6 Essential Things You Need To Know Before Entering The Next Bitcoin Bull Market
It would be a pity if the mistakes made at the end of 2017 were to happen again.
It is November 12, 2019 and the price of Bitcoin is around $8,800. Knowing that Bitcoin had started the year 2019 at a price of $3,742, this gives us an increase of about 135% of its price since the beginning of the year. No other asset does better over this period, whether it is gold or the equity market, with the S&P 500 at the top.
The coming months should be even better for the Bitcoin price. Indeed, the creation of new Bitcoins will become rare with Halving scheduled for mid next year. In addition, the year 2020 looks uncertain from an economic point of view, with an economic crisis that has been announced for many months and will eventually come one day or the other.
On the political level, it is hardly more reassuring with the uncertain outcome of the trade war between the U.S. and China, the situation on Iranian nuclear power which only reinforces tensions with the U.S. and culminates in the 2020 U.S. presidential election scheduled for the end of the year which could reshuffle the cards.
All this will benefit Bitcoin and its next bull market is likely to be very intense. In order to avoid that the mistakes made by a very large number of people at the end of 2017, it seems essential to me to come back to 6 essential things that you absolutely must know before this next Bitcoin bull market.
1. Bitcoin Is Still Very Volatile
Bitcoin started the year 2019 with a price of $3,742 before rising impressively to reach its annual high on June 26, 2019 with a price of $13,793. The price of Bitcoin then showed an increase of nearly 270%!
Since this annual high, we have seen a correction in the price of Bitcoin, which decreased from the end of September 2019 to reach $7,475 on 24 October 2019.
Two days later, the Bitcoin experienced a spectacular surge in its price by nearly 40% to reach $10,300 in just a few hours following a change in China’s position on the Blockchain.
Indeed, Xi Jinping had just decreed that the development of the Blockchain was now a national priority for China.
This statement had the effect of a bomb in the cryptocurrency world as shown by the soaring price of Bitcoin. This is simply the largest increase since 2011 and the third largest since the creation of Bitcoin in 2009.
Since then, the price of Bitcoin has dropped to around $8,800.
All this should make you aware that Bitcoin remains an ultra-volatile market.
Everything can therefore go very quickly upwards but also downwards. Price variations are much more pronounced than in traditional markets, which is obviously not without risks for beginning investors. So be careful!
2. You Must Know That You Can Lose All Of Your Money With Bitcoin
I have just shown you, if necessary, that Bitcoin is an ultra-volatile market. In fact, you should know that you can lose all your money with Bitcoin.
There is no secret: if Bitcoin makes big gains, it is because it is a high-risk asset.
With the upcoming Bitcoin bull market approaching, I think it is important to recall this fundamental truth, which also applies to the entire cryptocurrency market.
If you are risk averse, you should simply go your way and not buying Bitcoins or Altcoins.
On the other hand, if you have a good understanding of the volatile nature of the cryptocurrency market, and are willing to take investment risks because you want potentially high capital gains, you can embark on the Bitcoin adventure.
3. Never Invest Money That You Can’t Afford To Lose
This third advice is not specific to Bitcoin and cryptocurrencies. Indeed, it is simply the most important investment rule:
Never Invest Money That You Can’t Afford To Lose.
While this fundamental rule applies to traditional financial markets, it is all the more true in the case of Bitcoin and Altcoins. Indeed, I have just shown how volatile the Bitcoin market can be. In addition, I have warned you that you can lose everything with this type of investment.
As a result, you should only invest in Bitcoin, and cryptocurrencies, money that you can afford to lose. No more, no less!
This will allow you to have much less stress when taking positions in the cryptocurrency market. And everyone knows that better decisions are made with a cool head.
4. Beware Of FOMO’s Feeling On Social Media
FOMO stands for Fear Of Missing Out. It is a kind of social anxiety that is characterized by a desire to stay continuously connected with what others are doing. In an era of the omnipotent power of social media, FOMO’s feeling is now spreading at a phenomenal pace.
Remember the madness that seized Twitter at the end of 2017 when the Bitcoin reached $20,000.
Everyone was afraid to miss the soaring price of Bitcoin and everyone wanted to buy it. Most of the novice investors who rushed to Bitcoin at that time then had a difficult future in 2018 following the bursting of the bubble that had formed around Bitcoin and cryptocurrencies.
The next Bitcoin bull market is likely to produce the same FOMO feeling for many people in 2020.
The best advice I can give you is to stay away from social media when Bitcoin prices change significantly.
Make a list of resources that you consider safe on cryptocurrencies and Bitcoin. Then, you can hang on to it during these strong price variations in order to avoid succumbing to FOMO’s feeling and making investments under the influence of emotion.
5. Do Your Own Reasearch Before Buying Bitcoins
I would like to say that DYOR (Do You Own Research) is to investors in cryptocurrencies what RTFM is to computer programmers. For information, RTFM stands for Read The Fucking Manual.
This term is the answer given to novice programmers who do not do their own research in order to find obvious answers to their questions.
In the world of cryptocurrencies, what you do not know costs you money.
You should therefore seek to maximize your knowledge by doing your own research on Bitcoin or other cryptocurrencies that you will target.
This will allow you to make your own decisions based solely on your knowledge and experience. In this way, you will limit your exposure to the feeling of FOMO, which can cause a lot of damage in some people.
Remember that there is nothing worse than investing in something you do not understand.
And on this point, even Warren Buffett, who is so critical of Bitcoin and cryptocurrencies, cannot contradict me!
6. Set Yourself Reasonable Time Slots For Your Cryptocurrency Trades
During the bull market for Bitcoin and cryptocurrencies that is expected in 2020, prices will be subject to significant upward or downward fluctuations. As an investor, you may be tempted to stay in front of your computer screen for hours and hours to follow all variations of Bitcoin and Altcoins.
Be aware that even if Bitcoin and cryptocurrencies never sleep, you absolutely must set yourself slots for your trades.
Why? Quite simply because by never leaving your computer, you will tire and lose your vision. And it is precisely at these moments that you are most likely to succumb to the feeling of FOMO or to make bad trade choices.
By setting yourself reasonable time slots, you will make better trades on Bitcoin and cryptocurrencies because you will be more farseeing.
Bitcoin is currently around $8,800 and is in a period of relative stagnation before the next bull market that awaits it in the coming months. As the rest of the cryptocurrency market is clearly indexed to Bitcoin, the same applies to most Altcoins.
When the next bull market starts in 2020, you will have to be careful not to make the mistakes made by some investors in 2017 in order to take full advantage of Bitcoin and cryptocurrencies.
As such, I recommend that you put into practice the 6 tips I have presented to you in this article.