Stepping in here, because this translates to a significant probability that I will lose almost all of my BTC:
I doubt that we are even close to max pain...
bears are going to push the BTC price down as low as they can and hold it there as long as they can.
Other than "buy a time machine, go back, and bat-slap myself a few months ago", do you have any suggestions for someone who fell into a
margin debt trap? There are no right answers in this all-wrong situation, but I want to pick your brain.
If I had been willing to "cash out" (I hate that term), I could have exited this position at $47k-48k last month, and walked away with more BTC than I started with. I didn't do that, because selling BTC is unthinkable.
Instead, for much of the past week, I was liquidating other assets and pouring proceeds into the distressed account. I drew the "no more!" line on Sunday, because I could lose absolutely everything this way. To begin with, most of my liquid or liquidatable assets were in BTC - now trapped as collateral in the account that first ate all of my BTC as I added collateral to avoid losing BTC, and then has been eating everything else, too. Other things elsewhere are safe, but mostly gone already. I am good at hunkering down and waiting out bear markets, as long as I am not at liquidation risk!
So for example, max pain could be going down to the 200-week moving average or even going below that and maybe staying there for a certain amount of time... sure it does not seem plausible.. but for sure manipulators shoot to achieve the implausible and to sustain it for as long as they are able.. and we know that the 200-week moving average is currently at about $21,750.
In essence, we can try to give probabilities of what max pain might be.. and for sure that is not going to be easy.. including that even seemingly low probability events could end up happening.... and for sure many guys will continue to buy. all the way down.. and for sure I would need to reassess my cashflow if we were to go below $25k..
If we go down to $25k (never mind lower), I lack sufficient assets to avoid selling most of my BTC - or worse, having it sold for me in a huge market-dump into a red candlestick, with a penalty.
I can try to scrape along searching for the bottom, selling the least BTC possible with each drop (as I luckly did today). That risks my missing the crash, and getting liquidated - or miscalculating, and getting liquidated. For this reason, I have not been eating properly, sleeping properly, taking care of myself, or taking care of other things in my life - including things that could make money! I have caught it at the edge many times - each time before, liquidating other assets and pouring them in; this time, selling BTC. Now that I am run down to selling BTC, and I would be selling each local bottom before the next drop, I would sell low every time - bleeding out piece by piece, until almost nothing is left.
This has been ongoing for months, in a downward spiral of ballooning debt and shrinking assets - worsened by desperate, "must do something" attempts to make money trading altcoins on margin (!), in a chain-reaction of "I know better than this!" mistakes that seemed necessary to fix earlier mistakes. My whole life is a wreck, and I am personally a mess - but never mind that; I am struggling to save my BTC, the important thing.
In February's worst crash, a trusted friend advised me to exit at $35k with whatever BTC I could recover - just in case we dropped low enough to wipe me out. I replied that if I were to dump my BTC at $35k, and it turned out to be
unnecessary, then I would kill myself. I meant that seriously; I was not just joking about it, as I am now (for the moment). In February,
not dumping turned out to be the correct choice.
Before today, I never sold even one satoshi for dollars (other than spending in normal use of Bitcoin as money).If we really go down to $25k or lower
soon, the correct choice
now would be to exit at
$31k $30,500, dropping as I write this. Thus I would lose most of my BTC that I have held for years, to save some scraps. But I do not think that I am even psychologically capable of selling BTC, unless forced. Not selling in the bull market - and especially not selling in the bear market! I can't do it. I just can't. It is not "only money", because Bitcoin is not "only money". I've lost a lot of dollars before, laughed, and walked away - but this is Bitcoin.
And if I were to dump Bitcoin at
$31k $30,500, and the bottom was already in - eh, you guessed it. ☠️
So, bearing in mind that I am not strictly rational about BTC in the sense of "an economically rational actor",
what is the least-bad choice?mindrust myself out? As my friend argued, the difference is that mindrust was trying to save his worthless fiat shitcoins; he was at no risk, as long as 1 BTC = 1 BTC. I am trying to save bitcoins, not dollars; and I would sell the least necessary to free up whatever little bit remains. I calculate PnL in BTC, not USD. Though having dollars is nice, because it means I can look for a good opportunity to cash out to BTC. Anyway, this option potentially carries a
very expensive cost externality, as aforesaid; but I do consider all options, even the ones I immediately reject.
Keep scraping along, searching for the bottom? I can currently survive down to about $29,200; with some income that I expect soon, I
could push that a bit below $29k a few days from now. For every $1k drop below that, I will need to sell off a larger and larger proportion of my BTC - that is, if I catch it before the liquidator bot. But if the bottom is already in - or even if it is
almost in (say, if the bottom is $28,500) - then scraping along saves BTC, just as I saved >1 BTC today by selling 0.5 BTC.
Also, should I
absolutely stop pouring any more assets into this account? It is a money-eating, asset-eating sinkhole - as an "economically rational actor" would have recognized long ago. The incoming money that could be used to push down my liquidation price by a hair, could also be used to buy BTC (whether now - or later during a bull run, because "incoming money" is an airdrop of an altcoin that's down much worse than BTC). But if spending it on BTC safely in my wallet causes liquidation of that account, it would be the most expensive BTC purchase ever!
I emphasize again that
there are no right answers in this wrong situation. There are only dilemmas, educated guesses, and attempts to pick the least-bad option.
If you would be so kind as to bounce around some ideas, I will be thankful - and I may or may not do whatever you suggest. Either way, I will not blame you for the results of my own decisions, or for unheeded suggestions made in good faith (= with intent to maximize BTC, not maximize dollars) - just as I didn't blame my friend for urging me to dump and get out at $35k in February, even though it turned out to be unnecessary, and we visited $47k just over a month later. And the posing of questions in a conversational way does not preclude the offering of other thoughts.
[Edited to fix a thought that got logically disconnected in the writing process, due the second-order effects of being glued to the chart without adequately eating or sleeping.]
