It is just so very hard to know how to parse the current macro environment. It doesn’t help that on-chain data is basically directionless either.
In many ways, I feel like this is more bullish than bearish, as you would intuitively think that during maximum fear, people would be exiting in droves.
The reality is we are just not seeing it. Long-term holders are not spending a single sat, Short-term holders appear to be drying up on the sell-side, we have no new incoming demand, and the sellers seem to have nothing left to sell.
How on earth do we parse this?
All we have is the data in front of us, the possibilities ahead, and OUR DECISION in either event.
This is why it pays dividends to think about what you will do before the move happens.
- What will you do if we break down to $30k?
- What will you do if we break up to $45k?
- What will you do if we still have another 12 months of this bear?
- What will you do if the money printer goes brrrr once again and Bitcoin rallies?
These are all questions that we all need to ask ourselves and have a decision framework for. Now as someone who has gone through the 2018-20 bear and learned the hard way, I want to share with you what my strategy is in this context. Remember, this is tuned to my personal circumstances, but simultaneously, it can be useful to hear from others how they are approaching the situation.
Where do I believe we are?
My mental model is prepared for these two situations:
- Here: The capitulation has already happened, we are in accumulation mode, and maximum pain is to the upside. I will never ever forget the FOMO I felt as we rallied from $4k to $14k in 2019, and the reminder that I didn’t own enough BTC.
- or Here: Following that FOMO wakeup call, I stacked my brains out, even as the price kept going lower…and lower…and lower. Then March 2020 happened…that was horrifying. The scariest candle I have ever seen. Did I buy at $3.8k? No. But did I buy at $5k and $6k and $7k all the way back up? Yes, even though my inner voice was screaming at me for being insane.
I’m prepared and ready for a doom wick. I’m also prepared and ready for a FOMO rally. My strategy is to now commence full scale accumulation from here on out. I am in 2019 mode and am buying BTC for 2030 Check, not next Tuesday Check.
I do not really feel fear regarding my portfolio value at this time., simply because I have seen and lived this movie before. In fact I cannot remember the last time I checked my portfolio value…was probably back in April 2021 if I am honest. Reaching a point of zen is no easy feat, but the ONLY way I know to get there, is patience, a long time-horizon, and lots and lots of study.
I believe in Bitcoin, and I believe it will do great things for the world. I also believe we have valuation models like the Mayer multiple, the NVT price, simple supply dynamics, and long-term macro tailwinds all flashing green our favour.
I’m planning for the bear wick, I’m expecting the boring old crab, and I actually don’t want the bull…not yet, I want cheaper BTC…but that is just me.
Remember to reach out if you need anything. Bears can be scary, and sometimes hearing about someone else’s battle scars can calm the nerves.
In the words of the great Jesse Livermore: Sit Tight. Got that!