Ethereum and bitcoin have slightly recovered, but it looks like no one believes it. They’ve slightly recovered so many times now, then crashed further down, that some are sure there’s a lot more down to go.
Numbers like $1,000 or $3,000 are being thrown out for bitcoin. For ethereum, it’s going down to $50 some say.
But there comes a point after a stupendous price rise when many expect it to crash, while plenty think it will keep on rising. Eventually it does crash, but when no one knows.
Likewise, there comes a point after a stupendous price fall that eventually many expect it to rise, while plenty are sure it will keep on falling. Eventually it does rise you’d think, but when no one knows.
Now the cruelest joke here is what the naive moonkid might do. You know, the one that’s never traded in his life.
When he bought it doesn’t matter, but he probably thought throughout the price fall that a bull run was imminent following the slightest of bounces.
When instead he kept being offered another crash, eventually he burns out and learns to think that this will never rise.
Our naive flower now thinks that any price rise is an opportunity to short, for that’s how it has been so far and perhaps that’s all he knows since perhaps he barely tasted the bull market.
So after any rise he might short, and of course he will make a bit of money. But now he becomes so confident that he begins shorting with all he has.
There might come a time when he is almost about to be called and lose it all, but bears perhaps just about save him. Now convinced, he dreams of the price falling another 50% or even 90%. Down to perhaps $50, $10, or even zero.
Like an addict on cocain, he wants that thrill once more of fast price crashes, loads of new paper money, with his body probably experiencing the excitement of driving at stupendously crazy speed.
But he’s had too much to party, too much fun, and the music is far too loud. At some point it is time for the yang, yet he’ll never believe it.
A bounce can only crash once more. When instead it keeps on bouncing, it will crash anytime now. When in fact it doesn’t crash he might eventually even become a bull just before it is about to crash.
Then, they cycle reverse. It will go up any time now…
This emotional reaction is noticeable even in experienced traders, but it is most cruel in newer ones. Our punishment and reward pavlovian system is trained to take the past as indication of the future.
Thus if we think it will fall, but instead it keeps on rising, eventually we give in, especially if one is actually acting on it and gets punished by getting their longs called.
Likewise, if we think it will rise, but it actually keeps on falling, eventually we start thinking it will always fall. So when instead it rises, easy peasy says he is cool as a cuecomber because he is sure it will fall again to 324.
When instead it doubles to $600, he insists it will crash anytime now. When it doesn’t at $1,200, eventually it does.
At which point he was meant to turn bull, but the meme perhaps trapped him or saved him. Or, far more correctly, once one goes through these cycles one perhaps learns eventually that what once was isn’t necessarily what will be.
That may well include all of the above, but you’d think eventually bears will give way. When? Now on that we have nothing to say.