Bitcoin (BTC) currently presents the perfect setup for a short squeeze. The number of shorts has reached an all time high and it is not clear what the bears are thinking or better yet, drinking. At every point of reversal in a market, the investor that goes with the herd suffers the most. The mentality of bulls and bears is completely different as the former trades on FOMO whereas the latter trades on FUD. Both can use market sentiment to their advantage during an ongoing cycle. However, trouble arises when they do not realize that the trend is about to reverse. Most people who were buying Bitcoin (BTC) around $18,000 have already panic sold, with big losses. Those that did not sell wake up every day to a bloodbath that sees their coins drop further in value.
For the patient few, hodling can work quite effectively. If you do not mind missing the opportunity to buy dips and accumulate further, then you can just hold your coins even through losses in the hopes of an ultimate recovery. We have seen Bitcoin (BTC) ‘die’ countless times before. Even the CEO of JP Morgan recently said in an interview that he does not believe that Bitcoin (BTC) is something that is going to vanish overnight. A lot of people now realize that if Bitcoin (BTC) has come this far to have survived against all odds that only means that it is here to stay. So, people buying Bitcoin (BTC) or entering long positions with manageable risk will do well eventually no matter how long they have to wait.
However, those betting against Bitcoin (BTC) are playing a very different game. Time is a friend to the bulls, but it is an enemy to the bears.