For the most part, CT sentiment is down the dumps.
I can't scroll past a few posts without getting hit with this implicit message that summer has passed for crypto land and with that, the easy gains are gone too.
Sentiment analysis is tricky to discern for me as I think it's a blend of signal and noise, but I do read or rather skim through much of these "summer has passed" type of posts.
Some of them have this underlying theme of 1) crypto is generally overpriced compared to tradfi markets like stocks and bonds, which are holding steady or climbing on steady interest rate vibes 2) as a by-product of existing in a realm which fosters speculation and hype, short-term thinking is prevalent, the giant bubble of a get-rich-quick scheme has popped, almost everything is trending to zero, so pivot out of crypto or at least keep one foot over there at the exit door.
There are other flavor variations of these two such as alts being dead weight dragging BTC down, how retail FOMO has turned to regret selling via panic dumping and liquidation cascades.
With the fear and greed index being this low, it was at 22 last time I checked, I'm tempted to think along the lines of cloudy emotional reasoning based on the mismatch between expectations and reality.
The fabled Q4 has so far been an epic letdown.
Some have extended the timeline into next year, the liquidity cycle guys/gals may have a point when they say we're in the contraction phase after mid-year money printing slowed.
It looks hopeful to consider BTC will eventually bridge the gap between this M2 money supply they macro folks talk about and former's current undervalued spot relative to fiat printing.
When that will be is anyone's guess. There are a bit more variables at play now, and the fragility of the global economy is becoming all too present.
On this angle, I can understand intuitively the concept of liquidity cycle similar to an organism expanding and contracting via breathing in and out.
The problem is the oxygen is not freely given or near evenly distributed, institutions and whales get the first breaths and retail chases scraps.
When the economic organism breathes in again, it may well leave a lot of us gasping for air (joke... mostly).
Others are persistent in their thinking that it's so over for altcoins especially, maybe even this entire cycle.
Combination between too many bagholders from previous cycles waiting to break even, and no marginal buyer left to step in at these prices, I guess contributes to the heavy overhead resistance we're seeing across the board.
Longer view?
I'm thinking of something a bit more detached from the myriad of conflicting views that it could always go either way. Let the economy and markets by extension go which direction they want. People will find a way to survive, adapt and thrive. Nothing is new under the sun.
But then the accumulation of something unprecedented in the atmosphere is becoming harder to dismiss. Definitely not a good idea to turn a ostrich on this and pretend 2017-2021 dynamics will simply repeat on schedule.
I guess what I'm trying to wrap up with is cycle looks genuinely different.
The marginal buyer thesis has merit when it's considered retail got burned badly, institutions are selective rather than indiscriminate, and macro headwinds seem fiercer than previous cycles.
I'm not capitulating entirely, trimming exposure and focusing only on highest-conviction positions with accumulation mode for dry powder. If the liquidity cycle thesis plays out and we get another expansion phase, great, have some capital to deploy.
If not, I'd rather preserve what gains remain than ride everything down hoping for a miracle Q1/Q2 rally that may never materialize.
CT pessimism might be overdone, but arguably so was the Q4 optimism. Truth is probably somewhere in the uncomfortable middle.
Thanks for reading!! Share your thoughts below on the comments.
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I'm a fan of bear markets. I just started a savings plan on BTC, doing some averaging over around a year and then see what happens. Most if my investments have been in real-life lately, building out the bakery. As soon as that is done, I'll focus on the markets a little more again. But I still don't see that we're close to a real bear market. But who knows, maybe we'll get lucky and some real buying opportunities arise.
Am doing the same on BTC,actually grabbing some SATS off the market in few minutes.
I hope the market dips more for the opportunity to add to my bag.
Right. I think not much can go wrong with BTC, been buying more SATS as of late, looks very cheap lol and I too hope the market dips a bit more :)
Hodlers and long termers always want more dip 😀
May it go south bro!
Yes, fingers crossed and be ready lol.
Fingers crossed that it works out for you!
Exactly, I think when much of the fluff is ignored, these are great moments to build wealth for the long term. It's just that the perceived fear of loss in the short term tends to outweigh the potential gains in the mid to long term.
Great focusing also on real-life investments, I'll have to do much of that in not so distant future as the digital space is not real enough for my practical self.
Thanks for stopping by :)
Diversification is incredibly important. So far I have: The bakery as business, high yielding CDs in two different banks (different safety level), a friend's construction business, stocks, now a little bit of crypto (only 2% of my holdings for now) and now the part of the bakery that I rent out to a restaurant and a café.
If one fails, there are still the others.
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CT always exaggerates in both directions the sentiment of the market. Maybe some use it to plan contrarian market moves, when masses become either too fearful or overconfident. That doesn't mean we shouldn't protect our gains in a downturn, when we can.
Right, I think good digital space to visit when planning contrarian market moves, as surely the both sentiments are usually amplified by the algorithm that one can easily mistaken perceived market reality for actual reality.
Thanks for stopping by :)