Should you be buying or selling?

Bitcoin and Cryptocurrency markets are at an all time high, the US dollars printing machine is going brrrrrr, and the economy is on the brink of disaster.

Buy and Hodl is more like, buy and hope!

During these uncertain times I wouldn’t encourage anyone to buy hand-over-fist. Likewise, I wouldn’t suggest they sell out of their core positions.

The smartest move right now for most investors is to accumulate on all dips. I’m personally adding to each of my core positions, on every leg down. There is one caveat to this method. The rule of adding on the way down only applies to SOLID crypto projects. These are projects that are heavily researched, and bought with 100% conviction.

Accumulate right now, are you mad?

everything is topped out right now, why would I add more?

Remember, in the wild wild west of cryptocurrency nothing is as it seems. We’re dealing with an asset that is barely understood by even the experts. This means crypto cannot currently be analyzed in a meaningful way. Unlike stocks, a coin’s price is solely based on speculation and hope, so things such as charting and price prediction are of very little value. This also makes a coin’s so-called bottom elusive, and since the bottom is unknowable, one can’t assume to know when to buy. By adding on each leg down, you’re giving yourself a chance to buy the actual bottom. It also allows you to develop your position, while building true conviction in your purchase.

“But how do I know the right time to add to my position”?

Is it too early to accumulate you may ask? First of all, this thought of “too early” asserts that you know the present, but requires you know the future. Since the future is un-knowable, my answer to your question would be — It’s never too early, or too late, to accumulate coins of a good project! When you invest, you have to invest in the project, the value of the project and the conviction of future performance. Never invest in the price!

“So are we at a top”?

As previously discussed, the term “top” is completely relative and can’t be known. With that being said, in the short term one scenario we could see play out is a gradual drifting down. So far, shorts are not being encouraged to cover, nor longs to buy. A gradual decline, if it happens, could typically retrace between 10–30% from the top, which would put $BTC around $27K. In my opinion this would only occur if we were to get more head winds, such as Janet Yellen’s Bitcoin rant.

What about specific coins?

The majority of altcoins have already completed a significant phase from bottom to top. Some of them have broken to new highs, while most look to be headed that way. Weekly charts show the completion of what I call the commodity phase, although coins such as $BTC, $ETH, and $LINK appear to have no clear signals in place.

“Greed is good” — Gordon Gekko

Back in 2017, we saw traders from all walks of life FOMOing into everything under the sun, mostly because they were afraid to miss the move. Shortly after we saw many of them jumping off a cliff, and they couldn’t get out fast enough.

This time around things are much different. Any weak-handed selling is immediately bought up by larger players who are loaded with capital. In part, this has kept Bitcoin from breaking down through current support levels, with any conviction. At the same time, buying the downside on market order has been stronger than ever. I’ve noticed that this contra trend buying had pushed positive flow to a 1 month high. Surreptitious buying is corroborated by net flow of the neutral tick, which declines as selling hits a firm bid underneath.

It should be emphasized that price in these markets can be easily swayed by superficial sentiment, held by the mass of traders who dominate the action. Even more so, this sentiment affects the price at the margin and induces the non-convicted public to move in its direction. Because of what I call, “the lemming effect”, market price can sometimes decline even while stronger buying outweighs weaker selling. But to those who have conviction about the prospects under what they’re buying, the downside price bias provides opportunity. This is why you accumulate!

Where is the market currently at?

Where does this leave the market at present? The bigger players are waiting for the other shoe to drop, so at the moment they’re not playing. Smart money is waiting patiently for any superficial bad news that the worldwide myth makers can roll into end-of-times. This in turn will induce the game players to sell into their own booked orders underneath, and to trick the public amateur traders to try to beat the market by selling short or selling out completely. Problem with that approach is there is still too much positivity.

Case in point why you can’t play their games. The pro’s will have you for lunch. Therefore you do well not to focus on short term price movement. Keep your eyes fixed on project fundamentals, while propping up your core positions.

In the end cryptocurrency will thrive!

In the end, whether the markets move up or down you must drown out the noise, there’s lots of it! Hold on tight to the coins you believe in, and use these buying opportunities to own more of them.

I think Gordon Gekko said it best, “The new law of evolution in corporate America seems to be ‘survival of the unfittest’….. Through wars, depressions, inflations and deterioration of paper money, trees have always kept their value. Forests are perishable, forest rights are as important as human rights to this planet, and all the illusory Maginot lines, scorched earth tactics, proxy fights, poison pills, etc….. the bottom line, ladies and gentlemen, as you very well know, is the only way to stay strong is to create value, that’s why you buy stock, to have it go up. If there’s any other reason, I’ve never heard it.”

Should you be buying or selling? was originally published in A Technologists POV on Medium, where people are continuing the conversation by highlighting and responding to this story.