Bitcoin is making one All Time High after another; we’ve barely had a week without Bitcoin reaching record prices, in the past months. That being said, the Bitcoin market really started taking off after we’ve had a great Altcoin Season – and I think it’s safe to say it was the most intense Altcoin Season we’ve had, so far. Ever.
What normally happens after a bull market of such magnitude (even across multiple markets!) is a prolonged bear market, followed by a consolidation phase (Altcoins finding a bottom), just to start a new bull market. Regarding how huge the past season’s money influx was, it would only be natural to assume that the next Altcoin bear market would last a very long time… I even went as far as saying it might take anything between 0.5 and 2 years.
The Bitcoin Bull Run
But something changed: Bitcoin went higher and higher; everyone and his mother was buying Bitcoin, hoping for insane returns.
This didn’t leave Altcoin markets unaffected: they went lower and lower, and every time people thought they found a bottom, the markets proved them wrong, showing that it can always get even worse. People who didn’t sell during the last season now sold at massive losses, just to make sure they get at least a bit before it’s worth nothing, anymore. I’ve seen people becoming millionaires, just to give it all back during the next bear market. They gave back all their gains, and – that’s the important part – even more. That’s how the whales make their money; they seduce people with massive gains when all you have to do is buy at whatever price and wait a moment to sell higher to a greater fool.
You feel confident in your actions (because it works, right?), and you don’t realize that you’re about to be made a fool of, in that very moment you’re buying Altcoins at insane prices, selling them back to the market at a premium. The market tests you, over and over, making sure you’re good at what you do until it’s minted into your genes. Buy high, sell higher, over and over, rinse and repeat.
Then all of a sudden, market turns and you, dear new trader, sit on your computer, hoping for one more wave up, just so you don’t have to sell at a loss.
And suddenly, you find yourself in price regions where it just doesn’t make any sense to sell anymore. Congratulations, you’re trapped. You got greedy, “forgot” to sell and watched yourself becoming rich, just to give it all back – and probably even more.
Keep this in mind: making money is easy, keeping it isn’t.
But as markets move in cycles, you always get a chance to do it better next time. Just buy when everyone else is selling and vice versa. Be patient and find a proper entry; don’t be in a rush buying “bottoms” and you’ll be set for the next season.
You don’t wanna start your trades when everyone else is already making profits; you want to prepare your future profits when everybody else is at a loss. The bigger, the better – for you. See it as some kind of investment into your future joy. There’s no big gains to be made (at least not persistently) without some initial pain.
Speaking generally, your emotions are usually a good thing to counter trade. Because it feels good to buy a good performer, you will want to buy something the most when time for doing so couldn’t be worse. That’s usually the time you want to get rid of an asset. And when your inner devil tells you to sell something, despite being at a huge loss, you should be buying. Once you internalized that and you’re able to abstract that to coins you don’t even possess, yet (why would you feel an urge to sell a coin you don’t even have? … I assume you get the point), you have the basic skill set to become a permanently profitable trader who is able to extract money from the markets long term.
I will start a series of blog posts here which continue to explain this, give insight to what I’m going to buy, explain why I chose to buy it and illustrate it with some charts. Stay tuned!