The latest wisdom of the day from true believer Naeem Aslam is Ignore a 20% to 30% drop in bitcoin because the longer trend is up
If you dive into the article Aslam states "If the price drops by 70% now, it only will be touching its 200-day moving average, which is near $4,473. "
Apparently, one should ignore a 70% plunge as well. Then what?
Suppose you were one of those who bought at $18,000 or so. You would be down about 75%.
OK no problem. Since "the trend is up" so you buy on the moving average. Or simply keep buying down. You get a nice bounce off the moving average and you load the boat as any true believer in JDSU would tell you to do. Excuse me, I meant to say Enron, no I meant Bitcoin. Sorry for the confusion.
Now let's suppose the bounce dies. It goes back to the moving average. Are you getting a little nervous or not?
Aslam supposedly won't be. The trend is still up. Then something unexpected happens: The trend breaks and Bitcoin falls to $2000.
This is entirely hypothetical of course. Yet, the trend will break at some point. So here you are, you had a brief profit on the buy at $18,000 you bought more and more on the way down. You had a profit on that too. Then the trend broke.
Will you sell? Will true believers ever tell you to sell?
I can tell you in advance what they will tell you: "It's too late to sell".
Mike "Mish" Shedlock