In a mid-March 2024 Barchart article, I wrote:
In all markets, trends are your best friends until they bend. However, bulls and bears using discipline and plans for trading and investing tend to achieve long-term success, while ignoring risks can lead to financial disaster. While there are many stories of fantastic riches in the crypto asset class over the past years, there have also been devasting losses. The music continues to blast in cryptos, but when it stops and prices correct lower, latecomers could be left holding costly tokens with massive mark-to-market losses. Be careful in cryptos, as the most significant threat will come from government regulations and potential bans if the market cap continues to rise. Governments will not give up control of the money supply without a fight.
Like any investment or trade, careful attention to risk-reward dynamics is critical. More volatile assets require significant discipline. When it comes to volatility, Bitcoin and cryptos have displayed unprecedented price variance, which is not likely to end any time soon. Meanwhile, over the past weeks in Q1 2024, this week’s lows in Bitcoin continue to be last week’s highs.
