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December 25, 2017 | Bitcoin Silliness: Ignore the Roller Coaster, Never Sell

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
If bitcoin’s price plunges 70%, it is only back to its 200-day moving average near $4,473.

The latest wisdom of the day from true believer Naeem Aslam is Ignore a 20% to 30% drop in bitcoin because the longer trend is up

If you dive into the article Aslam states “If the price drops by 70% now, it only will be touching its 200-day moving average, which is near $4,473. ”

Apparently, one should ignore a 70% plunge as well. Then what?

Suppose you were one of those who bought at $18,000 or so. You would be down about 75%.

OK no problem. Since “the trend is up” so you buy on the moving average. Or simply keep buying down. You get a nice bounce off the moving average and you load the boat as any true believer in JDSU would tell you to do. Excuse me, I meant to say Enron, no I meant Bitcoin. Sorry for the confusion.

Now let’s suppose the bounce dies. It goes back to the moving average. Are you getting a little nervous or not?

Aslam supposedly won’t be. The trend is still up. Then something unexpected happens: The trend breaks and Bitcoin falls to $2000.

This is entirely hypothetical of course. Yet, the trend will break at some point. So here you are, you had a brief profit on the buy at $18,000 you bought more and more on the way down. You had a profit on that too. Then the trend broke.

Now what?

Will you sell? Will true believers ever tell you to sell?

I can tell you in advance what they will tell you: “It’s too late to sell”.

Mike “Mish” Shedlock

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December 25th, 2017

Posted In: Mish Talk

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