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About That HUGE Crypto Dip. My Thoughts…

May 19, 2021

Writing this on the day the crypto market nose-dived. In fact, today, BTC has literally dropped $10K and then increased $10K. All in the same day.

This was one of the bigger dips the market has ever seen. Not gonna lie.

Percentage wise, we've seen bigger. But, this one happened fast. It was like a perfect storm of FUD.

What just happened was abnormal.

But, a bit ago, a reader asked me if I was buying the dip. She emailed in and asked:

I was just wondering whether you are planning to take advantage of the drop in market price of bitcoin and ethereum and buy more? Since I’m brand new to this I thought I’d ask for the feedback from someone much more educated - YOU.

And I have found myself wanting to write my thoughts on Facebook. Which is a stupid place to do it. πŸ˜‰ So, let me just do it here...

Why Did It Dip?

This is what Bitcoin does sometimes. That's the short story. πŸ˜‰

Here's the thing...

  • The market got frothy. The meme coins like Dogecoin is all the proof we needed. It needed to clean itself.
  • There is a lot of market manipulation right now. It was like a perfectly scripted storm designed to scare the crap out of people. It has happened before. Remember, that "institutional money" coming into crypto also owns the media. They created a FUD bomb.
  • Margin trading. People getting greedy and using leverage in their trading magnifies everything. A LOT of people got liquidated during this drop. I have a hard time being sympathetic.

In short, the situation on the ground was ripe for a correction. The market manipulation kicked it and triggered it. And the leverage magnified the effect.

Some think it was all about Elon Musk. No,  it wasn't. He's a chaos agent. And he helped trigger it. But, the makings for this correction were there all along.

Stop paying attention to Elon. He's a clown. A very smart clown, but when it comes to crypto, he's not as smart as he probably thinks. But, he enjoys toying with it.

Was It Just A Dip? Or Something Permanent?

In my opinion, it is a dip. And definitely nothing permanent.

The crypto market has seen massive dips numerous times. The last one of this size was in March 2020 right when the COVID stuff was hittin' the fan.

In the world of dips, though, this one was huge. Like a mega-earthquake.

I still think we've got a lot of upside to this market cycle. I personally believe that BTC is destined to get to a minimum of $100K in this market cycle. When that happens? I have no idea.

It is possible that we have a little bear market here in the middle of the larger market cycle. We won't know until it is in the history books.

Am I Buying The Dip?

I might. 

I've been pulling cash out of crypto every day for the last month or so. Basically, dollar cost averaging the other direction.

I rode the 2018 bear market all the way down. I don't plan to do it again.

Plus, I plan to buy a house. πŸ™‚

And that might be the only reason I don't buy this dip. Because I really am trying to stack dollars for the house. By re-investing it back into crypto, I feel like I'm going the other direction.

But, that's just me. If I wasn't planning to buy a house, I'd be buying this dip like crazy. πŸ™‚

And, I still might. πŸ™‚

I can tell you, I sold nothing.

I've seen these kinds of crashes too many times at this point. Not a freakin' chance in hell I'm going to panic-sell.

And I don't think you should, either.

For Many, This Was The First Major Crash

A lot of people have gotten into crypto for the first time in the last few months. They've never experienced a real market crash. And, they're scared. 

In fact, they make up the majority of the people who panic-sold and helped this crash go so far down. Those who've been in this for awhile were buying the dip - trust me. πŸ™‚

So, while nobody can guarantee what will happen in the future, all I can say here is...

I really, REALLY don't think there's anything to worry about.

I pay attention to a lot of market metrics. I keep my ear to the ground. Fundamentally, nothing has changed. And there are very few indicators that that was the top of the bull market cycle. I really don't think it was. If that was the cycle top, then almost all the usual models and metrics were wrong. And I doubt that's the case.

I recommend doing nothing at all. Or, if you can and feel comfortable, buy the dip.

I'm not selling a damn thing. I fully expect things to recover back into a respectable range that is more realistic for this point in the market cycle. And, then I will resume taking daily profits and stacking for that house. πŸ™‚

It is times like this that will determine whether you will win in crypto.

If you can't stomach the volatility, you shouldn't own it. That means you put more than you can afford in... and that's a bad idea.

You've got to respect the volatility. Respect that crypto does things big. πŸ™‚ In order to get the big increases, it. has to throw you the big crashes, too. Nothing can go one direction. It is the volatility that makes this asset such a good risk/reward ratio.

As for what next...

Truth is, I have no idea. πŸ™‚ Nobody does. It is all about probabilities.

In my opinion, we're going to see a nice bounce back.

In fact, as I said, BTC has already recovered almost $10K and seems to be hovering in the $39K-$40K range.

It crashed to where it was in January. How will we ever live. πŸ˜‰

When in doubt, zoom out.

Go take a walk. Work on your business. Don't pay much attention to the markets unless you have the confidence in the long term.

I do. It doesn't phase me a damn bit.

I don't enjoy watching it crash. Especially when I want to keep taking profits for the next house. So, this is inconvenient. But...

I look at it as a mere delay. And a potential buying opportunity.

I've ridden out too many massive crashes, and taken my original capital out of the market in the good times, to break a sweat over this. πŸ™‚


Think this article could be useful to a friend? 
Please share! I'd really appreciate it. πŸ™


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