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November 26, 2021
Black Friday Discounts Are Here – Should You Take Them?
What a nice way to wake up today and see the stock and crypto markets crumbling – seemingly out of nowhere. Is it time to panic?
After seeing almost only green yesterday, today we have the opposite picture: red across the board.
According to CNBC (or their new intern?) Bitcoin has officially entered a bear market. The writer must be new to crypto…
So, what has caused today’s crash? Well, it’s Covid fears again. How much we missed them…
What did we say yesterday?
In recent years we have seen more than once that retail investors who jump into the market on a holiday get punished soon thereafter...
Well, it seems like the punishment for Thanksgiving FOMO buyers came quickly this time. We told you to be careful, especially with retail-driven rallies on public holidays.
Should you jump in and buy the dip today? Although laddering in buys on days like today is certainly better than on a green day like yesterday, there are still reasons to be concerned about more downside price action in the short term. Particularly when the consensus in the crypto crowd is to buy the dip and traders jump in with leverage, it’s reasonable to stay cautious.
Should you sell parts of your positions now to derisk? Well, technically, it’s not an ideal moment, and it’s always better to take profits on the way up. But if you feel like you seriously overexposed yourself to the markets, it’s always wise to monitor your risk profile.
Will the Fed come to the rescue again, this time if the stock market crash intensifies? While that’s undoubtedly the consensus expectation and also our base case, there is a chance that “this time is different.”
What Does Today’s Sell-off Mean for the Market Cycle?
While the short-term outlook seems uncertain, it’s essential to zoom out and continue to build your overall investing framework.
A significant difference between 2018 (the first year of the last bear market) and 2022 is that this time around, massive fundamental catalysts are coming up, such as ZK-Rollups and “the Merge” for Ethereum as well as the emergence of highly anticipated ecosystems (e.g., Polkdaot, Cardano).