Stepping in here, because this translates to a significant probability that I will lose almost all of my BTC:
I doubt that we are even close to max pain...
bears are going to push the BTC price down as low as they can and hold it there as long as they can.
Other than "buy a time machine, go back, and bat-slap myself a few months ago", do you have any suggestions for someone who fell into a
margin debt trap? There are no right answers in this all-wrong situation, but I want to pick your brain.
It does not hurt to attempt to crowd source this kind of information in this thread, and surely it is a topical subject matter - and there are a lot of guys here who do not fuck around with margin trading... but we have quite a bit of varying experiences.. and there might be some ways to reasonably unravel some of your positions.. and surely some guys in this thread do play around with margin trading so they may well be able to hone in on your specific situation... but surely ultimately there are going to be discretionary decisions no matter what and you are ultimately going to have to figure out if it is better to just let matters play out or to early close some of your positions - if that is practical under current market conditions.
By the way, when I say things like bears are going to try to push the BTC price down and they are going to try to keep the BTC price down as low as they can, and for long as they are able to do it, yet that statement also does not concede that they are going to be successful, even if that is what they want to do. We have a whole hell of a lot of circumstances (situations) in bitcoin in which the bears and everyone else and their dogs thought that BTC price was going to continue to go down, but the bottom was already surprisingly in.. so a large number of folks (even the vast majority) can end up getting surprised as hell that the BTC price ends up reversing when it seemed that it was inevitably poised to go further down to some price point that ends up not even close to happening.
You may realize also that even though I might spout out some ideas about what I believe might happen, it is very difficult to get me off of 50/50 predictions... and if I lean one direction or another then many times, it is only a few percentage points at best in terms of leaning one way versus the other way... so sure, if I believe that we are in a bull market then I believe that all breaks from consolidation would have slightly greater odds for up than down.. and the opposite would be true in a bear market... so even if currently it appears that we are in a bear market (because the BTC price has spent a few days below the 100-week moving average, which is at $35k), then that would mean that the odds for breaking down would be greater than the odds for breaking up.. but even if the odds are greater for breaking down, that does not even mean that they are going to end up breaking down, rather than up, and it still is possible that the bottom is already in... and surely guys are going to assign odds differently for various price points, and the further down that you expect the price to go, the lower the odds are going to be that that the lower prices will be met.
Hopefully that makes sense... and my own way of structuring any buy or sell orders that I do is to attempt to structure them in a way that I am emotionally neutral about whether the BTC price goes up or down in the short term - even though I expect that at any point in time, 4 years from now, the BTC price should be higher than it is.. but not even that is guaranteed.. and I am ultimately bullish about the upside potential of bitcoin, but I also try NOT to structure my own finances in any kind of way that I am overly desperate for UP to happen. .even though I believe that bitcoin is the best investment that anyone can get into.. but that also does not guarantee that it is ultimately going to perform as is expected and hoped.. even though it seems to be better than any other asset (in my current opinion).
Another thing that I tend to do is to attempt to unwind any mistakes that I get into in a kind of incremental way... so if I see that I got myself into an uncomfortable kind of pickle situation, then I attempt to figure out a way to get myself out of such pickle situation by incremental actions.. and surely there may also be situations in which it is better NOT to behave incrementally, and sometimes there are situations in which the bandaid should be pulled off quickly rather than slowly.. and each person may well judge the situation differently and the extent to which an incremental or a rapid approach might be better for the particular situation that exists after accounting for all the relevant psychological and financial factors.
If I had been willing to "cash out" (I hate that term), I could have exited this position at $47k-48k last month, and walked away with more BTC than I started with. I didn't do that, because selling BTC is unthinkable.
That approach of never selling can work if you do not over invest. If you do not over invest, then you should be ok. as long as you have at least a 4-10 year time horizon... So there are quite a few BTC HODLers who started out trying to play around with buying and selling, and many realized that it is better to not get so worried about trying to time the market and just establish a regular buying practice...
So if you are wanting to fuck around with selling and trying to buy back cheaper, I am not going to be very helpful in that regard because my own personal philosophy is that you should not be selling any of your BTC until you get to a position that you are over invested.. and then once you are over invested, then you can figure out some selling strategies that are incremental.. and in that regard, if you sell any BTC then you should be prepared that you may well never ever be able to buy back any of the BTC that you sold... and sure, if the price ends up going down then so be it.. but you should not be selling for the purpose of buying back cheaper but only selling because you have a reasonable system to establish that you have over invested into BTC and you are able to shave off some BTC here and there on the way up.
