Bitcoin Crash: The Bull's Demise or Rebirth?

Bitcoin Crash Or Correction: Navigating Troubled Waters

Updated Nov 2023

We will explore this article through a historical lens for two main reasons: those who learn from history are less likely to repeat it, and we will also reveal our real-time positions. Additionally, we will unveil fresh Bitcoin projections for 2023-2024.

The dot-com mania faced a significant correction before soaring to its 1999 peak. Similarly, Bitcoin, despite a notable correction from 2977 (June 10, 2017) to a low of 1808 on July 15, 2017 (a roughly 40% drop, depicted by the green box), rebounded strongly. The image suggests that this correction, in retrospect, appears to be a mere blip, echoing the historical pattern.

Seeking Solace in Shared Suffering, Yet Reaping Meager Rewards in the End

The contrarian mindset takes centre stage in times of apparent gloom, where media narratives echo doomsday scenarios, and even the most bullish investors exhibit signs of wavering confidence. While pure contrarians may boast intelligence above the masses, genuinely astute investors go beyond and embrace the principles of mass psychology.

They meticulously study the collective mindset, understanding that, even amidst encroaching fear, the question remains: “Was the crowd in a state of euphoria when the market peaked?” If the answer is “no,” the seemingly dire situation is likely a set-up for a false downward move. This strategic insight stems from an advanced form of Pavlovian training, revealing that perceived weakness can be an opportunity for those who grasp the nuances of investor psychology and mass behaviour in the intricate dance of market dynamics. The contrarian path becomes not just a divergence from the crowd but a keen understanding of the underlying psychological currents shaping market trends.

The Bitcoin crash appears to have been a scheme from the start, drawing parallels to the Tulip Bubble. Early entrants reaped rewards, while latecomers faced significant losses. A crucial lesson emerges: avoid investments during mass euphoria; consider entering when fear prevails, and conversely. The mantra becomes “buy when there’s blood in the streets.” It underscores the importance of timing, emphasizing the contrarian approach of going against the crowd’s exuberance. In the complex world of investments, success lies in recognizing the psychological undercurrents that shape market behaviour and making strategic decisions that defy the allure of widespread enthusiasm.

Distinguishing from sector-specific collapses, stock market crashes encompass various sectors, signalling an eventual return to normalcy. Through the lens of mass psychology, these crashes transform into long-term buying opportunities. Rather than dwelling on the hypotheticals of a market crash, shift focus to the strategic perspective: envision seizing the chance to acquire coveted stocks at significantly reduced prices. In this scenario, the emphasis goes from fearing the downturn to preparing for a potential market resurgence, reinforcing the adage that within crisis lies opportunity for those with the foresight to see beyond the immediate turmoil.

Pavlovian Type Training Is Being Used On The Masses

When the market rebounds from a backbreaking correction, the crowd adopts a mindset: buy the pullback, viewing it as a trap. The belief emerges that a more substantial pullback signifies a better opportunity. However, this sentiment can be a warning for mass psychology students. The high bullish sentiment at the market top signals an impending skull-crushing correction. The recent Bitcoin boom and crash serve as a vivid example. Bitcoin surged 11,000%, yet even at its peak, the crowd remained exuberant.

Regarding the current state of the Bitcoin crash, waiting is prudent. Bitcoin is unlikely to retest the 20,000 range for a considerable time. On the downside, testing the 3,000 ranges with a possible overshoot to 2,500 seems plausible before a meaningful bottom. Other stocks like PDD, CYBR, PANW, and FCX appear more enticing than Bitcoin. This doesn’t negate Bitcoin’s potential; it suggests waiting for a significant correction, where the stronger the deviation from the norm, the better the investment opportunity.

Bitcoin Crash to Bitcoin Dash: Unveiling the Market Journey

We successfully scaled out of GBTC with a modest gain. Bitcoin is currently in a consolidation/correction phase, and there’s a higher likelihood that it might undergo a test of the 23K range, with a variance of approximately 500 dollars. Market update September 7, 2023

The midterm picture is still unclear. We will wait for it to become clearer before adjusting our entry points. Once it improves, we will contemplate modifying the entry points for GBTC. Market Update October 12, 2023

We observe a contrast between BTC futures and GBTC. Currently, BTC futures are not trading in the highly overbought range on the weekly charts, whereas GBTC is already in the extremely overbought zone. Our strategy is to wait for our indicators on GBTC to pull back to the oversold range on the weekly charts before considering any entry. Meanwhile, BTC itself could experience a surge to 39K -40.8K before rapidly pulling back.

Originally published on Jan 3, 2019, this article has evolved, with the latest update completed in November 2023.

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