Reflections of The 2018 Crypto Market

By now, many crypto investors would have hit their one-year anniversary mark. Amongst them, many would probably have regretted their entries while some would be lamenting at the demise of cryptocurrencies.

I am a tad luckier to have suffered smaller losses, having entered before the maniacal bull run. Around 19 months later, Bitcoin and Ethereum have dropped back to the price levels when I first bought them, so I have somewhat come a full round, assuming they do not drop further.

19 months later, I am still actively following the development in the space, albeit with a scornful eye because I picked up technical analysis, which has shown me the outright manipulation first-hand.

Photo by Tiago Gerken on Unsplash.

I am no crypto expert so these are just my takeaways from this short period. Feel free to disagree and share your experiences!

1. Crypto market cycles are faster and shorter.

Cryptocurrencies are traded 24/7. It is known to be more volatile, with more frequent and violent swings. A price trend can thus be formed (and dissipated) more rapidly, while a cycle is completed more quickly.

2. Most people are still sitting out of the market.

The crypto community is very active on Medium, Hacker Noon, Discord, and Reddit. If you are reading this article, chances are that you are invested. Take a look outside of these channels and into your physical communities, you will find that many people have heard of cryptocurrencies but have not bought into it.

3. Bitcoin’s dominance is still irrefutable.Market Cap Percentage. Source: Coinmarketcap

Although altcoins have eaten up a sizeable market share, and some people would fondly remember the almost-flippening back in July 2017, Bitcoin still dominates in market share.

Assuming market cap is an accurate measure and without considering why Bitcoin still dominates, that very fact means that prices of most cryptocurrencies are still highly dependent on BTC’s price movements. Like it or not, your long-term portfolio will fluctuate with BTC’s prices for as long as this market dominance stays.

4. Many people who have invested are in it for a quick buck, and have no idea about the technical details or how the market is manipulated.

I concede, that was me at the start. So I kept reading, and kept writing.

Nevertheless, the fact that the market comprises of many such people means that the market can be driven by news, rumours, and manipulation. The blind leading the blind.

In 2017, hard forks were a sure driver of prices. The Bitcoin Cash (BCH) fork, the Bitcoin Gold (BTG) fork, or the Metropolis hard fork all drove prices up. Then came the ICO craze. Then, down it goes.

5. The market is manipulated. Malicious people like hackers and scammers are capitalise on the newness of the market.

Try trading with just technical analyses –use any price levels, any price patterns, or price trends. You will most likely be wiped out (:

Jump into ICOs. Use an online seed generator. Skip the research. Buy into the uptrend. Use unverified and public hotspots. Keep your cryptocurrencies on the exchanges.

These are just some of the many ways you can lose your crypto.

6. Fake news, rumours, insider trading, pump-and-dump is rampant, and will still be in the coming year.

Firstly, it is hard to identify fake news these days. They cite their sources, have proper links, and may just be a skewed perspective, so do your research.

We all know the impacts of a Coinbase or Binance listing. There are no outright evidence of insider trading but the technicals do not lie. Nonetheless, it matters to you only if you plan to capitalise on the short-term price spike to take profits.

Pump-and-dumps are orchestrated easily on Discord and Telegram, and you might find yourself in one of them unexpectedly. While it should not affect your long-term investment, taking partial profits on the pumps and entering on the lows can be a viable strategy.

7. Greed is the reason this market exists.

What drives people to invest? What drives money into the space?

It is the reason why this market existed, and it is the reason why it will continue to exist.

8. If you can’t stomach a double digit percentage loss, then don’t hope for a triple digit percentage profit.

The simplest investing strategy is to dollar-cost average (DCA). DCA your entries. DCA your exits. It is a simple way of saying, “I do not know when is a high or a low, so I just average my buys and sells”.

Nonetheless, when the market continually takes a nosedive, are you sure you can keep dollar-cost averaging? Do you have enough capital to average your way to the bottom? And that is when most people stop and wait for a “better” time, and usually a more expensive price to buy back in.

People jumped in hoping to make hundreds or thousands of percentage in profits but they complained when they made a twenty percent loss. Then, they decide to quit altogether, until they see another rise and they FOMO, only to repeat the same actions.

If you do not adhere to DCA, perhaps then you could pick up technical analysis so that you can figure out a high or a low for making entries or exits.

Like most millennials who have not been through an economic crisis, I am inadequate in experience and you are free to label me as a newbie. Call me naive, call me stubborn, but I am certain that the crypto market is here to stay.

These days, I write mostly about cryptocurrencies and share my technical analyses and research in a free bimonthly newsletter. Check out my other work or follow me for more of such articles.

Reflections of The 2018 Crypto Market was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.