Wednesday's Market Minute: Dear Bitcoiners: Don't Let Your Brain Turn To MUD

I can’t think of a single major crypto visionary/thought leader who warned their followers of the timing, speed, or magnitude of this month’s bitcoin crash. Everyone in the community has been steadfast in their agreement that bitcoin was predestined to hit $100,000 before any "correction." So how, in the wake of a 50% sell-off that nobody predicted, is the entire crypto community now saying it’s totally normal, and part of the plan? How can so few market participants reassess their expectations after their so-called “reserve asset” blindsides them with a surprise price-halving? The answer is simple: because these people are fanatics. Sorry if it sounds harsh, but it's true, and the occasion demands some brutal honesty.

I wrote on April 7 that bitcoin’s mythos was unraveling; on April 14 that bitcoin’s narrative had never been more broken. The day bitcoin broke out to $65,000, I cautioned viewers of Market on Close not to chase the breakout, because it was the first time it was ever happening on slowing momentum, and the chart actually looked weak. When it broke below $55,000 and confirmed the bearish pattern I was watching, I highlighted $30,000 as a fair target. I was roundly mocked by coiners, and the comments on my Twitter were pure insanity. All good, business as usual.

Bitcoin zealots live in a dreamland where every analysis that doesn’t align perfectly with their preconceptions is tossed out as “FUD” – Fear, Uncertainty and Doubt – the acronym the community uses to discredit journalists, mostly, who dare question their religion. Was it FUD when, in the same editorial of October last year, I described bitcoin’s setup as the most bullish I’d seen it? Or when I explained the logic for why I was buying bitcoin when it broke $20,000?

Let me introduce a new acronym: MUD – Maniacal Unwavering Devotion. If you feel like you’re repeating the same baseless catchphrases over and over again –digital gold! – you’re probably stuck in MUD. If you’re a bitcoiner with blind faith in your idols who are telling you this drop was just like the rest, you likely suffer from MUD. The data doesn’t support it. The latest bitcoin highs happened on declining RSIs for the first time ever, and with the lowest 30-day change at a record in history. It didn’t drop because prices went up too fast, it dropped because it ran out of buyers at that level.

The good news is it’s not too late to get unstuck from MUD! You can think independently, and you don’t have to HODL during crashes. Your family will still love you, and there’s a whole other world of objective people waiting to embrace you. We look at bitcoin like anything else: lines on a chart. No sacred texts, no laser eyes, and no lies. Just numbers, trends and facts. It was just weeks ago crypto pitchmen on cable TV told you bitcoin was growing up and calming down. Fast-forward, and it just finished the most streak since 2014. They tell you it’s gold, despite its correlation with gold and real interest rates making no progress over a decade. Could these claims one day be true? Yes, but today they are lies. Bitcoin is halfway through its blockchain lifecycle, and in many ways, it’s stuck at square one. Always be ready to reevaluate. Don’t let your brain turn to MUD.

Image Sourced from Pixabay