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Bitcoin: downturns or opportunities?

Sat Nov 23 2024

If you are investing for the long term, you are obviously assuming we haven't seen the last bull market yet. This means that the current bearish trend is nothing more than an opportunity to position yourself for the next 5-10 years. A positive approach is to view current prices in the context of the potential profits that buying now can generate in the long run.

Why Market Downturns Could Actually Be a Good Thing

Market downturns don’t have to be as bad as they seem. In fact, the real danger often comes when everyone is hyped up. I’m not here to sell you some “end of the world” story—yes, the economy’s tough, but I’m not trying to freak you out. I’m just giving you my honest take on things, hoping it helps you navigate the risks.

Tired of the doom and gloom? Flip the script. Instead of stressing over the downturn, think of it as an opportunity. If you’re in it for the long haul, this might actually be your chance to score big. The idea is to think about assets as long-term investments. If you believe in the asset you’re holding, the drop in price becomes a potential buying opportunity.

Here’s how: imagine buying now and selling when the market bounces back. It’s not about selling at the peak, but getting in while everyone else is panicking. That’s when you can really make a profit.

If you think long-term, market corrections don’t look as scary. In fact, they’re opportunities to increase your potential gains. Here’s a popular idea: do deeper corrections lead to bigger bull markets later? If that’s true, we can use it to guess where the next rally might go.

A correction is just a dip between two highs. In a general bull market, these are brief drops that don’t change the bigger trend. If we focus on the big moves and ignore the smaller blips, we can figure out how deep the dip was and how high the next rise could be.

So, if you’re thinking long-term, don’t see the current downturn as the end. It’s just the setup for the next big wave. Think about today’s prices as a chance to make money down the road.

Here are three strategies to keep in mind during a bear market:

Have Enough Collateral: Don’t risk getting liquidated if the market crashes. If that happens, your growth potential is gone.
Timing: Wait for either a full crash or signs the economy is improving before jumping in. That’s when the risk/reward balance is the best.
Go for Big Wins: Look for investments that have high potential rewards with low risk. Don’t waste time chasing small gains.

In the long run, it’s better to go for the big wins than getting caught up in small victories.