Instead, for much of the past week, I was liquidating other assets and pouring proceeds into the distressed account. I drew the "no more!" line on Sunday, because I could lose absolutely everything this way.
Of course, I am not going to be able to relate to your having had got yourself into such a situation.. so you surely might be out of my area of expertise because it sounds as if you were engaging in risk taking practice that are beyond what I would have done.. and gosh, I am not even saying that I might not gamble from time to time, so I know how to do it, but I tend to do it with relatively small amounts so I don't end up in a situation in which I cannot cover whatever bet I had ended up making when the direction of the bet had ended up going against me... I am not without experience in that direction.. just a matter of degree to which I would let something go seems quite different calculation from what you seem to have been doing.
To begin with, most of my liquid or liquidatable assets were in BTC - now trapped as collateral in the account that first ate all of my BTC as I added collateral to avoid losing BTC, and then has been eating everything else, too. Other things elsewhere are safe, but mostly gone already. I am good at hunkering down and waiting out bear markets, as long as I am not at liquidation risk!
It is not easy to know your exact particulars, but let's say that you borrowed $45k when the BTC price was at that price so it was the equivalent of 1 BTC... So you had to always keep at least double the collateral.. so the minimum was to keep 2 BTC, so you wanted to hedge for the BTC price going down, so you ended up putting 3 BTC, but once the BTC price went below $30k, your 3 BTC became insufficient as collateral.. so you either had to put up more or to have your position closed.. and you would lose the 3 BTC that you already put as collateral... but if you did not have any more BTC then you failed to sufficiently prepare and if you had put up 4 BTC then you could have been sufficiently collateralized until the BTC price got down to $22.5k..
I guess part of my point is that you have to both understand the terms that you are agreeing to, and also to be able to cover in the event that the BTC price goes way lower than expected.. Maybe you thought that the worst case would be that the BTC price went down to $35k. but you ended up being wrong.. so anyhow, it is really not good to get into those kinds of complicated relations, and it is difficult to know exactly how you can unravel yourself from a position that already would end up being at a loss if you unravel when the BTC price is going opposite to expectations.
By the way, of course, I know that I probably got various specifics of your pickle wrong.. but just trying to describe some of the pickles that guys can end up getting into.. and sometimes the BTC price drops so fast that they are not able to cover their position.. and sometimes also there are shenanigans going on, as you already acknowledge that you are aware of some of the seeming shenanigans that happen (or seem to happen).
So for example, max pain could be going down to the 200-week moving average or even going below that and maybe staying there for a certain amount of time... sure it does not seem plausible.. but for sure manipulators shoot to achieve the implausible and to sustain it for as long as they are able.. and we know that the 200-week moving average is currently at about $21,750.
In essence, we can try to give probabilities of what max pain might be.. and for sure that is not going to be easy.. including that even seemingly low probability events could end up happening.... and for sure many guys will continue to buy. all the way down.. and for sure I would need to reassess my cashflow if we were to go below $25k..
If we go down to $25k (never mind lower), I lack sufficient assets to avoid selling most of my BTC - or worse, having it sold for me in a huge market-dump into a red candlestick, with a penalty.
For sure we should always be attempting to prepare ourselves for extremes - even if they seem to be on the lower end of probabilities... so it is difficult enough to deal with these kinds of extremes without margin or without bets.. so the losses are magnified when dealing with various kinds of leveraging.
Without even playing with margin, historically in bitcoin, I have had so many times that I try to prepare for the most extreme dips.. and frequently I feel pretty good because there seem to be always so many guys who had run out of money only on a 20% dip or something like that... and we know that bitcoin not only does extremes, business sometimes it does extremes that go beyond the extremes that are on the seemingly worse case scenarios.
Anyhow, so I have so many times reserved money to be able to continue to buy on the way down, and yes, I understand that you have put yourself into a magnifying loss situation, and those folks manipulating the BTC price down are incentivized by guys like you to shake you out of your position and out of your BTC.. so once everyone (or almost everyone) is shaken out that is easiest to shake, then the price will go up at that point.. and we cannot really know how far.. and sometimes when the BTC price drops way the fuck lower than anyone thought that was possible, then additional weak hands start to sell at that point, and then cause the BTC price to drop even lower based on the lower being able to trigger lower, even though continuously we start to believe that there are no more weak hands to shake out, but the bears keep shaking the tree over and over and over, and then pretty soon a bunch more weak hands fall out and rewarding them even more than they thought to be possible.
