Almost every trader will tell you not to buy the top or chase a rally. There is a lot of truth to that.
But make no mistake. There is nothing wrong with buying a breakout to new all time highs. The asset goes into price discovery and this is the time when you want to ride the bull market. There are likely funds that are cautious and just now starting to enter.
Remember in 2016 when we broke out to new highs above $1300? Bitcoin was already in a long term bull over several years and it took about 5 weeks from the recent pullback to break out. What if you bought at $1400? Would you have "bought the top?" -- look what happened next.
1. We went up for 6 weeks forming a short term top at $3000, over 230% from breakout price.
2. We never got a weekly pullback to buy the breakout lower
3. Bitcoin eventually went to $20k in a relentless march that took 8 months past the breakout.
4. Even "buying the top" at $1300 you would have went 15X if you sold all time highs (not easy).
Of course its possible that bitcoin can go lower. Here is how you can approach it.
1.Buy non-leveraged
2. Buy based on time not price. Slowly make a buys once a week so you don't spook yourself if we get a sudden sharp pullback.
3. To manage risk, you can move to cash if we get a weekly close under $19500. That would suggest a false breakout.
4. Price in coming weeks doesn't matter. You are targeting price in 6-24 months from now.
If we do drop back below previous highs and get daily closes, you can still go cash. You would take a small loss but calculate what that would be today and make sure you only risk what you can afford to loose. You might risk a 15% loss but your upside is at least 50% to 400% in the next year.
This is a strong breakout so far with volume. We are in price discovery and that is when you can make the most money in a bull market. As long as we continue to hold in coming weeks, it is much more likely we go higher than dump back below the 3 year range.
Scott Minard at Gugenheim is targeting a Bitcoin price in $400,000. Big hedge funds are just now getting in. You are still early.
Not financial advise, but just an example of the perspective you can take if you feel like you missed it.
But make no mistake. There is nothing wrong with buying a breakout to new all time highs. The asset goes into price discovery and this is the time when you want to ride the bull market. There are likely funds that are cautious and just now starting to enter.
Remember in 2016 when we broke out to new highs above $1300? Bitcoin was already in a long term bull over several years and it took about 5 weeks from the recent pullback to break out. What if you bought at $1400? Would you have "bought the top?" -- look what happened next.
1. We went up for 6 weeks forming a short term top at $3000, over 230% from breakout price.
2. We never got a weekly pullback to buy the breakout lower
3. Bitcoin eventually went to $20k in a relentless march that took 8 months past the breakout.
4. Even "buying the top" at $1300 you would have went 15X if you sold all time highs (not easy).
Of course its possible that bitcoin can go lower. Here is how you can approach it.
1.Buy non-leveraged
2. Buy based on time not price. Slowly make a buys once a week so you don't spook yourself if we get a sudden sharp pullback.
3. To manage risk, you can move to cash if we get a weekly close under $19500. That would suggest a false breakout.
4. Price in coming weeks doesn't matter. You are targeting price in 6-24 months from now.
If we do drop back below previous highs and get daily closes, you can still go cash. You would take a small loss but calculate what that would be today and make sure you only risk what you can afford to loose. You might risk a 15% loss but your upside is at least 50% to 400% in the next year.
This is a strong breakout so far with volume. We are in price discovery and that is when you can make the most money in a bull market. As long as we continue to hold in coming weeks, it is much more likely we go higher than dump back below the 3 year range.
Scott Minard at Gugenheim is targeting a Bitcoin price in $400,000. Big hedge funds are just now getting in. You are still early.
Not financial advise, but just an example of the perspective you can take if you feel like you missed it.
This is getting overextended so I will take some profit here and enjoy it. I will just put that cash into my reserves and hold it for another opportunity. Possibly reinvest in Bitcoin after it has pullback (which could easily be higher than current price).