Well this is a first for me.
An off the cuff post about my thoughts on the position we all find ourselves in.
This post will lack the regular swag of a “high quality blog post” but it gives me more time to focus on what I’m actually thinking and it’s an opportunity for me to test the waters of the kind of content you like to see.
I think high quality blog posts need swag; aka borders and pictures that give a blog post flavor.
Unfortunately I’m on my phone and this is the best I can do today.
Let’s get back to it!
I think one question on everyone’s mind is why is this bull so dam dull?
Well I think there are a lot of reasons but I can at least list a few.
These are my opinions so please keep that in mind; I’m welcome to be proven wrong which is how I learn.
So to start, why has Bitcoin seen upward price movement with less benefits to alts then we are used to seeing?
Well I would say it’s because it’s the behavior of the Bitcoin purchasers that drive alt price movement.
Typically, alts are pumped by Bitcoin holders that move some their gains to alts.
But this round ETFs in the US are driving significant price movement for Bitcoin.
We saw record highs before the halving which is unprecedented.
These holders can’t pass their gains to alts because there are not ETFs for alts.
So the gains in Bitcoin holdings in the ETFs or moving to “traditional” assets aka US stocks and bonds.
Clearly alts don’t benefit from that price movement but alt coin holders are still scratching their heads looking confused.
Another point is, there are way more alts these days which means less gains to go around.
Another thing I would point out is many of folks have learned from the last bull run that this is in fact a cyclical market.
Extreme price movements are not forever so more market participants are being cautious this round.
These players don’t want to sell their precious Bitcoin because it is becoming increasingly harder to accumulate; more of these people are becoming HODLers… at least as long as they can hold anyways.
Another thing I would like to point out is there is less leverage in the system.
Coinbase is very conservative on who they give leverage to which is very different than the FTX days where things indeed got crazy.
Lastly I would say the big boys are in bitcoin now.
Who are the big boys? Blackrock, Fidelity, and the long list of their peers.
These players invest differently, they avoid god candles at all costs and will try to keep the prices stable as long as they can.
The problem for them is Bitcoin is scarce and the exchanges are running low on reserves.
We really are in a sitting a wait position which is the market that many of us crypto enthusiasts don’t like to see; low volatility and sometimes sharp downward price movements before a gradual return to the average bitcoin price.
This is bad for traders on leverage because they are getting liquidated.
Margin is expensive and downward price movement crushes them.
I actually don’t trade on leverage for this reason, I typically buy when these folks get liquidated.
I don’t feel good about it but this is my place in the market, I buy low and I HODL my bitcoins.
So what’s the answer? What should you do?!?
I will do my regular thing and refuse to tell you what to do.
This is for you, the investor, to decided.
What I can say is you should always position yourself so you can sell when you want to and to buy when you want to.
There is always a bigger a fish and you need to understand that this is a big ocean filled with sophisticated players.
We don’t all have the time or resources of the big boys; it’s important to know where you are in the investment world so you can position yourself for success.
I think this market will continue to move sideways until it can’t; in my option there is not enough bitcoin at these prices and that dam will break.
When will that happen? I don’t know but I’m positioned for the upside. You should try to do the same.
As always easier said than done.
Good luck you rascals and cheers!
I’m looking forward to seeing you all on the other side.
❤️ Hurt