Take a look at the following image below.
If you've ever watched charts--especially Bitcoin over the past few years--the red line should look very familiar to you.
The red line and all the words in this image represent a market cycle and the emotions that dictate how that cycle progresses.
Let's first look at Bitcoin.
Recently, a distant relative of mine posted on Facebook about how they had sold all their Bitcoin when it peaked recently, because they believed they had an opportunity to get out while the markets were up.
This bearish sentiment is music to my ears, because it is exactly what people say when they get caught in a market bear trap.
You might also hear someone say, "I'm never going to buy that again" or "I'm never going to buy stocks again" or "the market hasn't finished correcting." You know, stuff that people say who have been burned in a previous cycle. they aren't thinking; instead they are feeling the market, and they are afraid of being hurt again.
Sad fact, but markets are there to take advantage of uncontrolled emotions, and not the other way around. And, a bear trap is a classic example of recency bias - a mindset that gives more weight and importance to recent events to determine what happens next. Given some thought, it's obvious that recency bias is flawed and irrational. But we all do it anyway.
So keeping the above chart in mind, and especially the left side of the image below the words "Institutional Investors," we can now look at Bitcoin's chart and see where we are at:
Next we have Gold, which has not progressed as quickly as Bitcoin, but the chart patterns are similar enough.
Lastly we have my favorite, Silver:
While this seems like easy peasy technical analysis that anyone can pull out of their wazoo, the only thing that really matters is whether you have skin in the game. I do, maybe not as much as some, but I trust the technicals and the historical behavior of people enough that I can be confident in my opinion on where the prices of hard assets and Bitcoin are headed, because if Gold, Silver, Bitcoin don't follow through on the technicals, then I believe there are much bigger problems at play.
Please also remember that this post is my opinion, I do not have control over the markets, nor am I psychic. If you were to put a gun to my head, I would say to exit the F$%^&ng stock market like you're fleeing from the plague, get to safety, sit back and wait. But again, I could be completely wrong and seeing something that isn't there. You be the judge, I'm only one person with my own biases.
Thank you for reading. Please stay safe and keep your head up.
