I know many people are calling for market manipulation. But here are some facts that apply to every all-time-high (ATH) we have had in the last few years. As soon as there is price action going up, many people on the sidelines FOMO and buy trying to get rich fast.
The image above is a snapshot of the google trends for “buy bitcoin” and the price history of bitcoin.
These are the facts:
- Majority of people who bought in dec/jan don’t even understand what bitcoin is
- Majority of people who bought in dec/jan bought to “get rich quick”
- Majority of people who bought in dec/jan don’t believe in bitcoin
- Bitcoin goes down = Everything else goes down
This selloff is the result of these people being shaken out.
Now i’m not saying you should hodl through all the dips. A Risk/Profit taking strategy is necessary so that you dont end up with a -70% or more loss.
Check out my risk/profit strategy and why hodling is not always the best idea.
I feel like many people need to start reading more about what they are investing in, so that they see how much impact many projects will have on the global economy, logistics and workforce.
Instead of panicking right now because everything is crashing, try and learn about the projects that you bought. Read the whitepapers, test the applications that are being created and give the devs some feedback.
Learn about basic technical analysis (ema, ichimoku, rsi…) and what market cycles are.
This will definitely help you in the next bull run to understand how you can invest smartly and not buy into every project that is hyped and overbought.
Another example with Ethereum:
When a coin is being hyped through the media, then all the people that wouldn’t normaly be interested in blockchain are jumping onto the wagon.
They just want to get rich. That’s why their are constantly “When moon?” posts on facebook.
How to use Google trends for Investing?
When you want to invest in a new project, think about the reasons why. How did you hear about? Was it some youtuber guru talking about a project, or did you find it through your own research. Check out the google trends of a coin by searching the project’s name.
Now hopefully you will realise that if a coin is overhyped, people will fomo into is and just buy. Not you! You will be smart and wait for the dip. There is always a dip.
There is another tool for checking social trends and that is solume.io. Very useful, but I still prefer to check the trends manually when investinginto new projects.