Sweaty, Sweaty Bears
There's no shortage of Bitcoin bears who are feeling a bit on edge about their thesis, and rightfully so. The road higher won't be easy, and the bears still have several lines of defence to hold.
G’day Folks,
My thesis about the four-year cycle is that it was unlikely to break in the bull market, but was considerably more likely to break in the bear that followed.
The way smart money investors behave is very different to speculators, and the majority of retail. Institutional allocators, and folks who have been around markets for many years, know what capitulation events look and feel like, and it changes their behaviour.
Smart money starts to take on risk when the market narrative feels the most dire.
They have been the one panic selling at the lows numerous times in the past, and learned from their mistakes.
They know what it feels like to be sidelined when an asset they wanted to own starts running away from them.
They recognise that there’s no prize for buying the bottom wick, and the winning strategy is to stack the odds in your favour over the long-term.
There are a lot of people who are in complete disbelief right now, because they were expecting much lower prices, have bids that were not filled, and currently feel like an under-allocated deer in the headlights.
The bulls are already running victory laps, and the bears are questioning what went wrong. For the folks who missed the lows, many are about to buy far too much at the next local high, and get smoked once again on the pullback. The bears will then add heavily to their shorts…at the exact point when they should be buying.
Today’s post will be an assessment of this Bitcoin rally into the mid $80ks. My aim is to help anyone feeling like a ‘deer in the headlights’ to set sensible thresholds for when the bear thesis is invalidated, and the bear is properly slain.
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