BLOODY MARY WRECK TRAINS

WHAT IS GOING ON IN THE MARKET?

Since Bitcoin brushed $69,000 in November, it has seen steady declines with intermittent retests in the fifty-to-fifty-two-thousand-dollar territory, giving swing traders some hearty reassurances on their gains on those bounces. However, in the last week or two, Bitcoin plunged to $41,000 and has been strolling rather sheepishly within the early forty thousand dollars territory. This suggests some kind of a bull trap, but whether it is or not one thing is for sure: a lot of traders have hopped on the Bloody Mary Wreck Train, with their portfolios totally decimated, especially those who longed some alt-coins with hopes of a continuation of the Bull Run.

Of course, there have been exponential gains in the last month with popular metaverse tokens, $SAND and $MANA doing cool 10xs (Tenex?? Yeah pun intended!). Also, NFTs have been doing well, regardless of market conditions with NFT WORLDS ($WRLD) having done almost 10x in the last few weeks – check out our article on NFTS here. Metaverse tokens might well cause disengagement from Bitcoin reliance for market health in the near future.

However, for most alt-coins, it has been blood on the charts and gnashing of teeth. Where are the bulls! The answer to the question is quite simple: they are standing by and watching the market play out.

With the fear and greed index at extreme fear, most big ballers are just playing it chill to see how it turns out. A great recommendation in such market condition is to sit it out and jump back in as soon as Bitcoin, the foremost indicative asset for the health of the crypto market, starts to show some recovery. Again, there are no assurances here! Past scenarios do not expressly predict future occurrences, but they could be good pointers for explaining away probable scenarios. If this is anything to go by, we might see some more downward retests towards the $39,000 territory followed by a bounce-back up to the strong $42,000 resistance level. If this resistance level can be broken into the next $48,000 resistance, it would inject some confidence into the market.

At any rate, the strategy that works 99% of the time is the use of dollar-cost averaging (DCA), wherein percentage amounts are dedicated for buying crypto-assets at specified or desired times. So suppose you have $1,000 to splurge on an asset, if you applied the DCA strategy you would be relatively safe and even have the opportunity to bag more crypto onions in highly volatile conditions. Buying any given asset $50 at a time would allow you to buy the asset 20 times, and certainly, buy it for much less than you would have if you bought it at a go.

Now back to the elephant in the Digi-room, is the Bull Run officially over? Are we now in a bear market? The answer, while not so simple, could well be that we are in a bull break, and in this time Warren Buffet’s aphorism carries more weight:

“Be greedy when others are fearful, and fearful when others are greedy”

Sound financial advice can seem so unsound because of the behavioral dynamics and economics of money. It sure is hard to come by, and so millions, even billions of people are subjected to analysis paralysis or just utter paralysis when it comes to diving into a reddish market.

Anyhow, it would surely be interesting to see how it all plays out.

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