How many gurus steered you the wrong way with the typical hype and false sense of hope near those highs? I watched countless videos on Youtube that were so feverishly , that it was very hard to ignore the painfully obvious contrarian signs. The herd mentality at its finest. No one emphasizes the risk, maybe because they aren't aware of the magnitude or maybe they know they won't get as many views if they speak of the R word: reality.
Next you may wonder, "is this the time to buy more?", "buy the pullback?", it's still a bull market right? All that really positive news, right? Here is the answer: while the location (between 51 and 55K) is much more attractive, it is still too early for swing trades at least.
There is now a failed high formation established off the low 60K area off of a high probability reversal zone (blue ). The pullback is sharp , and while the location has improved, I would not get involved until stability appears. Meaning price can test 50K again, or even slightly lower over the coming days. Or maybe it establishes a higher low, either way I want to see a formation develop. The outcome from buying a level alone is HIGHLY random and that is not something I am interested in. Stability takes time, and a single candle is not enough to work with. Either Bitcoin aligns with my rules, or I don't assume any risk. Very simple.
This type of move is good for day trades (you need to stay on top of it) or position trades (investment). Since the retrace is dramatic, it offers an improved price to take a SMALL bite, relative to your allocation objective. Meaning if you have 1K to invest, this is an opportunity to buy $50 to $100 worth or 5 to 10% of whatever your full amount is.
Why such a small allocation? Because at this point, IF momentum stays intact, it is possible to see a test of the 50 to 48K area.
Many of the "experts" will probably turn on Bitcoin now, but it is still too early for that also. Until major supports are taken out, like 48K and 40K, the broader structure is still . That means it still makes sense to look for swing trade longs at support levels upon a setup and confirmation.
In these situations it is easy to let emotions take control, especially if you were lured by the hype. If you are too big, the best thing to do is reduce risk while you have the opportunity. The smaller the loss you can take the better. It will be frustrating if Bitcoin reverses back to 60K, but the idea is to not be at the mercy of the market which is often the long term result of hope. Focus on risk FIRST.
Thank you for considering my analysis and perspective. I hope you find it helpful.
The wisest thing is to have the genius to see what others don't see - such as having the vision in 2009 to see that this is a multi-trillion dollar asset class and buy and hold forever. The same can be said for any Warren Buffett / Charlie Munger fundamental value kind of person who can value a company and see the value that others don't see and buy and hold at significant discount to fair value.
There are many who have HEDLed .... HODLing through volatility is superior to timing tops and bottoms - a tool for true idiots who will eventually risk getting in demonstrably wrong one day. There are many traders who sold $20k top and were waiting to buy a $1k bottom in 2018/2019 - which never came and many of them to this day are still waiting and never bought back. The beauty of buying and HODLing is that you accrue and compound returns as a stock/reserve asset that only appreciates in price over the grand scale of time. Of course, my argument is one to be made if you have time - if you're 90 years old, obviously they are a different set of circumstances.