December Flash Crash

This article contains our strategy for today and what we were doing last night to prepare. We saw this dip coming and expected ~48k, but do we go lower?

Strategies to Live by

Now if you have been reading along you will recall the constant reminders to try and keep 10-15% of your portfolio in stable coins or cash at the ready. Today is a perfect example of why deploying all your cash might not be the best idea. Yes, you might get some more staking rewards or price exposure in the short term, however you likely will lose out on cost basis. Another strategy we have been preaching time in time again is to never buy your entire position at once on your bigger plays. Dollar-cost-averaging is powerful, especially during these massive crashes. A perfect example of these two strategies combined is for those who bought DOT on Nov 22nd (~43$). I have been buying dot slowly but found discounts at 35, 32, and now 28$, highly reducing my average buy in price. Today DOT is about 50% from its all-time-high, a ripe buy in.

Extended Cycle

In our other media updates, we have been mentioning the potential to visit 48k, 48k is an area that BTC has visited often. While BTC looks gruesome on the daily chart, it looks pretty good on the weekly chart. I believe these wash outs and crashes are what will carry us into an extended bull market. When the market is overheated people are pressured to take profit because they are rich on paper, those who don’t sell don’t “realize” their profits. Therefore, a steady and slower grind upward is a healthier market condition. This price allows large holders to accumulate, it allows manipulators to buy in lower, it allows new retail to achieve a great initial buy in.

Using our two (sometimes three) tools to spot a market top, we do not believe we are there yet. Bear markets traditionally come after an aggressive blowoff top, a rebound and then a slow and endless downturn never recovering. The RSI was not overheated this past week, and old wallets were not selling. Do remember that BTC price action takes much less tokens to move because of the supply shock. It takes less whales or manipulators to affect the price action because there is less circulating supply, less supply provides massive potential volatility. Over leverage also increases the likelihood of these rather sudden downside moves. When the market washes out it reduces the heat of the market and causes a reset, when more people can reduce their cost basis, they are likely to hold and dollar-cost-average over time.

Patrick O’Neil

About Patrick O’Neil


Patrick is an avid technology and gaming enthusiast. Patrick taught himself how to assemble computers in 2010 and was always fascinated with the gaming market. In 2019 he decided to sell his grayscale Ethereum funds and dive into the world of crypto firsthand. 

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