Understanding corrections and why not to panic.

[bstewart]

So you meant to say next jump will be $25k

I also have a strong feeling that bitcoin will reach $25k price, maybe next two months we will see the price  starting to  go up again heading $25k  as what some people predicted.

And when bitcoin starts to go back up, there will be a TON of newbie investors who will be chasing the hell out of it. FOMO will be just as big as the panic that we are currently witnessing.

[tehMoonwalker]

Ok, so for me as a huge blockchain enthusiast, nothing annoys me more than seeing all this FUD from new members or traders.
I've tried to demonstrate through a simple ms paint picture, taking an example of another correction to explain.



Now as we can see, between Nov 20 2016 and Jan 05 2017, we had a 62% increase in about 3 and a bit weeks, to a lot of investors this is worth cashing out over, great returns!
The value then dropped around 34% from $1170 to $767 on the 12th of Jan 17, it then took till the 22nd of Feb to return to this value of $1170, around 5 weeks! this is the period where panicked people continue to sell due to the dip.

Now from the $767 price at the dip in Jan, it took around 3 months to hit a new high around $1250 with around 62% increase, this is more sustainable than the earlier rise of 61% in 3 weeks.. so what do we see? of course another correction but a much shorter one, why? the period of growth was slower, more sustained so the incentive to cash out is lower compared to 61% in 3 weeks.

Now if we look what has happened recently, Bitcoin went from $6000 in mid November 2017 to $18,000 in mid December 2017, this is a 200% increase in 1 month!
So what happens? once again people see a chance for a huge profit and cash out.

Now $18,000 to $10,000 is a 44% drop, after 200% in 1 month is this really surprising? not at all..
Based on what we've seen, the recent jump will cause a larger than normal correction, this is what we're seeing now.

I can't tell you how long this correction will last but my gut says it'll go a bit longer, am I in a panic? no way, everything's on sale!

I hope this brings a bit of calm to some, I've used BTC as an example but the same concept applies to all coins and the entire market value.

post of the day! thank you!

100% agree

[Mobshady24]

These panic attacks from newbies are getting into my nerves, like they influence other people with their not so relevant thoughts regarding this big correction happening. Kudos to the OP, really a great explanation for people that doesn't really know how prices of bitcoin and alts works, tbh, this is just a simple math, i don't know what's alarming on this 
just keep holding guys and later on you'll say thanks to people that keeps on saying that it's not the end.

[francojon]

I think this is just a cycle of FOMO and FUD, most people buy into these coins when the FOMO set in and start selling when the level of FUD is high, like the way it is now, when they said the patient dog eat the fattest bone, I was tell one of my friends not to buy BTC when it was going towards $20k, and wait for under $10k to buy, today it is below $10k, one need to master the space with to me is a combinations science and art to make it big in the space

Perhaps not as much a question of FOMO and FUD as a simple evolution of a market that is at the moment very promising but it is also facing many regulatory and technical challenges. Also, there is obviously an psichological effect when the market rises fast. Many people that got into the market in the dips have already realised their economic objectives and simply cash out. That is particularly true if the climbs are steep.

[TalkToomuch]

that's a very good analysis. I also think this is a strong but healthy correction, preparing the entire crypto market to move to all time highs again

Ok, so for me as a huge blockchain enthusiast, nothing annoys me more than seeing all this FUD from new members or traders.
I've tried to demonstrate through a simple ms paint picture, taking an example of another correction to explain.

https://i.imgur.com/EW8CbV1.png

Now as we can see, between Nov 20 2016 and Jan 05 2017, we had a 62% increase in about 3 and a bit weeks, to a lot of investors this is worth cashing out over, great returns!
The value then dropped around 34% from $1170 to $767 on the 12th of Jan 17, it then took till the 22nd of Feb to return to this value of $1170, around 5 weeks! this is the period where panicked people continue to sell due to the dip.

Now from the $767 price at the dip in Jan, it took around 3 months to hit a new high around $1250 with around 62% increase, this is more sustainable than the earlier rise of 61% in 3 weeks.. so what do we see? of course another correction but a much shorter one, why? the period of growth was slower, more sustained so the incentive to cash out is lower compared to 61% in 3 weeks.

Now if we look what has happened recently, Bitcoin went from $6000 in mid November 2017 to $18,000 in mid December 2017, this is a 200% increase in 1 month!
So what happens? once again people see a chance for a huge profit and cash out.

Now $18,000 to $10,000 is a 44% drop, after 200% in 1 month is this really surprising? not at all..
Based on what we've seen, the recent jump will cause a larger than normal correction, this is what we're seeing now.

I can't tell you how long this correction will last but my gut says it'll go a bit longer, am I in a panic? no way, everything's on sale!

I hope this brings a bit of calm to some, I've used BTC as an example but the same concept applies to all coins and the entire market value.

