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You only lose when you sell...

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@jrcornel
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2 min read

Remember, even if you are down, you don't actually lose until you sell...

Bitcoin dropped some 20% within the last couple days and many people are taking it rather hard.

It's been even worse in the altcoin markets with many projects down 30% or more within a matter of hours.

It's hard to watch paper profits vanish into thin air after it seemingly took weeks and months to build them.

However, remember, you haven't actually lost anything until you sell it.

And conversely you haven't actually made any profits until you sell it either, though there are tax issues that must be taken into account there as well.

Things now more to a normalized level..

As much as we would have loved to see bitcoin keep going up and up and up forever, markets just don't work like that.

In fact, the further something runs up, the further it tends to crash when it eventually does crash.

If there are pullbacks along the way, creating new bases all the way up, the price is able to hold higher levels much better.

And to be honest, we haven't had much in the way of pullbacks since the $4k lows back in March.

(Source: https://bittrex.com/Market/Index?MarketName=USD-BTC)

Bitcoin has mostly been straight up since then with this recent correcting being the largest drop since the March lows.

On our way to a healthier market...

In order for bitcoin to sustain higher prices in the longer term we need flushes like we just saw here...

The options and futures markets are much more balanced than they were as well.

Previously they were highly skewed to the long side.

When markets get one sided like that, there isn't really anyone left to buy to push the prices higher.

The Fear and Greed Index is much more balanced as well:

(Source: https://twitter.com/BitcoinFear/status/1301913177345622019/photo/1)

I know this is probably the last thing you want to be reading right now, but drops like we just saw are likely a good thing in the grand scheme of things, at least in the medium to longer term.

We may have a little lower to go still in order to fill that CME gap at $9,700 but in my opinion we are likely close to the bottom already.

Stay informed my friends.

-Doc

Posted Using LeoFinance