By the way, less than a week ago, I had already adjusted my buy orders, and one of my recent posts caused me to feel that I had to adjust them again.. My talking through my own situation caused me to realize that if I adjust one more time, I will feel even better than I had felt when I adjusted last week... so for sure, even for me, when I thought that all my buy orders were set... I made one more adjustment to make myself feel even better.. and fuck yeah, I hope that the BTC price does not go down anymore, but we also know that the trend is your friend.. and it can sometimes take a bit of time to assure that all the weak hands are shaken out.. and furthermore, I like to say fuck you to shitcoins, but even despite some of the dynamics of ethereum creating various of its own on and off ramps from fiat and not having to go through bitcoin, there still tends to be quite a bit of overlap between various value bouncing around in and out of various kinds of shitcoins that can have effects on bitcoin, as well.. so even the purgening of the froth in the shitcoin space can end up having some kinds of drags on the BTC price.. that may have to play out for a period of time before getting to a state that BTC might be able to continue to go up.. rather than having some negative pressures upon it coming from aspects of the shitcoin space, too.
I can try to scrape along searching for the bottom, selling the least BTC possible with each drop (as I luckly did today). That risks my missing the crash, and getting liquidated - or miscalculating, and getting liquidated. For this reason, I have not been eating properly, sleeping properly, taking care of myself, or taking care of other things in my life - including things that could make money! I have caught it at the edge many times - each time before, liquidating other assets and pouring them in; this time, selling BTC. Now that I am run down to selling BTC, and I would be selling each local bottom before the next drop, I would sell low every time - bleeding out piece by piece, until almost nothing is left.
This has been ongoing for months, in a downward spiral of ballooning debt and shrinking assets - worsened by desperate, "must do something" attempts to make money trading altcoins on margin (!), in a chain-reaction of "I know better than this!" mistakes that seemed necessary to fix earlier mistakes. My whole life is a wreck, and I am personally a mess - but never mind that; I am struggling to save my BTC, the important thing.
Seems that I am having some troubles relating to the extremes of this, even though I do understand that the more shit that you are involved in, then the more complicated it likely becomes.. and so in that regard, we surely are not the place to be getting into discussions about how to manage various shitcoins... it is bad enough that sometimes they do have various intertwined relations with your bitcoin holdings.
There are other guys in this thread who ended up getting out of all their shitcoins, but again, it could take a while to get out if you are nervous about selling losing positions in those various shitcoin projects, but sometimes guys do sell several shitcoins at a loss or maybe just minimize the number of shitcoins and end up having the vast majority in BTC.. that's for you to figure out, and surely, no one in this thread really wants to get into discussions about which shitcoins happen to be less shitty than other shitcoins..
That's a conversation that would piss a lot of us (including yours truly) off.
I am already getting pissed off, just thinking about shitcoins... and worse (including a budding headache - chest burning and breathing problems) to have to even consider talking about them in this thread.
In February's worst crash, a trusted friend advised me to exit at $35k with whatever BTC I could recover - just in case we dropped low enough to wipe me out. I replied that if I were to dump my BTC at $35k, and it turned out to be unnecessary, then I would kill myself. I meant that seriously; I was not just joking about it, as I am now (for the moment).
I doubt that any of us are really in a position to counsel you in emotional kinds of ways, and sometimes people can be really mean on the internet.. so I doubt that it is a good place to be talking about killing yourself, even though your user-name says that, and also you keep talking about it.. so you may well need to seek some counseling on that topic, and I doubt that many people will be helpful in an anonymous thread on the internet..
Furthermore, there are many of us (including yours truly) who really dig into harassing members more severely when they are showing emotional weakness or they are getting emotional about bitcoin related topics here.. so again, it is probably not a great place to talk about matters, if you are really in a state of emotional instability.
For sure, I am not saying that any of the matters are easy, and of course, if you can put yourself into a decent financial situation then that surely helps your psychology.. but if you are in a real big pickle it could take you many years to rebuild your financial position in order that you might start to feel psychologically confident, again (if you ever were psychologically confident).
In February, not dumping turned out to be the correct choice. Before today, I never sold even one satoshi for dollars (other than spending in normal use of Bitcoin as money).
