Bitcoin crashed, can we learn something from this?
Bitcoin fell aggressively yesterday and, aside from the fact that we have been warning about a possible decline, can we learn anything from this mini-crash? I think so...
1. Overconfidence - Everyone was expecting a new ATH for BTC by the end of the year. So all we had to do was buy at 55k, wait a month, and earn 30% profit. Is it that simple?
2. When things are too obvious is most likely a trap- For 36 hours before the crash, bitcoin stood on very obvious support, like an invitation to buy. And, again, is it that simple? Will Bitcoin stay still on clear and visible support so that everyone can see, buy and make money?
3. Do not anticipate a pattern- a lot of analysts called an H&S pattern in BTC. But for that to have been an H&S, the formation had to be complete first, that is, to have a break above the neck, which did not happen.
4. Overlaverage- A lot of newbie traders have entered into the trade with the firm belief that BTC will not fall below 50-52k area and overexposed the account. And we are going back to No. 1, is it so easy to make money, you take a leveraged trade of 1:10, bitcoin will grow, and you will earn 300% in a month?
P.S: If you also have an idea about a lesson that should be learned from this, please post it in the comment section.
Best of luck!
Mihai Iacob
1. Overconfidence - Everyone was expecting a new ATH for BTC by the end of the year. So all we had to do was buy at 55k, wait a month, and earn 30% profit. Is it that simple?
2. When things are too obvious is most likely a trap- For 36 hours before the crash, bitcoin stood on very obvious support, like an invitation to buy. And, again, is it that simple? Will Bitcoin stay still on clear and visible support so that everyone can see, buy and make money?
3. Do not anticipate a pattern- a lot of analysts called an H&S pattern in BTC. But for that to have been an H&S, the formation had to be complete first, that is, to have a break above the neck, which did not happen.
4. Overlaverage- A lot of newbie traders have entered into the trade with the firm belief that BTC will not fall below 50-52k area and overexposed the account. And we are going back to No. 1, is it so easy to make money, you take a leveraged trade of 1:10, bitcoin will grow, and you will earn 300% in a month?
P.S: If you also have an idea about a lesson that should be learned from this, please post it in the comment section.
Best of luck!
Mihai Iacob
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