Current trading strategy for the cryptocurrency market

During last week's online discussion, a friend asked the following question:

For an investor who is not very confident, how should they handle hearing two completely opposing views from two channels that hold entirely different opinions?

For example, one opinion suggests that the chances of witnessing a major bull market in the crypto ecosystem in the near term (such as by the end of this year) are becoming increasingly slim; while another opinion believes that we still have a great possibility of witnessing a raging bull market.

In such cases, I strongly recommend that one should first cultivate the ability to think independently, form their own judgment, and prepare plans to cope with different outcomes.

But if one temporarily lacks this ability, still wavering and unsure whether to buy or not, how should they handle it?

My approach is to prioritize risk avoidance first and profit-making second. Specifically, this means restraining oneself and not buying.

The biggest "loss" from not buying is simply not making money; however, randomly buying will 100% lead to losses, and if one impulsively leverages, they could risk losing all their assets.

For investors who find it difficult to form their own independent judgment (including my past self), it seems that random buying is a common practice, and losses resulting from it are basically a predetermined outcome.

So, don't buy.

But what if it goes up later if I don't buy?

If it goes up, it goes up; clearly, this opportunity does not belong to investors in this current situation.

As long as we firmly believe that there are always opportunities in the investment field, our mindset will be much calmer, and we won't worry too much about "what if I miss this opportunity."

Reflecting on my own experiences, I realize that many times when I lost money, it was due to random buying. So now, when I invest large sums, I am more cautious and pay more attention to restraining myself.

I also remember a friend asking what price I would set for dollar-cost averaging into Bitcoin if the market continues to decline and the bear market worsens.

This current market situation is something I am encountering for the first time, and I believe many readers are too, and like me, they probably still hold onto their Bitcoin without selling any.

Although we haven't had this experience before, I think we can face this situation with a more peaceful mindset.

I recall a passage I shared in an article last year where Lin Yuan mentioned something during an interview. I now remember what he said in that interview.

When asked about his views on the U.S. stock market, his response was quite calm, essentially saying:

He doesn't have any particular views on the U.S. stock market; whether it goes up or down, it doesn't matter. He bought U.S. stocks before 2015, stopped buying in 2015, and hasn't bought or sold since, so he doesn't pay much attention.

Looking back at the U.S. stock market's performance, we can see how low the prices were in 2015. With such a low cost basis for holding these assets, Lin Yuan could face the subsequent market fluctuations, even the storms, with complete composure.

I believe that the recent fluctuations in the U.S. stock market can be disregarded by Lin Yuan.

Using this approach to assess our current situation, we can also face the fluctuations of Bitcoin with calmness.

In my article, I shared that my dollar-cost averaging price is set at $35,000. Using this $35,000 price as a cost basis to measure Bitcoin's current fluctuations, does the difference between $100,000 and $80,000 matter much to us?

Not really; they are both over double, just one is a bit more and the other a bit less.

Since the difference isn't significant, and we already have a position, as long as the money we are using is spare and doesn't affect our lives, I think there's no rush to buy more.

I haven't figured out what a suitable dollar-cost averaging price is yet, but I feel that unless Bitcoin drops to a price that excites me, I probably won't easily dollar-cost average.

So, regarding Bitcoin, we really don't need to pay too much attention; there's no need to anxiously check the market every day or guess the trends with trepidation. We can completely spend that time and energy on other aspects, such as learning more, thinking more, quickly cultivating our ability to think independently, and enhancing our understanding.