Just because you never sold does not mean that selling might be the right move, and even if it is a matter of figuring out some ways to shave some off here or there.
In early April, I was talking to a couple about cashflow issues and there were some concerns about whether some bitcoin needed to be cashed out.. and there was a difference of opinion between them. Initially I mentioned a possible compromise to sell a bit each quarter, so that by the end of the year, there is a certain amount that is sold, and that presumed to split an amount into 4 parts and to sell that amount each quarter.. and sure the 1st quarter was already gone, but then I was told that the money needed to be available by summer.. so they were having disagreements, and so now BTC is worth nearly 35% less than it was when we had that conversation. and probably they should have sold half of the amount that they needed around that time, but instead, I believe that they sold none because they could not come to an agreement... so yeah, it is not easy, and it can surely affect people in negative ways when they are engaging in behavior that seems to rise to the level of gambling rather than investing.. or even prudently taking some money off the table if there are needs for the cash within a relatively soon timeline.
If we really go down to $25k or lower soon, the correct choice now would be to exit at $31k $30,500, dropping as I write this. Thus I would lose most of my BTC that I have held for years, to save some scraps. But I do not think that I am even psychologically capable of selling BTC, unless forced. Not selling in the bull market - and especially not selling in the bear market! I can't do it. I just can't. It is not "only money", because Bitcoin is not "only money". I've lost a lot of dollars before, laughed, and walked away - but this is Bitcoin.
That does not sound like the correct way to be thinking about matters, even though I know that there can be some rationale to make sure that you do not sell at a loss..
but there should not be that level of emotional attachment.. even though we know that sometimes it can be difficult to replace bitcoin once you sell them.. and to be able to get back the same amount that you had... but the whole matter should be weighed and balanced... rather than doing something to make your situation even worse.
Yeah, ultimately the decision is yours.. but it can surely be problematic to be too stubborn whether the right thing is to shave a bit or not could end up resulting in the wrong decision, so instead of all or nothing sometimes there may well be a need to figure out a balance that you are able to live with and accept no matter if the BTC price goes up or down from here.
And if I were to dump Bitcoin at $31k $30,500, and the bottom was already in - eh, you guessed it. ☠️
That is not right for you to be bringing up life or death issues in a forum/thread like this... you end up causing guys to be scared to talk about the substance.. so if you cannot handle presenting matters without those kinds of threats, then you might need to take your discussion somewhere else.. because it is not fair to us to have to deal with anyone saying that they are going to kill themselves or anybody else.. we should be able to talk freely, here.. and without such life and death pressures.. even if you might be really contemplating such.. it does not seem right to bring up such life/death angles on topics here..
So, bearing in mind that I am not strictly rational about BTC in the sense of "an economically rational actor", what is the least-bad choice?
There's going to be risks no matter what, and ultimately each of us has to balance ourselves with our choices.. if you are not already set up in a way that you are prepared for either direction, then your goal should be to get yourself to such a status.. even if you cannot get there right away.. and how to do it is not always clear.
mindrust myself out? As my friend argued, the difference is that mindrust was trying to save his worthless fiat shitcoins; he was at no risk, as long as 1 BTC = 1 BTC.
mindrust did not have completely bad reasons at the time, and sure he made mistakes by not buying back in, and also by selling everything.. but still I really doubt that you can assert that mindrust was a total fuck up because he thought that he was making the proper balance that worked for himself.. even though he had kind of got himself way too emotional... which in that regard there may well be some similar aspects to your case... and some of us were not really nice to mindrust.. it is not easy to be nice because opinions can get strong.. and names can be called... you ultimately have to figure out the balance for yourself and to live with your choices..
I am trying to save bitcoins, not dollars
we cannot get away from the fact that bitcoins have a dollar value that might be going down in the short term.. we do not know, but both dollars and bitcoin is relevant.. You do not remove yourself from the problem by purely suggesting that you are ONLY going to consider bitcoins as bitcoins because that really does not get you anywhere in terms of the real dilemma that you are facing.
; and I would sell the least necessary to free up whatever little bit remains. I calculate PnL in BTC, not USD.
I don't know... you likely have to figure out what are the odds from your own perspective of various price scenarios playing out, and try to be honest about it and to attempt to prepare according to those assignments.. If you lie to yourself about various scenarios, and they end up playing out. then surely you will suffer more from that kind of lack of preparations.
