Each day Bitcoin creeps closer and closer to breaking its all-time high, by the time this post does go out, Bitcoin could already have broken it, who knows? Momentum to the upside has been pretty strong, and while those who have been here for some time know that the bull run has technically been in effect for ages, to the outside world nothing is going on.
Until Bitcoin breaks and sustains a run above 20k, the average money hungry investor who is chasing stonks, because stonks always go up won’t be interested.
Even though Bitcoin going up in price is not a sure thing, when there is enough of a recency bias towards its been going up for the past few weeks or months, each day it doesn’t correct too violently suckers in a new set of investors who have a vested interest in number go up.
The retail rally
There is for sure smart money coming into Bitcoin and buying up supply either through small, consistent orders as not to move the price or they’re doing it over the counter, and these deals have nothing to do with the trading asset price. The shock in supply from institutions wanting to get mean leaves less liquidity for retail to jump in.
Retail who I mentioned has a vested interest in the price going up, so they’re pretty much price agnostic as long as its more than what they paid for it.
For lack of a better term, this is the dumb money, and sadly someone needs to take that value off their hands, and that normally heads into the wallets of the more seasoned investor.
Granted there will be those with beginners luck, but the vast majority of profit-taking will be done by those who have a few years under their belt.
There are going to be many retail investors that will get suckered in, that don’t understand how the coins work or care about research and buy because of sentiment or the lower unit price.
This is when you know we’re well within bubble territory and it’s time to start thinking of deleveraging. When you see every Tom, Dick and Harry with a hot altcoin pick since “number always go up” you now its time for you to leave those bags to the suckers.
What a difference experience makes
I am by NO means an experienced investor but being around in the previous bull run and seeing what the depths of a bear market is like I’ve learned so much, important lessons such as:
- Don’t keep crypto on exchanges
- Secure your crypto in cold storage
- Researching projects
- Taking out a comfortable position
- Generating cash flow through de-fi, ce-fi and staking coins
- Supplementing your buying with earning crypto
- Daily cost averaging into Bitcoin
- How to use crypto and avoid spending too much on fees
These are just the top lessons I learned, and I think it will help me prepare for this next run. I will need to learn not to be greedy and take profits incrementally all the way up and secure positions for the next bear run.
In fact, my mind isn’t even on the bull run it’s on the bear run, and what I need to secure and projects want to look at after the correction where I can put my profits back into to start generating cash flow for the next bull run.
Life changing profits
There is no doubt in my mind that if you play this next run smarter than you did the last one, well in my case that’s what I am hoping to do and not let greed get the better of me. Then I should be able to take sizable profits that I’ll be able to reinvest since that is my end goal.
I don’t see the reason to cash out, but to ride the wave and recycle the capital into new cash flow/sat flow projects.
The last bull run, the biggest one to date in terms of nominal value helped many not even sophisticated crypto holders make off like bandits and sort themselves out for a few years or even more than that, it is possible, you need to look at setting exit numbers you’re happy with and not try to figure out where the top of the market is and try to wait for that.
The truth is the top of the market never lasts very long and has very little liquidity to back it up, so you want to be taking profits at certain exit levels.
Just as you dollar cost average in, you may want to exit the same way.