A Fundamental Dynamic That Tends To Govern Every Bull Market
In The Rear-View Mirror
The pain and torment of 2022 is by now a distant memory. Even if you were a casualty or collateral damage of the previous bear market, you might have readjusted your sites. Bear markets are brutal and have a way of deceiving investors into thinking that the market will never turn. When you peruse some of the more prominent X accounts, you will understand what I am suggesting.
To be calling for a $12K Bitcoin at this stage of the game is not only unrealistic, it’s delusional. Yes, a swan event could always strike. However, outside of such an event, it’s almost impossible. An experienced trader will always choose to rely on confluence. Quite simply, there is no confluence to back such an outlandish price prediction especially, at this stage of the game.
Similarly, many were unable to shift bearish in 2022. They interpreted every dump as an opportunity, whereas in reality, dumps were part of a larger, cascading downward spiral. The market has a way of communicating its true intention, and watching out for the following dynamic can aid in discerning the overall sentiment and trajectory of the market.
Overruled
In an aggressively bullish market, bearish signals are often negated. In other words, bearish patterns and signals will often fail. The moment you begin to see this dynamic unfolding, you can be sure that the market is overly bullish. As a result, betting against the market now becomes incredibly risky, even with the assistance of technical analysis.
The same dynamic is at work in a bear market. Bullish moves, patterns, and signals fail. There may well be an initial move. However, it’s often short-lived and usually fails. Simultaneously, this doesn’t suggest that there are no corrections in a bull market. On the contrary, historically, there are pretty significant corrections. However, what it does imply is an extremely unpredictable market.
This is why I tend to take on more of a HODL approach in a bull market. I don’t look to take profits. I build positions with long-term time horizons. I do however tend to set aside an allocation for trading. I realize profits with these accounts. However, long-term holdings remain untouched. This approach can be revisited, but only under stringent circumstances.
Final Thoughts
Bitcoin has a way of exceeding even the most bullish predictions, at times. It becomes highly unpredictable and can surprise both sides of the market. It’s important to bear this in mind. Especially, as we move deeper into the bull market. Crazy things can happen at any moment! See you next time!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
