How to manage Bull season psychology in crypto? Section 1

We all have a journey to Bitcoin. Some started as sound money advocates who adored Austrian economics and gold. Others fell out of the TradFi world when they knew something wasn’t quite right. Most Bitcoiners have gone through trials and tribulations of altcoin hell. However you made it here and to Bitcoin, welcome–and buckle the F*ck up.
When I first became interested in Bitcoin, it was July of 2017, and it was already well into the bull market of that year. I bought some and watched its value increase. Then I bought more. As tends to happen during these parabolic bull runs, I kept watching the price rise and my interest go from:

Interested to Disbelief to Infatuation to Degenerate Buying to Despair.
This is a trajectory you can avoid during the next bull run if you prepare yourself properly.
If you are reading this hoping to find all the answers, I have some unfortunate news. There are no right answers in Bitcoin or life. We are all on a journey to figure out what to do and how to approach. I hope to guide you, but ultimately, your personal goals and disposition will dictate how you handle volatility. Bitcoin will test your resolve.

During the later phase of the 2017 bull run, I talked about Bitcoin to everyone in my life—completely obsessed. My neighbor at the time was older than me and had experienced the dot-com boom. I will never forget the advice he gave me; this advice was born of gaining (and losing) a lot of money during the dot-com bubble. He listened to my fervent interest in Bitcoin, and he took a very measured approach to my evident LOVE for this asset. He told me that during the dot-com boom, he made more money than he ever believed he would have, and in the end, he was right back where he began—because he rode the bull market over the top and didn’t sell anything. His advice was, “I’m glad you are doing well, but don’t forget to take some profit.” He advised me to sell 50% and keep 50%—a simple hedging strategy. I did heed his advice shortly after Bitcoin hit its all-time high and sold some of my holdings near that local top.
Now, I know that this is sacrilege to many hodlers. We don’t sell our bitcoin, right?? Well, that is a personal decision, and depending on your risk tolerance and place in life, you may want to take some risk off the table. That is part of investing, and as the old saying goes, no one ever loses money selling for a profit. This article aims to give the advice I wish I had gotten when I first discovered Bitcoin. I hope this helps newcomers to the space understand how to navigate the bombastic environment that bitcoin produces during its bull runs.
I have seen two bull runs, one in 2017 and one in 2021. These bull runs were VERY different, and I suspect that if you spoke to those involved in bull runs prior to 2017, you would find that those also had a very different feel.
The first thing I want to get off my chest is this—No one knows what is going to happen:

• Balaji talks about 1 million in 3 months
• Nobel laureates are saying it will go to zero
• Buffett and Munger(RIP) call it rat poison

Whoever you are listening to, no matter how long they have been in the space or how correct they have been in the past, IT DOES NOT MATTER. They have no idea what the future holds.

In investing, there is an idea called survivorship bias. Those who have been correct have survived, and they seem like geniuses because they have been correct. The VAST majority of those who have been wrong are forgotten. You don’t hear about them. I won’t throw anyone under the bus here, but there were prominent people in Bitcoin calling for MUCH higher prices when we were sitting at 68K in 2021. I’m not saying that they are bad people; I’m sure that they had a good reason to forecast these numbers, but if you had taken their advice at that time, you would have bought at the worst time possible and gotten crushed for YEARS.

In my view, there are different tiers of crystal ball holders out there, and the lowest tier is the technical analyst type. These are the dime-a-dozen people you see on Twitter spouting off about momentum, price levels, cup and handles, etc. These people were calling for 10K bitcoin when it bottomed at 16k. I’m not saying that TA is all nonsense; fundamentally, it is a system for predicting human action through probability. It’s a consideration at best. It should never be used in a vacuum to determine your allocations. If you use it in conjunction with fundamentals, it can be much more helpful. The point I am driving at here is there are GRAVEYARDS of TA analysts out there who told you to buy at 68K and not to buy at 16K. They are throwing probabilistic darts. Don’t put your financial future on someone’s educated guess.
The second brand of crystal ball aficionados out there are macro analysts. These people have more credibility in my view because they are assessing the general trend in the economy. They are considering interest rates, Fed movements, and economic data. These types are MUCH closer to base reality because they have their finger on the pulse of the economic heartbeat. But, as with TA analysts, these people can be TOTALLY wrong. Many said that Fed funds rates couldn’t exceed x or y, or the entire economy would collapse. Well, the interest rates have been elevated to levels well above their doomsday predictions, and we have not seen a collapse.

Whether you follow a TA analyst or a Macro analyst, they can be utterly WRONG because of a black swan. Nicholas Taleb—famously hated by Bitcoiners—coined the phrase black swan to label events that happen from time to time that simply cannot be predicted in standard modeling because they are so unlikely. Covid was a black swan. The war in Ukraine was a black swan. And guess what, there could be another unpredictable black swan tomorrow that could render all of the TA and macro analysts completely wrong. The world has a ton of randomness. By the way, black swans aren’t always bad. They are just as likely to be positive catalysts.
So does this mean we should remain paralyzed with fear and not trust anyone??

Absolutely not. It means we should make the effort to EDUCATE OURSELVES! You need to take responsibility for yourself and your decisions. You can take the information from the TA analysts and the macro analyst and make your own educated decisions. THIS IS OF THE UTMOST IMPORTANCE.
This is a guest post by Josh. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Josh is a career firefighter/paramedic who has been interested in finance and economics for over a decade. He discovered the value of Bitcoin in 2017 and has become more resolved in its world-changing capabilities every year since. Josh is the co-host of the Blue Collar Bitcoin Podcast alongside fellow firefighter Dan.
https://bitcoinmagazine.com/culture/surviving-the-bull-run