For Bitcoin Newcomers – Congrats! You Have Just Experienced Your First Major Pullback
If you don't panic and stay a Bitcoin HODLer no matter what, you will even grow out of it.
Bitcoin is a market apart. You could realize it once again on May 19, 2021. Bitcoin's price volatility is a feature, not a bug. Of course, you've read this over and over again. But you never really realized it.
For newcomers to the world of Bitcoin, those arriving during this bull market rally that began in October 2020, everything has been going swimmingly until now.
It's easy to be a Bitcoin HODLer when the Bitcoin price keeps beating All-Time High (ATH) month after month. It becomes harder to remain a Bitcoin HODLer and not give in to your emotions when we experience a day like today.
Panic grips the market and the price of Bitcoin plummets by 30% in a few hours
Yesterday at this time, the price of Bitcoin was around $43K. That was already a big drop from its $55K price last week before Elon Musk caused chaos in the industry with his tweet on May 13, 2021. And then, in a matter of hours, the price of Bitcoin dropped from $43K to $38K, before experiencing a brutal sell-off on several exchange platforms that dropped its price by $8K in a matter of minutes.
It almost felt like a return to what we experienced in March 2020 when the price of Bitcoin hit a low of $3.6K.
However, there is a big difference this time as the low was hit at $30.6K. If you take a step back, you will realize that there is no need to panic.
The Bull Market is far from over in my opinion. The major pullback we just experienced was accentuated by the Elon Musk episode and then by FUD news from China. The Asian market took the brunt of the blow, which caused this major pullback in the price of Bitcoin.
At the height of the Bitcoin price drop, many exchange platforms were down. From Coinbase to Binance including Kraken and Gemini. Newcomers to the Bitcoin world were clearly giving in to their emotions by selling at a loss the BTC they bought during the current bullish rally.
For many newcomers to the Bitcoin world, this is their first major pullback
For many, this is the first major pullback they have experienced with Bitcoin. They need to get used to it. It happens frequently, and you need to step back at times like this to take the long view. This will help you keep your emotions in check.
This is clearly not the time to sell. Some people have asked me that question, and that's not my strategy. I remain confident in what lies ahead for Bitcoin in the coming months.
There is no need to panic. Those who panicked by selling will regret it in the future. But let's hope they learn from it.
The bottom seems to have been hit, and the situation should return to normal in the coming days
Personally, I think we hit the bottom of this major pullback at $30.6K. The strong rebound we saw afterward leads me to believe that:
But again, no guarantees. This is just my feeling that I share with you here. We'll see what happens next in the hours and days to come.
For newcomers who want to survive this first major pullback in their Bitcoin adventure, the best thing to do is to take a step back. Detach yourself from the Bitcoin price charts. Stop looking at the Bitcoin price constantly. Use this time to relax.
When you come back in a few days, you'll see that everything will be back to normal. This major pullback will already be behind you, and you'll have learned an essential lesson that every Bitcoiner needs to learn: there is an essential difference between theory and practice when it comes to HODL Bitcoin no matter what.
This little illustration I created in 2020 for an article explaining this will help you understand it better:
If you want to take full advantage of the Bitcoin revolution, you'll have to overcome your emotions and seize the opportunities the market offers. This is one of them right now. It's up to you to decide whether you want to take it or whether you'd rather have regrets at the end of 2021.
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