Bitcoin in the sand again

Bitcoin is once again teaching people why it is a better type of investment than regular stock indices. I say this because it has risen a lot these days? No. Well, yes in part, but not only for that.

Bitcoin is doing what it does best: baffling the inexperienced and novice

When we were already getting fed up, in this 2023, of listening and reading that pseudo-experts said that Bitcoin would continue to fall, and that the collapse was the most certain thing; Something unexpected happened: American banks were the ones that began to collapse and the major Stock Indices were the ones that started to stumble and go down.

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Well, it is necessary to clarify here, it was not all the North American banks that collapsed, but some of the most important in the country did. And it cannot be ruled out that more US banks continue to collapse, since some news reports that more than 186 US banks are in imminent risk of collapsing (If you want to go deeper into that news, this is the source> More than 186 US banks well-positioned for collapse, SVB analysis reveals).

Now when I say that this was unexpected, I mean it in quotes; because it's been an open secret, for years, that the US (and world) banking system is at serious risk of collapse for many different reasons. The fact is that when I say that this was an unexpected event, it was because in the midst of the great bearish run that Bitcoin has experienced in 2023 (and that has dragged on since 2022); almost everyone expected that the price of Bitcoin would continue to fall in one way one another; or at least, many thought that its upward progression would be slower.

And that is when Bitcoin has baffled almost everyone, but especially inexperienced and newbies, rising significantly in price in a short time.

Bitcoin above $27k

This is how we have at the moment, that the price of Bitcoin is above $27k (in fact, it is specifically at $27,098 as I write this post). And in this new scenario, which was initially disconcerting to the new and inexperienced, now everyone seems to be bullish again.

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Many traders are making a profit again thanks to this Bitcoin price rise, but it is clear that one must be careful in this situation. Because it is evident that Bitcoin must continue to rise in 2023, since we are on the anteroom of the halving that will take place in 2024, and because the price of BTC (according to technical analysis on the monthly chart) should be at least $43,900 by December 2023, if we want 2024 to start with an upward cycle.

But beyond that, we must be extremely careful with BTC fluctuations, because it is one thing to take into account everything I have mentioned so far, and quite another to know how to surf the upward and downward fluctuations that occur gradually in the price, and getting profit respectively thanks to it. Because, despite what many people think, it is not true that in a bullish scenario, traders cannot lose in the market. In fact, both going up and down, traders can lose all their money if they don't know what they are doing; and that is something that we must understand very well.

In addition, we are also exposed to sudden fundamentals (news) about events that we cannot predict, so therefore, the management that we make of our capital and the risk that we are willing to assume in the market is essential for us to increase our chances of profit, while we reduce the chances of losses in the market.

There is a lot of FOMO in the market

As we well know, FOMO means Fear of Missing Out; and it is nothing more than the fear of missing out on opportunities in the market. In a nutshell, a lot of money is coming into the Bitcoin market cap because of many people pouring in to buy BTC because they think it will go "To The Moon" because its price will hit $100k or more this same year... According what they think and say.

But FOMO is one of the issues with which we must be most careful when trading in the markets; because although it is true that it is a feeling that invades almost everyone when the price of an asset such as BTC begins to rise in a more or less sustained or significant manner, it is also true that sooner rather than later the price will fluctuate downward, and we must be prepared for it.

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Now, am I saying that the price of BTC will go down from now on and that it will only go down and down until BTC collapse and self-destructs? No, not at all, I'm not saying that. I am simply saying that just as there are upward fluctuations (like the ones Bitcoin is experiencing right now), there will also be a return to points below the current price, and this is completely normal and predictable within the market for a healthy asset as BTC it is.

Because as we well know, the market works based on supply and demand, and said supply and demand happens every minute of the market; which means that there are always people buying and selling Bitcoin at any time (because for a reason it is the cryptoactive with greater market liquidity). And we already know what it means to buy and sell, right?

Who buys, it is because they think that the price of BTC will go up, and who sells it, it is because they expect that the price will go down. In this game of fluctuations and beliefs, it is normal that, depending on the volume of purchases and sales in direct relation to the laws of supply and demand, BTC (or any other asset or cryptoactive), fluctuates upwards or downwards respectively.

So Bitcoin is in the area again, fighting as it knows best, as always, but let's not get confused, because we need to act logically to maintain the correct vision of things. Because BTC will continue to be important and its price will be higher and higher in the future, that's for sure, but let's never forget that in the midst of that reality, there will be downward fluctuations waiting like traps all along the way.

What do you think about the topic discussed? Please comment.

_{Gif created by @piensocrates}