A Great Lesson To Learn – Things Can Go Very Fast With Bitcoin When the Fundamentals Are Great
Learn to see the bigger picture to not miss the big opportunity.
Written by Sylvain Saurel - In Bitcoin We Trust
Just a week ago, the price of Bitcoin broke the psychological barrier of $30K. For many, this was the beginning of a Bear Market in the Bitcoin world. All the Bitcoin naysayers were gloating at the sight of this Bitcoin price chart:
Market sentiment continued to languish at the bottom with extreme fear prevailing:
A majority of investors are missing out on incredible opportunities because they are afraid to act
In these moments, 99% of investors decide not to act. Many of them have already sold (at a loss) their Bitcoin purchased in early 2021. The rest was thinking that the price of Bitcoin may go lower.
Indeed, after breaking the $30K barrier, the price of Bitcoin could very well go lower and test $20K during the summer. I won't tell you otherwise.
However, the fact that Bitcoin can go down to $20K does not mean that buying Bitcoin at $30K as you have had the opportunity to do throughout June 2021 is not a great opportunity.
You know as well as I do the adage: "Buy Low, Sell High".
This adage is to be followed to make profits in investing, but you have to keep in mind that timing the lowest and the highest is almost impossible. That's why you have to act without always waiting for the lowest possible low or the highest possible high because you will always take the risk of doing nothing and missing unique opportunities.
You won't be able to act at the lowest possible and the highest possible every time
By the way, this adage is not called "Buy the Lowest, Sell the Highest". It's not a coincidence.
And then, the B-Word conference took place between Elon Musk, Jack Dorsey, and Cathie Wood from Ark Invest. This conference was very expected, and nothing extraordinary came out of it in my eyes. However, the fact that Elon Musk confirms that he still owns Bitcoin personally and that Tesla still owns its Bitcoin acted positively on the market.
Add to that then the rumor of Amazon entering the Bitcoin world by the end of 2021, and you have a capitulation of the Bears that allowed the price of Bitcoin to suddenly jump to $40K in a few days.
Suddenly, in the eyes of the general public, market sentiment turns around, and optimism returns in the Bitcoin market:
The return of the Bitcoin price to the $40K range is logical given the excellent fundamentals of Bitcoin
In reality, there is nothing miraculous here. In fact, there is a big lesson to be learned as the price of Bitcoin hovers around $40K and seems to be regaining volatility that could bring it back towards $50K during August 2021.
That lesson is that things can go very fast with Bitcoin when the fundamentals are excellent as they have been for the past several weeks.
I keep writing about it, like when I told you that the big opportunity was now at the end of June 2021: “The Big Opportunity With Bitcoin for the Coming Months Is Now — 8 Charts Confirming This Idea”.
The charts confirmed it. That didn't mean that the price of Bitcoin wouldn't go below $30K. It did mean, however, that while the price could, and still can, go lower, it will not stay there for long. I personally see 10 major factors that will allow the price of Bitcoin to reach $100K in the next few months:
The adoption of Bitcoin by countries
China’s ban on Bitcoin
Bitcoin’s share of electricity from renewable energy sources exceeds 50%
Tech giants to jump on the Bitcoin bandwagon sooner or later
The Lightning Network continues to grow
Institutional investor demand for Bitcoin
Billionaires endorsing Bitcoin
Superior monetary attributes that offer incredible guarantees
The macroeconomic environment remains extremely favorable to Bitcoin
The resilience of the Bitcoin system
This is inevitable in my eyes.
Bitcoin fills a need that more and more people will have: the need to protect the fruits of one's labor from the ravages of inflation in a way that is resistant to censorship.
Final Thoughts
With the Fed just announcing that it will maintain its ultra-aggressive monetary policy over the next few months and inflation that is breaking records in America, Bitcoin will continue to benefit from this favorable macroeconomic environment that highlights its strengths.
So to benefit from Bitcoin, you must learn to step back and focus on its fundamentals as I urge you to do constantly. Don't obsess about its short-term price, and get into the habit of taking a long-term view.
This will allow you to make the best decisions for your future regarding money.
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I love it when the media hype around Bitcoin fades while price is down. This is usually a good indication of the end of this short bear market and to resume the macro bullish trend. Since as long as you do your own research and stay away from the herd you will be doing great in cryptos.
I agree with you that 30K USD was a psychological level which in theory once broken down we should have entered a long bearish trend. However, that alone is just a single piece of the puzzle that you can’t solve without combining the other pieces (aspects of market analysis). In my opinion, the three aspects to market analysis are fundamental, technical, and sentimental analysis.
Starting with the fundamental aspect, It is more bullish than ever. As you mentioned in your article about how inflation is breaking a new record in America and how the Fed will be maintaining aggressive monetary policies. These fundamentals dictate the macro trend of Bitcoin which is up regardless of the small fluctuations we get by FUD or by any unexpected political events.
For technical analysis, I can confidently tell you that Bitcoin will go up to 100K USD by the end of 2021. You can see in my Chart Analysis article for Bitcoin (Bitcoin Price Update 07/27/2021) since I analyzed Bitcoin for short and long terms starting with small time frames like hourly chart going up to weekly chart. Briefly, price has been following a gigantic rising channel and price found support near the 50% retracement level and got rejected from it with great volume which indicates strong reversal to the upside.
Finally, sentiment analysis can also drive price since it is influenced by media which drives people to feel excessive hype/fear of buying/selling. So, best way to benefit from it is to follow the exact opposite of the herd’s sentiment while verifying your analysis with past two approaches (fundamental, technical). Means if fundamental and technical aspects are bullish and the population sentiment is “Fear” then it is the best opportunity to buy into Bitcoin. Do it with confidence.
Thank you for the great article :)
Our psychology tends to believe that we would catch the dip and drop the high, but most likely it will not happen %90 of the time. Therefore, rather than trying to catch the dip, we should act at the point where we think dip is.
We are not fighting with price itself, we are fighting with our mind; if we succeed to beat our feelings, and then act rational. It will give us the position to benefit from Bitcoin, or other cryptocurrencies.
My suggestion is to see every status as an opportunity, imagine yourself investing a fair amount of your income to Bitcoin each month. If its price hits over 500$k in 10 years and if you would be able to fight your mind that long, what would happen? You would eat the fruits of something you had strong belief. Would not it be literally perfect?
Thanks for the Bitcoin article Sylvain!