{"id":20754,"date":"2023-03-27T07:30:55","date_gmt":"2023-03-27T11:30:55","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=20754"},"modified":"2023-03-27T07:30:55","modified_gmt":"2023-03-27T11:30:55","slug":"experiencing-bitcoin-fomo-read-this","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/experiencing-bitcoin-fomo-read-this\/","title":{"rendered":"Experiencing Bitcoin FOMO? Read This"},"content":{"rendered":"<p>The Fear of Missing Out, also known as FOMO, has bankrupted more traders than I can count.<\/p>\n<p>Giving in to FOMO usually ends badly. It&rsquo;s simply human nature to buy tops and sell bottoms in the market.<\/p>\n<p>In fact, this is one of the most frustrating cycles that amateur traders experience.<\/p>\n<p>Amateur traders consistently find themselves getting in on market movements just as they&rsquo;re about to end.<\/p>\n<p>This leads them to believe the market is actively conspiring against them, because seemingly the moment they push the buy button the market starts to sell-off.<\/p>\n<p>The cure for FOMO is learning to recognize when a move is getting exhausted and is ready to reverse.<\/p>\n<p>Today, I have an example of this in bitcoin.<\/p>\n<p><a href=\"https:\/\/www.jeffclarktrader.com\/market-minute\/nows-a-good-opportunity-to-take-profits-on-bitcoin\/\" target=\"_blank\" rel=\"noopener\">I last wrote about bitcoin on February 23<\/a>. At the time, I suggested that traders should consider closing out their positions as a pullback was well overdue.<\/p>\n<p>Sure enough, bitcoin topped out that same day and pulled back by over 22%.<\/p>\n<p>Since then, bitcoin has gone on to rally almost 48% in less than two weeks. That&rsquo;s truly an incredible move, and if you missed out on this melt-up, you might be suffering from a bit of FOMO right now.<\/p>\n<p><!--GRAY BOX START--><\/p>\n<div class=\"card bg-light mb-4\">\n<div class=\"card-body\">\n<p align=\"center\" style=\"font-size: 18px;\"><strong>Free Trading Resources<\/strong><\/p>\n<p>Have you checked out Jeff&#8217;s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just <a href=\"https:\/\/www.jeffclarktrader.com\/\" target=\"_blank\" rel=\"noopener\">click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n<p><!--GRAY BOX END--><\/p>\n<p>Let&rsquo;s look at a current chart of bitcoin so you can see why buying right now is likely a mistake.<\/p>\n<p>With a bit of patience, it&rsquo;s likely you&rsquo;ll be able to buy bitcoin at a relative discount.<\/p>\n<p><!--IMG SNIP--><\/p>\n<p align=\"center\"><img decoding=\"async\" class=\"img-fluid\" alt=\"Image\" src=\"https:\/\/cdn.jeffclarktrader.com\/JMU\/images\/202303\/20230327-JMU-01_nkt345.png\"><\/p>\n<p>There are two key features to this price chart:<\/p>\n<ul>\n<li>\n<p>We have the 20 and 50-period moving averages (MA). These two technical indicators do a great job of identifying the intermediate-term trend. <\/p>\n<p>If the market is trading above both MAs, and they are both sloping upwards, that&rsquo;s a great sign that the trend is to the upside.<\/p>\n<p>As you can see, that&rsquo;s exactly what&rsquo;s going on with bitcoin right now. This information tells me that so long as the MAs are in this condition, I want to be a net buyer of bitcoin and not a seller.<\/p>\n<p>Here&#8217;s another important observation we can make using the moving averages&#8230; Notice how prices have pulled away from both MAs. <\/p>\n<p>When prices pull away from the 20- and 50-period MAs, that&rsquo;s a sign that the market&rsquo;s move is getting exhausted, and we will eventually see the market pull back to its moving averages. This is known as mean reversion.<\/p>\n<\/li>\n<li>\n<p>The second important feature is the bearish divergence between the Relative Strength Index (RSI) at the bottom half of the chart and the price of bitcoin.<\/p>\n<p>The RSI measures momentum in the market. Whenever it diverges from the price action, that&rsquo;s a very strong sign that the market could reverse.<\/p>\n<p>Notice how the RSI peaked at the beginning of the year. At the same time, the price of bitcoin kept steadily climbing.<\/p>\n<p>This divergence between the RSI and the price of bitcoin is a warning signal that we are likely due for a sharper pullback.<\/p>\n<\/li>\n<\/ul>\n<p>The next major objective for bitcoin bulls is to test a resistance zone roughly between $30,000 and $32,000. This would bring bitcoin back to where it was trading in June 2022.<\/p>\n<p>To take advantage of this opportunity, it would be ideal for bitcoin to pull back to its 20- and 50-period moving averages. This would afford traders a great price point to get back into a still developing uptrend.<\/p>\n<p>That means bitcoin could trade as low as around $24,000 before starting its next major leg higher.<\/p>\n<p>Happy trading,<\/p>\n<p>Imre Gams<br \/>Analyst, <em>Market Minute<\/em><\/p>\n<p><!-- MAILBAG BEGIN --><\/p>\n<div style=\"padding-top:0px; padding-bottom:0px; margin-bottom:20px; margin-top:0px; border-bottom: 1px solid #CCCCCC\">\n<h2 style=\"color: #000000; font-family: Arial; font-size: 25px; font-weight: bold; letter-spacing: -1px;text-transform:uppercase;\">READER MAILBAG<\/h2>\n<\/div>\n<p>What are your thoughts on bitcoin? Are you bullish, waiting for the next breakout&hellip; or skeptical and bearish?<\/p>\n<p>Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at&nbsp;<a href=\"mailto:feedback@jeffclarktrader.com\"><strong>feedback@jeffclarktrader.com<\/strong><\/a>.<\/p>\n<p><!-- MAILBAG END --><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The cure for FOMO is to learn to recognize when a move is getting exhausted and is ready to reverse. Today, I have an example of this to show you in bitcoin.<\/p>\n","protected":false},"author":55,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[76],"newsletter-type":[],"ticker":[],"class_list":["post-20754","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-imre-gams"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/20754","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/55"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=20754"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/20754\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=20754"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=20754"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=20754"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=20754"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=20754"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=20754"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=20754"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}