Dentists Who Invest Podcast
Official Podcast of the Dentists Who Invest platform. Talking all things investing, money and finance with a dental spin. Have you ever wondered how you can grow your wealth and protect your hard earned money as a Dentist? We've got you covered. Featuring famous guests such as Andrew Craig, Edward Zuckerberg and Benyamin Ahmed we delve deep into EVERY aspect of finance to educate and empower ALL Dentists.
Dentists Who Invest Podcast
Bitcoin - What Is The Market Doing? with Dr Sandeep Sadana
Collect unlimited free verifiable CPD for UK Dentists here >>> https://www.dentistswhoinvest.com/video/1
———————————————————————
What’s the smartest way to invest in Bitcoin without risking your financial and mental wellbeing? In this candid episode, Dr Sonny returns to share his rollercoaster journey through Bitcoin’s extreme highs and lows from the thrill of 900 percent gains to the stress of 85 percent drawdowns
Bitcoin recently surpassed its all time high, reaching approximately 73000 ahead of the expected halving event. This earlier than usual surge may point to increased institutional interest following the launch of Bitcoin ETFs. But for dental professionals considering crypto exposure, the key is not timing but having a clear strategy
Drawing on personal experience and market data, Dr Sonny explains how volatility affected not just his portfolio but also his sleep, mental health, and focus at work. He shares practical lessons learned including three investment strategies, allocation tips, and data backed tools that help make sense of Bitcoin’s unpredictable price movements
You will hear how he uses a hot potato thirds exit approach to manage risk, why technical indicators can be powerful if used correctly, and how to approach crypto investing with a mindset that avoids both hype and fear
Whether you are just crypto curious or already holding Bitcoin, this episode offers practical insights to help you make more informed decisions and avoid common pitfalls. As Warren Buffett reminds us, be fearful when others are greedy and greedy when others are fearful a principle that remains especially relevant in the world of cryptocurrency.
———————————————————————
Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.
Hey, what is up everyone? Another episode of Dentists Who Invest Podcast, where we're here today to talk about Bitcoin, which is hot on everybody's tongues at the minute, given its recent price action, which went and broken its all time high, which the crypto aficionados in the audience will know generally happens every four years or so. Well, a little early, but not too far off when it was expected. Does that mean that we sell our house and go all in on Bitcoin? No, it absolutely doesn't. We're here to talk about how one can sensibly and responsibly gain some exposure to the crypto market, should they so wish, because, again, it's not for everybody. And here to help us on that front today is Dr Sunny. How are you Of Dre composite direct restorative excellence, who and I know that you have, of course, been on the podcast before Dr Sunny? Anyway, how are you today?
Dr Sandeep:I'm good, James. What's going on, man? How are you?
Dr James:Always good bro, always hustling, always thinking about the next level, the next stage. What about you? What's fresh?
Dr Sandeep:Nothing man, I'm just a bit jealous looking at your Dubai pictures.
Dr James:Oh yeah, yeah, it was all right out there, it was all right hello.
Dr Sandeep:Having said, that you know instagram versus reality.
Dr James:Right, it actually rained one in three days. Uh, it actually rained loads. Man, I was like what the hell? This is supposed to be the desert? Apparently it's some sort of terraform, terraforming uh initiative that they have out there. It's not quite performing.
Dr James:I know that that's not technically what it is, but uh, uh say, using that term somewhat ironically but apparently the cloud seed basically, and what they're trying to do is get a little bit more rain when the green areas of dubai and they overshot it a little bit. And for anybody who's listening to this podcast, we are, of course, recording this on 18th of april 2024 and anybody's been watching the news a few days ago will have seen that dubai was absolutely rained out. There was so many floods out there that basically the whole street there was cars that were submerged, etc. In the middle of the city. So I literally got out of dubai and back to northern ireland the day before that happened.
Dr Sandeep:Nice. So now you're back to sunny England, yeah, or sunny Britain.
Dr James:Sunny Northern Ireland, bro, sunny Northern Ireland, which is again I'm saying that ironically, as I'm sure most people have guessed Looking out the window right now it's pretty grey. But anyway, enough about the weather in different parts of the world. We said we'd talk about Bitcoin, so we should probably do that at some point, right, Sunny?
Dr Sandeep:yeah, yeah, let's do that. I'd like to just state where we're going to be.
