Bitcoin: Bull-run Tools

Hope you guys are doing well.

I understand the Crypto/Investing section of this blog is not my most read. However, I am passionate about Crypto and Investing, so I will continue to post here.

Today I want to share with you some valuable tools that can aid you in the coming Bitcoin Bull Cycle (I believe we are just getting started).

These are tools I wish I had a few years ago. Perhaps they will aid some newcomers in making some wise/profitable decisions.

  1. Crypto Fear & Greed Index

Screen Shot 2020-07-30 at 10.56.51 AM

Fear & Greed Index

As I write this the current sentiment in the crypto markets is “extreme greed”, score: 76. On the opposite (left) hand of the scale you will find “extreme fear.

Simply:

  • When the market is in a state of “extreme greed”….this presents a selling opportunity .
  • When the market is in a state of “extreme fear”….this presents a buying opportunity.

No need to overcomplicate things.

Doing the opposite of what the herd is doing is often the most rewarding action.

I want to take a moment to acknowledge that I made this mistake recently. I took a small position in $AMPL upon the back extreme greed.

I followed the herd.

This was a mistake.

What I should have done was acknowledge that the market was in a greedy state….

I should have waited for some fear to return to the market before opening a position. 

To the next tool….

2. Mayer Multiple 

This tool is used to determine when it is a profitable time to be accumulating Bitcoin for the long-term.

Screen Shot 2020-07-30 at 11.02.28 AM

Here is a link: Mayer Multiple

Currently the Mayer Multiple is 1.28.

“The Mayer Multiple is the multiple of the current Bitcoin price over the 200-days moving average.”

“Simulations performed by Trace Mayer determined that in the past, the best long-term results were achieved by accumulating Bitcoin whenever the Mayer Multiple was below 2.4. 
Since the simulations were based on historical data, they are purely educational and should not be the basis of any financial decision.”

Based on the current Mayer Multiple (1.28) now would (historically) be a good time to accumulate Bitcoin.

Disclaimer: (I know cringe) I am not a financial advisor. Always do your own research before investing.

 

3. Bitcoin Stock-to-Flow Model

I have mentioned the stock-to-flow model before (read Bitcoin….Not if But When)

Here is the most recent chart:

 

Screen Shot 2020-07-30 at 11.06.33 AM
Plan B’s Stock-to-Flow Model

Here is a link: Live Stock-to-Flow Chart

Again, to keep things simple.

Blue dots=Bear markets/good opportunities to accumulate Bitcoin for the long term.

Red dots=Bull markets/good opportunities to sell or reduce exposure. (personally I will be holding my Bitcoin on a long term time horizon.)

These are just a few tools that I wish I had during the last cycle 2017 Crypto cycle.

It is my opinion that this next cycle will be larger than the last due to various on ramps and the even higher prevalence of social media.

Not only that, but Central banks continue to debase their currencies recklessly.

I believe Bitcoin will shock the world in the next 18-24 months (could be wrong).

I hope these tools help though.

Sometimes we have to check our emotions to navigate markets clearly.

Use these tools to keep yourself in check and not get too sucked into Euphoria/too fearful or discouraged from downturns.

“Buy when they cry.”

“Sell when they yell.”

Hope these help.

Talk to you guys soon.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.