You can look at all the market data you want, but can numbers and charts really help you predict the market? Perhaps, but some say benefiting from the market is all about simple lessons in psychology. To use bitcoin as an example, one can earn bitcoin efficiently by understanding the principles of pessimism, optimism, and euphoria. Here’s how.
Image via FisherInvestments.com
Do fear and greed only drive the market? Often, investors want to sell when it’s low out of fear and buy when it’s high out of greed. Yet, when trying to earn bitcoin, it is more complicated than that. If you look at the peak of the 2013 cycle, you’ll see that HODLers continued to hold even as the peak approached. As the price rose from $100 to $1,000, long term HODLers still kept on holding while we began to see some newcomers start buying. Eventually, some early adopters did start liquidating their positions. Hence, there was a temporary end to the positive momentum. This is when pessimism started to kick in.
When the early adopters started feeling pessimistic about Bitcoin and liquidating their assets, the market dropped once again. Then in 2014. We saw the gradual four-year rise of Bitcoin that later peaked in 2018. This rise was based solely on optimism for bitcoin and cryptocurrency on the whole. Optimistic whitepapers were flooding the internet, with grandiose promises of revolution. Everyone thought this was the best time to earn bitcoin before it took off to infinite heights. Eventually, the market hit a euphoric high that was just unsustainable and the bubble had nothing to do but burst.
When the bubble did burst, the market descended into psychological elements of anxiety, denial, desperation, and panic. As CoinMetrics stated in an article, “investor psychology suggests that prices cannot truly bottom until all investors have reached a point of maximum pain and capitulation is complete”. This essentially sums up the “crypto winter” that took over 2018 and parts of 2019. As we approach 2020, feelings of complete depression are once again becoming feelings of hope.
To share another quote from renowned investor Sir John Templeton “To buy when others are despondently selling and sell when others are greedily buying requires the greatest fortitude and pays the greatest reward.” In simple terms, it means to identify the points in the market cycle when the majority of participants are feeling a certain way and capitalize on that emotion.
For example, when the market is bearish, and many are feeling pessimistic, then use YouHodler’s Turbocharge feature to buy more crypto when their rest is trying to sell. On the other hand, if the market is on a bull run and your portfolio is skyrocketing in value, it can be tempting to sell, but don’t do that.
Instead, a crypto backed loan on YouHodler can give you fiat for your crypto collateral. You still get money for your precious crypto but then you don’t have to sell and miss out on any possible market growth in the future. Between these two features alone, it’s easy to earn bitcoin smartly without giving in to the market emotions.
Alternatively, a safe and guaranteed way to earn bitcoin with YouHodler’s crypto savings accounts where you can earn up to 7.2% APR. So visit them today to start earning Bitcoin the way you want to.