RE: RSI and MACD showing weakness in the face of a price rally...this is rarely good. by crypto.piotr

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Viewing a response to: @fijimermaid/rsi-and-macd-showing-weakness-in-the-face-of-a-price-rally-this-is-rarely-good

· @crypto.piotr ·
Dear @fijimermaid

Solid read. Topics related to finances are definetly one of my favourite ones :)

I myself don't use RSI and MACD indicators much, however I learned that millions of investors around the world care about TA. So obviously if those millions will come to some conclusion based on MACD, then chance that they will be right is increasing. It's little bit like self-fulfilling prophecy, wouldnt you agree?

> If you need some cash over the next 12 months...now is probably the time to cash in some crypto.

I'm a bit confused. Is current dip a good time to change crypto to FIAT ? Wouldn't you expect that current dip will come to an end sooner than a year from now? (mentioned 12 months)?

>  But it looks like we are going to take a bull market break.

My impression is very different. This bull market is far from being over. We had years to shake off so called "weak hands" and most people who are in crypto space are the ones who have been around for quite sometime. And recent short bull run has been simply TO SHORT. So not that many newbies enteres the market.

It's crutial to rememeber, that so called "market makers" build their wealth by transfering it from all those newbies. Who are easy to be scared and tent to panic-sell. We just don't have much of them yet. 

I would recommend checking out google trends for "bitcoin". Once this will reach all time high (Which would last at least for several weeks), then we may expect another heavy crash and perhaps even return of bear market. Until then - I think we're still up for solid upward movement (after few weeks of consolidation).

Have a great weekend buddy,
Cheers, Piotr
👍  
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@fijimermaid ·
Thank you Thank you.

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- “It's little bit like self-fulfilling prophecy, wouldn't you agree?”

I do agree.    Trading any sort of asset is influenced by buyers and sellers.   It's hard to know if the horse is pulling the cart or the cart is pushing the horse...especially when the momentum in markets increases.

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- “Wouldn't you expect that current dip will come to an end sooner than a year from now?”

12 months is a safe bet based on historical data.   It may recover sooner than that.   But if you need cash in that 12 months.   Cash to pay off debt.   To service debt payments.   For living expenses.   Enough cash so you can survive financially for the next 12 months.  Especially if you're living paycheck-to-paycheck.    That is what I meant.

The worst circumstances that a person can put themselves in financially, is to not have enough fiat to survive a bear market...where they are forced to sell assets at significantly lower prices to cover their expenses/debts.   It's best to sell ‘just enough’ at higher prices just to get through the bear market.  But if you have a 12 month emergency fund... then you probably don't have to sell any crypto investments. 

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- “And recent short bull run has been simply TO SHORT.”

The last Bull Market - Jan 15’ to Dec 17’ - 2 years, 11 months
The most recent Bull Market - Dec 18’ to Apr 21’ - 2 years, 4 months

This bull run is not the same length as the last one, or the proceeding ones,  but future market action is rarely the same as the past.

I think each successive bull run is going to be less profitable (peak to peak)...it takes a whole lot less money to move Bitcoin from $1,000 to $2,000 versus $10,000 to $20,000, or a $100,000 to $200,000.   

That is good and bad.   Bad because people will make less ROI each bull run.   Good because over time the volatility will drop, which makes it much more desirable as a medium of exchange.

As far as market makers and Google Trends are concerned... I agree, those are important things to track for FOMO.   Plus, to your point on a bull market, central banks continue to expand credit, that is going to have positive upward pressure on crypto.
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