How to navigate a negative bitcoin performance in all 4 quarters?

Bitcoin performance before 2022

This is what has happened in the 9 years before 2022 when we see a bitcoin performance split quarterly.

YearQ1Q2Q3Q4
2013539.96%-3.97%40.6%479.59%
2014-37.42%40.43%-39.74%-16.7%
2015-24.14%7.57%-10.05%81.24%
2016-3.06%62.06%-9.41%58.17%
201711.89%123.86%80.41%215.07%
2018-49.79%-7.71%3.61%-42.16%
20198.74%159.36%-22.86%-13.54%
2020-10.83%42.33%17.97%168.02%
2021103.17%-40.36%25.01%5.45%

As you can see, Bitcoin has never had consecutive 4 losing quarters, and in any instance of 2 or 3 loss-making quarters, it has bounced back decently. Giving a chance to all investors to come out of their long positions unscathed. This is an observation, based on factual data from the last 9 years. 36 quarters and 3000+ days.

Some other kinds of inferences are also drawn basis the above data.

  • The second and fourth quarters are generally good profit-making quarters – 66% chance
  • Every 4 years there is a top and a bottom.

Everything went for a toss in 2022

YearQ1Q2Q3Q4
2022-1.59%-56.7%-50%-18%
2022 is the first year where BTC has given negative returns in all 4 quarters of the year. This affected decision-making of a lot of investors who faced huge losses due to being biased based on old data

2022 is the first year where BTC has given negative returns in all 4 quarters of the year. This affected decision-making of a lot of investors who faced huge losses due to being biased based on old data.

Basis the above bitcoin performance analysis,

  • We should have bought BTC in quarter 2 as we saw a loss in Q1 and we would have a 56% drawdown on our hands.
  • Some people think that Q1 and Q2 are losses so Q3 will definitely be a profit bought in Q3 and were affected by 50% more drawdowns.
  • Too many people bet their horses on Q4 because under no circumstances can Bitcoin give 4 consecutive loss-making quarters and were affected by a further 18% drawdown in their Bitcoin portfolio value.
  • Some are in the hopes this being the 4-year cycle where $15-16k, is the bottom and they will accumulate at the bottom to sell at the top.

A lot of you would be resonating with at least 1 of the above 4 examples of investors/traders/degens that I’ve come across all year.

Such bitcoin performance analysis does not work!!

The year 2022 is a prime example to demonstrate the sheer stupidity of such analysis.

Bitcoin is not a business or a company dependent on seasonal harvest to be analysed basis performing and non-performing quarters
Nor is it a consumer focussed business where its sales would peak in December and stay dormant in April. It is literally a virtual currency with no dependencies on any real-world phenomenon except its usage and adoption.

Such black swan events are more common than they appear and Investors suffer a huge deal when these occur because they haven’t planned for this at all.

How to avoid such an analysis?

We have to stop bringing stock market parallels to the crypto analysis framework or we’re bound to be doomed. The charts may look the same, and Indicators may look the same, but the underlying force behind the workings and speculation is vastly different from the stock or any other asset class.

Before 2018/2019 Bitcoin was equivalent to a penny stock, the price movements at that time, do not reflect its current state of maturity in the market and thus bear no resemblance to the future. Do not take price movements prior to this as your benchmarks for bitcoin movements

A lot of people try to find patterns where there are none, basically, they try to make sense of something happening in front of them, with no regard to its intrinsic properties and stage.
Bitcoin at $200 is vastly different from Bitcoin at $16000.

Suggestions to avoid this trap

Act on Today’s data and some recent data at least for cryptocurrencies.

Put up a strict set of rules to be followed when the position goes against you.

Let Sypto Strategies do it for you…

Sypto builds a strategy with more weight to recent data than considerably older data, making it much more adaptive to current market scenarios.

It is algorithmic, even if we intend to, we cannot bypass the rules, this keeps human emotions out of the picture & gives you the accuracy of a sharpshooter while decision making. It does not fall trap of sunk cost fallacy, recency bias, revenge bias or any other kind of bias.

Because it is algorithmic, it is monitoring the crypto movements 24×7, which is practically impossible for a Human.

Sypto Strategies would go into a protection mode when such black swan events start appearing in the market.

Once you connect it to your account, there is no further involvement required from your side.

Interested?

Read about strategies by sypto.xyz