It’s that time of the cycle again, where Bitcoin captures the imagination of the general public; after a long 3-year slumber and crab market, 2024 was the comeback year, and we’re up BIGLY!
163.0% gains, and we’re still going strong, is like a bat signal to every Bitcoin tourist opening up a Coinbase or Binance account with a few thousand dollars and a dream.
For those who started to pay attention early in 2024, their success stories have made their way through their friendship circle and social media, providing the perfect marketing funnel to attract unsophisticated hopefuls looking to strike a fortune.
You can’t lose right now, right?
It’s only always going up; it’s been doing it for the whole of 2024, and yes, directionally, that is correct, but Bitcoin, like every other asset, doesn’t go up in a straight line.
Like the stairs in the Diddy mansion, the stairway to $100k and beyond can be covered with baby oil and cause several party-goers to slip and fall and lose their shirts.
Why Your Bitcoin Portfolio Looks Like a Roller Coaster (Even in a Bull Market)
When you’re playing in a market where the asset can double in price in a single year, you will have to accept crazy levels of volatility; that’s the trade-off, and the test is if you can weather these storms and hold on to your coins.
Ever wondered why Bitcoin can drop 30% right after your cousin Tony finally decided to invest his life savings?
Welcome to the wild world of bull market corrections, where your portfolio graph looks suspiciously like your heart rate during a horror movie marathon.
The Bitcoin Bull Market: A Love Story with Trust Issues
Bitcoin is like that erratic friend or girlfriend doing great in life – a new job, nice car, great relationship – but still manages to have random meltdowns every few weeks.
You know, the one who posts “Living my best life! 🚀” on Monday and “Everything is meaningless 😔 by Wednesday.
That’s Bitcoin in a bull market.
#Bitcoin – no major pullback until the next peak pic.twitter.com/4ElEKBeMmG
— Mags (@thescalpingpro) November 22, 2024
The 5% Dip: The Daily Drama
A 5% drop in Bitcoin is basically the crypto equivalent of a minor social media controversy.
It’s enough to make newcomers panic-tweet “IS THIS THE END?” while veterans barely look up from their coffee.
It’s like when your favourite coffee shop raises prices by 50 cents – momentarily irritating but not exactly a life-changing event.
These mini-dips usually happen because:
- Some whale decided their yacht needed a friend
- A minor celebrity tweeted something vaguely crypto-related
- Mercury is in retrograde (at least that’s what Crypto Twitter will tell you)
- Someone’s hamster accidentally hit the “sell” button (it happens more often than you’d think)
The 10% Correction: The Plot Thickens
Now, we’re entering what I like to call the “Maybe I Should Call My Mom” territory.
A 10% drop is like showing up to a party and realizing you’re the only one who dressed up for the theme. It’s uncomfortable, but you’ll probably laugh about it later.
These medium-sized dips often occur because:
- A regulatory body somewhere coughed in Bitcoin’s general direction
- A major exchange’s CEO tweeted something mysterious like “👀”
- Someone found their old hard drive with 100 BTC and decided to have a garage sale
- Three influencers coordinated their bathroom breaks, and all sold at once
The Dreaded 30% Plunge: The Full Bitcoin Experienceâ„¢
Ah, the 30% drawdown – or as seasoned traders call it, “Tuesday.” This is when Bitcoin decides to test if you really meant all those “In it for the tech” tweets.
It’s the crypto market’s version of asking “Do these jeans make me look fat?” – there is no correct answer, only pain.
These massive corrections happen for reasons such as:
- The market remembered gravity exists
- Too much leverage built up at a particular range and begins to unwind
- Futures contracts expire
- Tax season for traders
- Rebalancing of portfolios
- Someone sneezed wrong in a trading office in Singapore, triggering a fat finger sell-off
- Some major Ponzi scheme or scams blows up and FUD’s the market
- A butterfly flapped its wings in Brazil (chaos theory is real in crypto)
- Your friend who’s never invested in anything finally bought in at the top and needs to learn the value of being underwater on their trade.
Why These Dips Are Actually Good For Us (No, Really!)
Think of these corrections as Bitcoin’s version of a cleanse. It’s getting rid of the weak hands faster than a poker tournament after midnight. It’s nature’s way of reminding us that nothing goes up in a straight line, except maybe your blood pressure during these dips.
That’s when HODLers need to be ready with some dry powder to catch the falling knife; as you prudent stackers set your limit orders and provide some much-needed liquidity, you’ll be rewarded with cheap sats from these unwindings.
The Psychology Behind the Madness
During a bull market, Bitcoin traders go through the five stages of grief backwards and forward so many times they should get frequent emotional miles.
Here’s what happens in their heads:
- “This is fine, totally normal.” (Down 5%)
- “I am a genius for buying this dip!” (Down 10%)
- “I should have sold everything yesterday.” (Down 20%)
- “I’ll never financially recover from this.” (Down 30%)
- “Oh look, we’re hitting all-time highs again!” (Next week)
The Silver Lining (or: Why We Keep Coming Back for More)
The beauty of Bitcoin bull market corrections is that they teach us valuable lessons, such as:
- How to turn your phone upside down to make the red candles look green
- The true meaning of the phrase “Money isn’t everything.”
- That your partner was right about diversifying into “real investments.”
- That you mistook brains for a bull market
- You’re not a professional trader, and you should stick to your day job
- The importance of having a good therapist on speed dial
Embracing the Chaos and DFTU
The truth about Bitcoin bull markets is that they’re like watching a toddler learn to walk. There will be falls, tears, and occasionally moments of pure joy when everything works perfectly. And just like proud parents, we keep watching, cheering, and picking our portfolio back up every time it faceplants.
A free and open market like Bitcoin tends to take the stairs up and an unreliable elevator down, even in banana zone territory; you never know its next move.
If this is your first cycle, Remember, this is normal; if you’re not occasionally questioning all your life choices during a Bitcoin bull run, are you even really investing?
The real key to success during this phase is to be happy with your allocation; you did the best you could, embraced the volatility, learned to laugh at the dips, and maybe, just maybe, kept some fiat on the side for those moments when Bitcoin decides to go on an unexpected discount sale.
And if all else fails, there’s always the tried-and-true strategy of deleting your trading apps and pretending your Bitcoin wallet doesn’t exist until the next all-time high.
It works 60% of the time, every time.