[aintnopassincraze]

Well said mate, I was a bit unhappy when I saw the markets earlier today but I reminded myself it is a part of the process and that if Bitcoin hadn't gone up so high so quickly that this wouldn't be occuring. It is all about perspective, thanks for aiding us with that picture.

[JetSet11]

Thanks for pointing this out. I think that this years correction is a bit longer and deeper, but that the results will be similar nonetheless. Fill your bags while you can.

[entrepmind23]

That's a great explanation right there OP! If there is an organic growth wherein the growth in price is not that fast then the correction should not have been as fast as it is right now or it may not cause a lot of panic selling. Due to the entrance of a lot of people into crypto world in the past months who panic buy because they don't want to be left out without even knowing what the real purpose of bitcoin is or what is blockchain technology, nowadays they panic sell because they just can't comprehend that they are down now by 20-50% so as a result, they tremble with just a negative rumor or news causing a snowball effect.

Sooner or later, the market will reverse and then there would be a FOMO again causing a meteoric rise. I hope though that it would be an organic growth this time but in crypto world, when a coin gets attention, it would just have a meteoric rise again.

[Golftech]

Thank you for taking some time to post this OP, I think most of us needs some lifting thread / article so we won't do any mistakes while seeing the downfall, reviewing the trend and the movements of bitcoin together with other cryptocurrency then newbies will be learn to hold, I would like to
thank you personally for giving some heads up better to read and understand what is the corrections and what we should do while we are seeing such
events to protect our investment. Keep it up.

[Kinieter]

pullback happen tho, good explanation

for me, im rebuying this discount , has cashed out eth , its shopping time

[Kingofbitcoin12345]

Good job on making some effort in your way explaining this information for the new investors to finally settle down from many weeks of nightmare and fear.. This would also help counter the fud circulating even here in the forum from obvious new accounts and promotional accounts from other currencies.. I’d rather be holding until the last breath than listen to those and ignoring them is the best possible option that I can manage..

[Tanhdoit]

Thanks OP for making the graph. I started investing in crypto during the July 2017 drop from $3k down to $1600. After looking at your graph and seeing the corrections visually we are definitely just going through another cycle. Nothing going up from $5k to $20k so quickly from a span of 1 month will go up forever and I guess here we are.... I just wish I made the smarter decision and sold when I knew it was too good to be true. The FOMO was so real near the end of DEC leading into the new year. I'll HODL because the technology itself is at least worth $4 trillion

[Apekool]

So you meant to say next jump will be $25k

I also have a strong feeling that bitcoin will reach $25k price, maybe next two months we will see the price  starting to  go up again heading $25k  as what some people predicted.

rofl why?

[cdv10]

Do you think that this will repeat again with the network current status? I guess maybe lightning network could save it.

[@bolodupak]

Correction is important thing for crypto, you dont need panic because if u believe to hold, you will get what do u need.

[Red.]

My dear friend,

He has not give buy or sell advise. the OP is simply trying to explain what a market correction is, what a support looks like and what a spike looks like, with some lessons from history. History is a thing you know, its not just rumor; based on facts about events.

Now coming to your strong statement -

Will you compensate the people if they lose everything what they have invested by holding the wothless crypto by your useless suggestion?

will you compensate them if they sell based on your opinion, and the price does indeed rise?


Please dont make personal attacks. Again OP did not give buy or sell advise.

God bless us all.

[zombies]

My dear friend,

He has not give buy or sell advise. the OP is simply trying to explain what a market correction is, what a support looks like and what a spike looks like, with some lessons from history. History is a thing you know, its not just rumor; based on facts about events.

Now coming to your strong statement -

Will you compensate the people if they lose everything what they have invested by holding the wothless crypto by your useless suggestion?

will you compensate them if they sell based on your opinion, and the price does indeed rise?


Please dont make personal attacks. Again OP did not give buy or sell advise.

God bless us all.

Yes, I will compensate if he is ready to accept my challenge.

[kodtycoon]

The OP is right about the speculation and well the 8K is right and it will slide a little more, but it's not the same cause I dont scold the stomach to think and well I guess it will be between 7K-8K is not meant to make people panic but this is a trace of my opinion, which I must say perfect and thank you for sharing the explanation thoroughly.

[Shtamm_oval]

People tend to be wrong and panic will give way, this can not be avoided. Therefore, your fabrications are correct, but everyone has already decided for himself how to act on such difficult days.

[Greendays]

too think the correction will last long. I analyse the trend flow from long.. and Usd 10000 was setted a resistence point and i was sure that this resistence point will be tested many time in upcoming days... even 2-3months.. this resistence point will be tested..
The other external factors has now nullifies the resistence and new resistence point can be 8000 then 6300 dollar.. and with more similar downtrend increase risk of fear between investors.. which can led to the next resistence point of 3000...
Though, in all the one thing that can be realise that the sudden hype may not be possible till next many weeks or few months.. only by analysing previous trends.. but anything can be possible with bitcoin.