I want to talk about something today that I have already talked about many times in my past articles; because it so critically important for you to understand this if you are in cryptocurrency wanting to maximize your gains. Do Not FOMO. (fear of missing out)
An example of FOMO'ing in would be that you see the price of bitcoin skyrocketing to new high levels, and you feel that you need to quickly invest more money so you don't miss out on the possible gains. Or quickly buying because you're afraid you will never be able to purchase bitcoin again at these price levels.
And then, suddenly the rug is pulled out and the price of bitcoin plummets much lower than your original purchasing level. If you had only just waited you could have gotten much for bitcoin for the amount of cash that you paid. An example of this exact situation just happened yesterday. Bitcoin had quickly risen up to a price of $18,476 and everyone was feeling the euphoria that $20,000 was possibly a few minutes or hours away from happening.
And then the rug was pulled out. The price plummeted down more than $1,300 in literally seconds.
It's unfortunate because many people just paid much more than they needed to for their bitcoin, but the more unfortunate thing for many people is what happened next.
After this rug pull, the price was dropping incredibly fast and this can lead to a different kind of FOMO. Selling because you fear the price will keep dropping. But then, a few hours later the price had nearly completely recovered and gone back up to the $18,250 level.
All those people who panic sold during this drop would now have to pay much more if they wanted to buy back their bitcoin.
This happens all the time and this is always why you need to have a plan. In my situation of course I'm thrilled if the price goes up, but I'm just as happy if the price goes down, because this gives me a chance to accumulate more. But in all honestly, right now I'm not at all concerned about the price of bitcoin, ethereum or any other cryptocurrency. I have my own strong beliefs where I think the prices will go to, and I have already made my own cash out plans that I will strictly follow.
YOU NEED TO BE READY.
I say this because for many of you this will be your first bull market and you have not experienced the real level of volatility that comes with it. Be prepared for multiple swings up and down of thousands of dollars in bitcoin during the same day. This is the time that you need to HODL strong if that is your plan. Or stick to your cash out plan if you are wanting to sell for cash. Just don't FOMO.
The best approach in my opinion is definitely to Dollar Cost Averaging. Investing equal amounts each time you get paid. This will net you the price drops and also the increases, being right in the middle. But of course please keep a nice amount on the side as well to take advantage of a rare event drop. For example during the March price drop I invested a very high amount of money into bitcoin, ethereum and a few others. And it turned out being one of the best decisions I ever made. But if I didn't have cash ready on the side, I wouldn't have been able to take advantage of that moment.
Of course not FOMO'ing is often easier said than done, and years ago when I entered the cryptocurrency market I definitely FOMO'ed more times than I would like to admit.
But how about you? Have you ever FOMO bought or sold!? And what are your price predictions for bitcoin and ethereum?!
As always, thank you for reading!