- Passionate Income
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- Bitcoin Flirts w/All-time High
1,098 Words | 4 Min 37 Sec Read
Welcome to another issue of Passionate Income.
Today we’ll be discussing Bitcoin's recent price action.
In particular, how after seven months of painfully boring sideways price movements, we may finally be entering into an "Easy Mode" bull market.
Let’s dive in.
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***Warning: This newsletter does not contain financial advice, and is intended for entertainment purposes only. We are not Financial Advisors and we are definitely not your Financial Advisor. Crypto is a high risk and highly volatile asset class. Invest at your own risk.***
As mentioned in our last crypto episode, we usually only do these about once every eight weeks.
But with the crypto market heating up - and Bitcoin climbing a whopping 15% since our last issue on September 20th (you did take advantage right?) - we will be publishing these more often starting now until the end of the bull market.
So here’s the deal:
Over the last few days, Bitcoin has broken through multiple resistance levels it had been struggling to overcome since March.
If you recall from previous issues, BTC roared to life starting in October 2023.
After a nearly two-year downtrend, this rapid upward movement captured the attention of many people (like myself) who were active in 2021 and 2022, but stopped paying attention during the bear market.
Unfortunately, Bitcoin topped out in March and then fell, dropping from over $73,000 to its lowest point of around $49,000 in July.
Since then, the entire crypto industry has been on pins and needles, trying to figure out if Bitcoin would climb any higher this year or just roll over and die.*
Fortunately, after months of indecision, the market made a resounding move to the upside, leading industry veterans to proclaim we're in Round 1 of a true crypto "bull market."
Which raises the question: What should you do now?
To answer this, the first question you need to ask yourself is how much time you’re willing to dedicate to this.
For 95% of people, the answer is probably "none."
If that’s you, you may want to take the approach passive stock market investors take: Dollar-Cost Average into the largest and most well-known assets (similar to dollar-cost averaging into the S&P 500).
Even better, unlike the previous bull market, there are now authorized and approved crypto ETFs you can hold in your traditional brokerage account.
And because of that, you no longer have to move funds onto a crypto exchange to invest (which was a massive hurdle for people in previous cycles).
In addition, you can also buy crypto with apps like Robinhood, Moonshot, and the well-known financial services platform PayPal.
If you take the hands-off, dollar-cost average approach, understand crypto is a much more volatile asset class compared to stocks.
I mention that because, unlike the passive investing you do in your retirement account, crypto is not the type of asset you hold for years or decades at a time.
Instead, you should expect to stay invested for the next 6 to 12 months before fully exiting. Why?
Because after a big run-up, Bitcoin is known to drop up to 80% while smaller "alt coins" can drop anywhere from 95-99%.
Meaning, if you don’t get out somewhere near the top, you could not only lose all the profit you’ve made, but potentially lose your upfront investment as well (or a large portion of it).
If you’re one of the small number of people who can dedicate a substantial amount of time to crypto, you’ll want to begin educating yourself on how the industry works as much as possible.
From DeFi wallets to meme coin trading, crypto can be brutally punishing if you start throwing your funds around without understanding what you're doing.
In terms of resources, YouTube is the best place for educational content, while X/Twitter is the best place for real-time updates and market commentary.
Additionally, there are a near-infinite number of Telegram groups led by industry influencers (as well as a host of scammers and grifters).
So if you go down these rabbit holes, make sure you educate yourself on security best practices and how to protect your funds.
In terms of what segments of the market you’ll want to pay attention to, that one is easy: AI and memes.
If you know anything about crypto, you know previous bull runs all had their own unique narrative.
In 2020, it was decentralized finance.
In 2021, it was NFTs.
And with Nvidia dominating the stock market—and AI dominating the tech industry—it should come as no surprise AI is a hot crypto narrative this year.
As for memes, we don’t have the time or space to go into why they're so hot this cycle.
The short version, however, is that memes are a middle finger to the extractive venture capitalists who took advantage of everyday investors in 2021 (and have attempted to take advantage of them again this cycle).
Not to mention, memes are the social currency of the internet, with some circulating / being rehashed years or even decades after their first appearance on the web.
So, if you’re going to invest beyond the big dogs like Bitcoin and Ethereum, make sure you start by learning about popular meme and AI tokens.
In terms of why you should consider getting involved now, it’s likely we are entering the final phase of the bull market.
And while it's true you've missed out on opportunities by not being involved over the last 18 months, a common saying in the crypto industry is that:
“80% of the profit is made during the blow-off top phase of the cycle.”
In fact, with Bitcoin finally getting close to breaking it's previous All-time High, we are officially entering into the Optimism phase you see in the image above.
More important, the Optimism phase leads to a short - but explosive - upward movement before things come crashing back down in the Anxiety phase.
And for better or worse, if Bitcoin breaks through its March 2024 all-time high—which it may very well do before you receive this issue—that will serve as official confirmation we are in the final blow-off top phase of this cycle.*
*And if it happens later this week, next week or next month, it doesn't matter. All we need is for Bitcoin to breakthrough $74,000 to confirm we are about to enter into the infamous "blowoff top."
Because of that, there is still plenty of profit to be made. But the longer you wait, the less opportunity you'll have.
So, if you plan to take action on crypto, the time to act is now.
💡 Takeaway: After 7+ months of uncertain price action, Bitcoin is within inches of setting a new all-time high. More important, a confirmed breakout has the potential to send crypto prices much, much higher.
🎁 Resources:
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