At any point in time, there is a 50/50 chance of the pricing going up or down. You need to be positioned accordingly.
The chance is not 50/50. For example, Murphy's Law, which is infinitely more reliable than PlanB, stipulates that the moment after I drop a large proportion of my BTC without being forced by imminent liquidation, BTC will suddenly rocket off to six digits.
(But what does Murphy say about the chances if I don't?)Can you sell half of your position? It might help you sleep better if there is no chance of a total wipeout.
Thanks for the suggestion. Sleeping better is not my primary goal: Salvaging as much BTC as I can is my primary goal (now tempered by "no more dumping other assets into this account!"), even at the expense of sleep, health, sanity, and everything else that I have been sacrificing for months because of this. Anyway, I just crunched some numbers for a back-of-the-envelope estimate of something that changes as the BTC price fluctuates.
At $30,600 (the approximate ticker price when I saw your post, and started spitballing various scenarios), I would need to sell about 61% of my BTC to get my liquidation price down to the current 200 WMA. That is still not "no chance of a total wipeout", because (a) in the past, it has often wicked below 200 WMA when it bottoms, and (b) 200 WMA is not guaranteed, anyway.
I would need to sell
at least 65%-70% to get myself to a level that could be considered pretty much more or less "safe" - excluding flash-crashes, such as the March 2020 Covid crash, when it did the proportionate equivalent of very briefly dropping to about $12k now.
No matter what level is considered "safe", it must account for the wicks - such as the very brief drop below $30k that almost got me liquidated yesterday.
To me it appears that Heater has given you the most fundamental and soundest of advices.. and you choose to completely ignore it instead of attempting to deal with reality.
Let me see if I can explain a bit further.
If our current price is $30.3k, and if we are in a bull market, then the odds of breaking up are greater than the odds of breaking down.. but then there is still a matter of degree.
To me it seems that after we have gone below the 100-week moving average (which is at $35k) and we have now been there for more than 4 days.. we have transitioned into a bear market... so the odds are greater to break down than up... but still how far we break down is not exactly known in advance, either.
Even if you have your doubts about whether we are in a bear market and you believe that we are in a bull market.. you still are not going to get much higher than 50/50 odds in terms of breaking up instead of down. I will throw out some numbers, and for sure you do not have to agree with them because you can assign your own numbers, but still in the end, you should be attempting to allocate your portfolio in such a way that mirrors your view of the probabilities rather than completely ignoring scenarios that you do not like - because otherwise you would be gambling rather than investing (or playing a roulette wheel)..
So consider the below assigned percentages as possible Downity scenario peaks from where we are at currently and where the bottom would happen.. and at this time, I am going to ascribe our down odds at about 53% right now.. even though I am just stabbing in the dark really... But in the end, all my assignments of probability numbers (even though somewhat out of my ass) on the way down add up to 53%
Anyhow, here's a possible assignment of where the bottom might occur from here $30.3k-ish as I type.
above $29k - most timid of bearish scenarios - about 9% odds
$27.5k to $29k - plausible bearish - about 12.5% odds
$25k to $27.5k - could happen bearish - about 13.5% odds
$22.5k to $25k - pretty severe bearish - about 7.5% odds
$20k to $22.5k - worser case bearish - about 5.5% odds
$17.5k to $20k - a bit of a stretch bearish - about 2.5% odds
$13k to $17.5k - overly bearish - about 1.5% odds
$10k to $13k - way overly bearish - about 0.5% odds
below $10k - not very likely but possible - less than 0.5% odds
By the way I hate to go too far over 50% in terms of my assignment of bearishness even though it feels that we have ongoing downity momentum for now, and I have not really figured out exactly what kind of UPpity would cause us to get out of our current transition into a bear market.. for sure getting above the 100-week moving average would likely be helpful.. and maybe doing so by more than 10% might be something that might be plausible or just staying above such 100-week moving average for a week or longer might be enough? I have not figured it out in my own head, yet.. regarding what level of UP I would need to suggest that the bear market is done or that we are back in a bull market... for sure, there is a bit of a lagging indicator aspect to those kinds of bear/bull market assessments, too.
As I said in some earlier post, at $47k last month, I could have walked away clean with more BTC than I started with; but now, no matter what I do, I will lose most of my long-held holdings if yesterday was not the bottom, or at worst close to the bottom.
You still should be attempting to deal with the reality of where you believe the price might go and to set yourself up so that you are prepared for those possibilities. If you are ONLY betting that the price will go up, you likely have a 50/50 chance of losing that.. and so if you are prepared for various levels of down scenarios in advance, then you have a plan to account for those down scenarios, even if you may well assign the probability numbers differently. For sure, not everyone is going to assign probabilities the same, but if you treat everything below $29k as if they were zero chances, you seem to have pretty decent chances of getting recked.. and my above chart shows below $29k as having 41% chances of happening (if you add all the numbers up)... and yeah, I might not be correct, but just trying to assign some kind of framework to attempt to help to snap you (and others perhaps) back into reality that the numbers for down are not zero.. merely because we have already seen prices as low as $29k which would be 58% down from our $69k top.
You seem to be on margin in btc.
No. I would
never do something so stupid as to take a leveraged long on a highly volatile asset.
Instead, I shorted the dollar at high leverage. The dollar's fundamentals are wretchedly bad. In the long term, it is practically guaranteed to depreciate severely. Shorting the dollar is smart - at least in theory.
The problem is that "the market can stay irrational longer than you can stay solvent", and the dollar is now in a bull-run bubble.
I don't typically short anything. FAANG looked like a short, but still I hesitated.
Well..i can now buy 30-50% MORE FAANG for my cash if i want to, but i won't.
When you took margin longs 20 years ago as you previously described, you were shorting the dollar as priced in semi-fungible tokens called "stocks".
People need to flip their thinking about BTC. "Selling" BTC means buying dollars - going long on the dollar, and doing it for cash if you are not using margin. "Buying" BTC means selling dollars - taking a
short position against the dollar, even if you are not using margin to short. Shorting BTC means taking a leveraged long on the dollar. And taking a leveraged long position on BTC is short-selling the dollar on margin: Borrowing an asset that is expected to depreciate, and selling it for money.
Related in concept, but not directed at you:
People are way too stuck in thinking about dollars as "money", and everything else as "assets priced in money (= dollars)".
It was quite the spectacle when I tried to explain some concepts to a newbie by putting them in familiar terms, based on his own experience.
I told him that when he took a home purchase mortgage loan, he was shorting the dollar as priced in a non-fungible token called a "house". If the dollar rises too much, as priced in units of his house, then the lender reserves the right to call the loan due immediately, among other remedies; this is logically similar to a margin call. And indeed, all home purchase mortgages contain such terms in the fine print - although they are rarely invoked because the dollar/house market has low volatility, and dollars rarely appreciate as priced in houses. Anyway, the expense and other overhead of foreclosures
usually helps to deter lenders from being overly aggressive in foreclosing unless necessary. By contrast, as I pointed out earlier, exchanges have a perverse incentive to stack the deck to create
more cryptocurrency "foreclosures" (liquidations).
He didn't get it.
If he had understood that, then perhaps he would have been able to "get" Bitcoin. (And he would have understood why he should avoid both cryptocurrency margin accounts, and home purchase mortgages!)
Yes, I explained earlier how I got myself into such a predicament when I know all this - "I know better than that..."Fuck that nonsense.
You seem to be lecturing Biodom, but you seem to be the one who is in a pickle and having some issues about how you are managing your risk...
Nothing wrong with accumulating bitcoin, but you also need to manage your risk too..
