What Now?

Medium | Tristram Waye for Bitvo | Jan 11, 2023

So the start of the year is also a good time to take a look at how you’re thinking about the current environment. Then deciding whether some adjustments might be required.

• The survival mindset is helpful until it isn’t:  This adaptation and compensation can help you to work through whatever challenge you are facing at the time. But it also shapes how you interpret everything you see and hear. This mindset will shape the decisions you make. And at times, survival mode decisions can be detrimental.
• The same thing applies in a down market. Over time you learn to compensate and adjust. There is something oppressive about so much negativity in the market. The constant price declines and negative news. The assumption is that there’s a scam around every corner. Eventually, this shapes your thinking and reactions. It alters the way you see opportunities. We talked about this in our pieces on trading slumps and more recently on bear market rallies .

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• Crypto focus:  In crypto, there are a few things you could be keeping track of as a barometer of activity.
  • One is simple price action. How are various tokens, altcoins, and cryptocurrencies responding to negative news? Are the reactions shallow? Which news or stories bring out the most selling? Which look strongest? Is there a theme that stands out or seems to be picking up interest?
  • You might want to look at the themes that raised money in 2022. The first half had a lot of investment. The second half was relatively quiet by comparison. Then keep an eye on the themes that are attracting capital in 2023.
  • You may want to keep an eye on development talent as well. Where are developers staying, and where are they in demand and moving? This can give you an idea of where future opportunities may come from.
    • Lots of building is still taking place. And the leaders out of a downturn aren’t the ones with an idea or something that hasn’t been executed yet. It will be the ones with the infrastructure that is ready to go.
  • One thing is an ongoing pullback in , which may change as markets firm up and confidence returns. This means the action may be more restrained on the downside in crypto. Not saying that it will, but with less liquidation potential , the fast downside moves will be fewer and shallower.
    • When prices stop responding negatively, that’s a potential sign of a change in sentiment.
  • As the US congress is sworn in and committees are decided, regulation will eventually come to the fore. While this applies strictly to the US, it will influence regulation elsewhere as it gets going. And it may, from time to time, influence trading activity.
  • And don’t forget the drama of the ongoing bankruptcies and hearings around various 2022 crypto train wrecks. These will provide entertainment porn for the naysayers and haters. And these events will also shape how regulators respond, and new crypto players decide to operate.

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• Censorship has shaped the narratives about what is going on and why. The collusion between government, law enforcement, intelligence and social media was revealed on Twitter as Musk opened up the files to various reporters. The active suppression of information suggests that there is plenty of information waiting to come into the public sphere.
  • Which might be why governments all over the western world are tabling censorship legislation to give them control over public discourse.
• Don’t forget the hard-earned lessons of 2022:  Another area of importance to start the year is to heed the lessons of the year that has passed. And speculative products and assets require both scrutiny and monitoring.  Too many forgot this last year and ended up giving back gains and in some cases, being wiped out.

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