PSA: Patience is a Virtue

Price swings in crypto may seem absurd, but they’re nothing compared to the swings in sentiment and emotions displayed on Crypto Twitter.  BTC experienced a 20% drawdown from the local top at $31.7k set in July. That drawdown percentage is now about 13%. But if you didn’t look at a price chart and simply observed public sentiment, you would think we were already back in the low $20ks.

The usual trader/investor monologues about psychology and controlling your emotions have been over-used. But that doesn’t mean it’s not true. A drawdown is not the end of a market. Things tend to get worse before they can get better. Momentum is real — what goes up must eventually come down. Yeah, we joke about “up only”, but that’s precisely what it is — a long-running joke. Investors who truly expect “up only”environments to last for more than a short-lived euphoric burst should re-evaluate the way they think about markets.

Catching a bottom is not the only way to win in markets. The obsession with trying to catch the bottom tick is just as absurd as the people who cry that it’s over after a 20% drawdown. Mind you — a 20% drawdown that occurred after a 105% increase in price (from $15.5k to $31.7k).

The market always gives people opportunities. But if you stick your head in the sand and simply follow popular sentiment, it’s difficult to seize those opportunities. What comes around and goes around. And that includes price. Don’t expect the next cycle to kick off with a giant green candle to $45k. Everything needs time. Sometimes you need some drawdowns so things can eventually settle higher.

In the tweet linked here, Cred very succinctly points out how the market keeps giving us opportunities. Catching price bottoms is not as impressive as catching the volatility bottoms — or time bottoms. If you do end up buying, price runs, and then it retraces a good chunk of the gains, that doesn’t have to be the end of the line — unless, of course, the asset in question is one with no discernible value and was simply a short-term gimmick. Patience is a virtue that the market often rewards. Yes, some coins will never take off again. Some protocols will fade into oblivion, only remembered by the crypto-faithful while reminiscing. But it isn’t the fate of every crypto asset.

My 2 cents is that this market is far from over. Now is the time to be patient, try to get your finger on the pulse on what could be, and wait for the market to do its thing.

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Mastering my emotions is probably the thing I struggle with most in this market - especially around buying. I always hesitate to buy after the price of something moves up - I feel like I have missed the entire move