Don't Chase Bitcoin

The market feels strong. Bitcoin’s current price action reflects a remarkable resilience, with dips quickly being bought up and prices steadily pushing back toward all-time highs.

Despite the huge liquidations we’ve seen so far in this cycle, the lack of any significant dump is notable. Even 4-5% pullbacks feel minor when compared to Bitcoin’s well-known volatility profile.

A Holiday Rally?

The consolidation pattern we’re seeing—higher lows, strong recoveries, and consistent upward movement—reflects a running bullish market. When dips are shallow and short-lived, it often signals that the market is gearing up for an upward breakout. As we move through this part of the cycle, we’re likely to see a strong move to the upside before a more substantial pullback.

Seasonality also plays a role here. Historically, Bitcoin has seen upward momentum during the latter half of December, often referred to as a “holiday rally.” This could coincide with the current market structure, pushing prices higher as we approach the Christmas and New Year period. A peak toward the end of December, followed by a pullback into January, aligns with typical cycle behavior.

The Greatest Risk

The greatest risk for investors in this environment isn’t necessarily market declines—it’s being out of position during a bull run. Timing pullbacks can be extremely difficult, especially when the market moves quickly. A 10% gain at current price levels represents significant jumps of $10,000 or more, and Bitcoin can add 20% in the blink of an eye.

Final Thoughs

While sharp declines are part of Bitcoin’s nature, they should be seen as opportunities rather than causes for panic. History shows that during bull markets, Bitcoin experiences periodic resets. These corrections, which can range from 25-30%, are part of the market’s rhythm and are often followed by renewed upward momentum.

If you’re holding Bitcoin, my advice is simple: hold through the corrections. If you’re not yet at the allocation you want, those dips are the time to add. Trying to sell and buy back lower often leads to chasing—Bitcoin tends to move quickly, leaving many scrambling to re-enter as prices climb higher.

Thanks for reading!

Written by Timothy Assi, a popular investor on eToro.

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