Zoom out, then see the bigger picture.
Weeks come and go and they don’t always look the same in the Bitcoin world. That’s what makes this market so charming. At the beginning of last week, the approaching IPO of Coinbase had created a feeling of slight euphoria in the market.
This allowed Bitcoin to reach a new All-Time High (ATH) close to $65K.
We were in the middle of a “Buy the Rumor, Sell the News” moment. Once Coinbase’s IPO was over, many investors started to come back to earth. The announcement of a ban on Bitcoin and cryptocurrency payments by the Central Bank of the Republic of Turkey put doubt in the minds of some investors.
What if other governments were to make the same decision?
This obviously weighed on the price of Bitcoin, which fell over the weekend to around $61K as the weekend began. And then, on April 18, the price of Bitcoin dropped sharply, losing $8K in a few hours.
Two events can explain this sudden move that has scared off new entrants to the Bitcoin market:
- A power outage in China caused the Bitcoin Hash Rate to drop sharply. While it is not always obvious how the price of Bitcoin correlates with the Hash Rate of the network, it may have played an important role here.
- There are rumors from the United States that U.S. regulators are looking to prosecute unnamed financial institutions for facilitating money laundering through the use of cryptocurrencies.
FUD (Fear, Uncertainty, and Doubt) sentiment once again took over for several hours. Volatility being a feature of Bitcoin, its price followed this fear of some investors.
The price of Bitcoin plunged to around $53K:
As is often the case in such situations, some people started to panic. Others announced that the price of Bitcoin had already reached its peak and that we should therefore expect Bitcoin to enter a Bear Market soon.
For all these people, I think it’s time to go back to basics.
Bitcoin is still in a Bull Market. This correction has seen a quick rebound. As I write this, the price of Bitcoin is already back around $57K, and $60K will likely be tested again during this week.
There are 3 major lessons to be learned from what happened this weekend if you want to make the most of your Bitcoin adventure.
I say this all the time, but too many people can’t seem to put it into practice. It is by controlling your emotions that you can take full advantage of Bitcoin.
And it’s the same with any investment you make in your life.
Make decisions based on your sense of logical reasoning. Don’t let your emotions take over. If you fall into this trap, you will probably sell your BTC at a loss when a 10% drop like the one we experienced this weekend occurs.
When this happens, there is only one thing to do: zoom out.
Step back and see the bigger picture. A year ago, the price of Bitcoin was well below $10K. There’s no reason to panic. Panic is even less of an issue if you take the time to look at the fundamentals of Bitcoin, which remain excellent.
The price of Bitcoin fell this weekend, but yet, on-chain balances continue to fall significantly:
This is just one example of how a majority of investors continue to have confidence in the significant increase that awaits the price of Bitcoin in the coming months.
This correction is nothing more than an epiphenomenon that in no way calls into question what is in store for the market for the rest of 2021.
Bitcoin encourages you to develop your critical thinking skills. Remember its motto:
“Don’t Trust, Verify.”
So when you hear that the Central Bank of the Republic of Turkey is banning Bitcoin and cryptocurrency payments, ask yourself the right questions. Can this really push other governments to follow the same approach?
More importantly, can governments really ban Bitcoin?
If you take the time to think about it seriously, you’ll see that governments won’t be able to do this for at least 5 key reasons that I’ve already detailed in this article: “Fearing Governments Try To Ban Bitcoin in the Future? Here Are 5 Reasons Why It Won’t Happen”.
Second, don’t let rumors like those of sanctions by U.S. regulators on unnamed financial institutions scare you. FUD rumors like this are an integral part of the Bitcoin world. Many use this mechanism to try to cause panic and then profit from it.
Often the same people who start these rumors will buy Bitcoin after these corrections, which then produces a strong rebound in its price. Don’t get trapped. Stay amongst the strong hands.
Since the beginning of the bullish rally in October 2020, many people keep complaining about missing the Bitcoin opportunity. These people were complaining that they missed the Bitcoin at $10K, at $20K, at $50K, …
And then, when the price of Bitcoin drops in a few days from nearly $65K to just $53K, these people wait for a bigger drop to act.
If you are one of these people, you need to get out of this psychological trap that prevents you from taking advantage of the opportunities the market is constantly offering you. Stay focused on the fundamentals of Bitcoin. Then you will realize that it is always time to take action.
If you don’t, you’ll continue to complain that you missed out on Bitcoin at $60K, $80K, …
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Source: https://www.inbitcoinwetrust.net/bitcoin-dropped-8k-in-a-few-hours-last-weekend-3-lessons-you-need-to-learn-6c4084f6ae4d?source=rss——-8—————–cryptocurrency