Though having dollars is nice, because it means I can look for a good opportunity to cash out to BTC. Anyway, this option potentially carries a very expensive cost externality, as aforesaid; but I do consider all options, even the ones I immediately reject.
Maybe you are not supplying enough facts?
You should be able to calculate the dollars and the BTC that you would have at various price points, whether looking at the price going up or the price going down... so if you never want to have zero BTC no matter what, but you know that if the price goes down to certain price points such as $25k or $20k, then you would end up with zero BTC, then you may have to calculate the ways to best preserve even under relatively extreme scenarios...
Don't get me wrong. I am not suggesting to put more than 1% of value into scenarios that you consider to be 1%, but sometimes you have to be careful too.. regarding getting your assignments wrong, and then the price ends up going there and you have zero preparations for 1% scenarios.. So sometimes (or maybe frequently) you have to try to make these preparations in advance. So of course, if you had not adequately prepared (like that seems to be your current situation), then your options become way less than if you had adequately prepared.. .. so yeah, you already know that you cannot go back, but you have to deal with where you are at and attempting to prepare yourself for any scenarios that could happen from here.. rather than projecting some kind of fantasyland scenario and then projecting from that place.. because then you end up gambling and ONLY being prepared for one direction rather than being prepared for both (or either).
Keep scraping along, searching for the bottom? I can currently survive down to about $29,200; with some income that I expect soon, I could push that a bit below $29k a few days from now. For every $1k drop below that, I will need to sell off a larger and larger proportion of my BTC - that is, if I catch it before the liquidator bot. But if the bottom is already in - or even if it is almost in (say, if the bottom is $28,500) - then scraping along saves BTC, just as I saved >1 BTC today by selling 0.5 BTC.
That sounds like crazy.. and stressful.
Remember the expression.. a failure to plan is a plan to fail..
so it seems to me that you gotta try to get in front of your matters a bit better than you are (or you have been)..
and of course, there would be costs involved when you get in front of matters.
Also, should I absolutely stop pouring any more assets into this account? It is a money-eating, asset-eating sinkhole - as an "economically rational actor" would have recognized long ago. The incoming money that could be used to push down my liquidation price by a hair, could also be used to buy BTC (whether now - or later during a bull run, because "incoming money" is an airdrop of an altcoin that's down much worse than BTC). But if spending it on BTC safely in my wallet causes liquidation of that account, it would be the most expensive BTC purchase ever!
I don't feel equipped to answer that kind of a question... .or to be adequately able to weigh the trade offs..
surely some trade offs are financial and some are psychological..
I emphasize again that there are no right answers in this wrong situation. There are only dilemmas, educated guesses, and attempts to pick the least-bad option.
I don't know if there is a least bad option.... like as if you are trying to pick the best option.. .. sometimes, there could be ways to incrementally make some sales if the price goes up in order to take some risk off the table, even if you do not take all of the risk off the table.
I remember one time, I had expenses coming in and I had to sell towards the bottom, so I ended up shaving something like 0.5% extra of my BTC holdings, but I did it on price rises and it was less painful... I believe that I only ended up getting about 1/2 or maybe 1/3 of that back by the time I wrote it off as a loss...
My point is that sometimes you can make some incremental adjustments to help to lessen some of the risk that you are in, even if you might not remove all of the risk that you are in.. but you could cut it down a bit..
If you would be so kind as to bounce around some ideas, I will be thankful - and I may or may not do whatever you suggest. Either way, I will not blame you for the results of my own decisions, or for unheeded suggestions made in good faith (= with intent to maximize BTC, not maximize dollars) - just as I didn't blame my friend for urging me to dump and get out at $35k in February, even though it turned out to be unnecessary, and we visited $47k just over a month later. And the posing of questions in a conversational way does not preclude the offering of other thoughts.
Sure. sometimes you are going to be upset either way, but you still take some action to help the situation to maybe prepare yourself from a bad scenario that ends up not happening. I have done that too... I made a decision to sell a few BTC at various increments towards the bottom to prepare for further bottom. and the price ended up going up and never coming back down ever again.. but my decision to shave some extra off did provide me some downside insurance, even though I ended up with fewer BTC and I did not end up using the insurance.
[Edited to fix a thought that got logically disconnected in the writing process, due the second-order effects of being glued to the chart without adequately eating or sleeping.]
yes. get to a certain comfortable place (at least temporarily) and then take a nap and eat a bit... or the other way around..
Poll
