For the renowned market analyst Willy Woo, for example, after the arrival of the pandemic stood in the way of the rise, the cryptocurrency entered a bullish phase in June of this year, after exceeding $ 11,000. Time to invest, many will think.
Bitcoin got a steady recovery from the crash it experienced at the beginning of the coronavirus quarantine when its fall reached to the level of $ 4,000. Since then, bitcoin has kept its position and is currently hovering around $ 11,000. Various analysts claim that a new bull run on Bitcoin is on the way.
For the renowned market analyst Willy Woo, for example, after the arrival of the pandemic stood in the way of the rise, the cryptocurrency entered a bullish phase in June of this year, after exceeding $ 11,000, as we reported in CryptoNews at that moment. Time to invest, many will think.
Indeed, bull markets can be an attractive opportunity to profit. However, there are also many risks for investors. In the young history of Bitcoin, we already have a precedent to review and not make possible mistakes during this stage in which the movement around cryptocurrencies is triggered.
In this note, we can see a whole series of scenarios during the bull run of 2017 that left plenty of valuable market lessons. At that time, bitcoin caressed$ 20,000, and new cryptocurrency projects were pouring out from all sides seeking to capitalize on the fame that the ecosystem was gaining. Many made money, many more lost.
Everything that goes up must go down
During the last months of 2017, Bitcoin entered a very pronounced bullish phase, which quickly pushed the price of the cryptocurrency to its all-time high to this day. In a matter of just a month, Bitcoin tripled its market value.
To some, it seemed like a great idea to buy when it was around $ 17,000, $ 18,000, or even $ 19,000, and it seemed like it wouldn’t stop going up. But just as the rise was quick, the fall was also very fast. After touching $ 20,000 in mid-December, a month later the price of BTC fell by half. Never since then, the price reached close to even $ 16,000 in value.
Therefore, a key recommendation is not to succumb to the FOMO (Fear of Missing Out or “Fear of missing something”). In the case of investments, the FOMO is considered as the sentiment that leads investors to buy for fear of losing the potential gains of an asset that is on the rise.
It is essential to have a clear investment strategy. Particularly in the case of Bitcoin, it is relevant to know if you expect long or short term gains. So far, the cryptocurrency created by Satoshi Nakamoto always proves to be efficient as a long-term safeguard of value. If we refer to the annual averages, we see that BTC has appreciated year after year. There was only one exception, in 2015, when the Bitcoin average was around 50% below the previous year.
Having a clear investment strategy will allow you to know if you are prepared to take losses in the short term, particularly in a market so volatile and difficult to predict. As examples of this, we have the peak reached in March of this year, at levels of 6 years ago; and then the drop in volatility registered in June.
By: Jenson Nuñez.