on the recent "flash-crash" to $56k. That move was less than a 10% dip in comparison to various local lows. The entire move from the $74k peak is less than 25% to that $56k level. Basically exactly the dip we'd be expecting if the market is still bullish and we were about to engage in a bullish summer. One can hope.
Conclusion
Some have you may noticed that my posts are a bit more terse than usual. It's funny because I often have a very hard time writing 1000 word posts and I almost always splash into the 1500-2000 target range. I guess getting the flu has a way of slowing me down. Silver lining.
The $58k gang held the line quite well. The recent dip in the market could have been the bottom I've been looking for since March. $58k has been the target for a long time, but if summer is a dud $50k come September if definitely still in the cards. Luckily we can't go much lower than that because there's just simply too many fundamental developments happening at once and stacking atop each other.
My only question is if we're going to get some nice price action in summer or if we are going to have to wait this out till the end of the year. All the history and fractals point to a bearish summer, but also the market we are in now is unlike anything we've ever seen.
Keep grinding.