Dr James:So we're going to be looking at what's your take on all the craziness that's happening out there at the minute?
Dr Sandeep:what's my take? Well, I mean, um, you want to share? Share some charts immediately. Are we going to do that and talk them through? Because, uh, the chance don't lie right we can.
Dr James:You know what we can. We can freestyle. That's the fun part of the podcast maybe, maybe just high level. What do you think about the current market scenario in the situation? What are your thoughts? Is it to be expected? Given what you know about crypto is a little surprise and a little weird. What light can you shed on it?
Dr Sandeep:that's a great question, that's great. That's a great way to start. So. So I'll probably say, I mean, for anybody who is following Bitcoin, this thing over the long term, so far it's just gone up, right, it's gone up.
Dr Sandeep:Yes, it has some really extreme volatility and pullbacks and downside and you can really get caught up into that. As you know, I had a really mixed experience, most of it bad. It's turning good now, but I'll sharing that, sharing that, and hopefully some people can learn from the pain, right, they can learn from the pain and not do the same, right? But, um, it's one of those, uh, it's one of those markets that is super extreme. It's 24 7. You know it's super volatile and if you don't know what you're doing and you watch price, it can really, you can really spook the best of us.
Dr Sandeep:So, but yeah, I mean, um, I was just to say that actually, what we're seeing, you know, we've seen an all time high break this cycle before the Bitcoin halving, and so if you're like a seasonal type person ie looks at like price and charts and trends and stuff then what we're seeing, you know, is it's a little bit early. So, as you mentioned, it's a little bit early. Also, I think from the previous all time high till now, the recovery has been super quick. Also, I think from the previous all time high till now, the recovery has been super quick. So there are some changes, you know, including the Bitcoin ETF approval. I think that's had some real impact in that A lot of this buying may be institutional.
Dr James:And, as a result, that's you know, that's what's accelerated Boom. I love that, and certainly that's the common thesis that, now that we've seen the Bitcoin ETF, a lot of the money pouring into bitcoin at the minute is from institutions and they're front running the bull market which usually happens around about the halvening, which is an interesting event in the lore of bitcoin and maybe you could shed light on that as well sandy man, you know what I really wanted to go and really stick to the technical price perspective, because I'm sorry, I'm messing up the whole entire script, sorry guys.
Dr Sandeep:Yeah, yeah, just because if I start getting into like the, the, the, you know. Everyone's got their motivations as to why and I just didn't as a whole. We could just talk about that for a whole hour quite easily, about what the halving is and the rest of it, but most of that stuff's really available on the internet. They could probably explain it far better than I could, whereas what I think I can help people do is really just look at bias and really develop a strategy and just get like a kind of a you know, live, live through my experience, and then just make it, make an informed decision for yourself.
Dr James:So let's do that sounds fun all right, cool, cool, cool.
Dr Sandeep:Shall I? Um, shall I show you, shall I give you the recap of the roller coaster and let everyone kind of experience how this market moves and just give them a bit of a. We can go back a few years and just show them how it works sure, absolutely so.
Dr James:What sandeep is about to do just now is put a price action chart on the screen. I know that some people will be watching this video and some people will be enjoying it as an audio experience by the podcast. So what we'll be very careful to do my uh, all of us, everybody involved in the podcast here today is ensure that we're super, super, super descriptive of what we see. Therefore, everybody who is listening well, they'll be able to participate and understand as well that's right, that's right.
Dr Sandeep:So tell me, James, can you uh, can you see that?
Dr Sandeep:yeah, yeah cool, all right. So what I want to start off? I didn't want to go all the way back to the beginning of bitcoin history anyone could do that but I just wanted to start where, kind of near the time when I started to get involved, right. So this is um november 2015. Right becomes like 2666, yeah, $266. So what happened then? Over the course of 550 days, it then went up 359% right, so up to 1,233 USD.
Dr Sandeep:But what you can notice when you look at this right, this is each of these candles is a day right, and so you can just see how volatile this thing is. That actually, holding it from any anywhere in there, all the way to the top, a lot of people, would you know, get sick at looking at this, and you know you're. It really does play with your emotions. So it's quite easy to get what they call inverted commas shaken out right where you just the price action is crazy, the way the price moves, it scares you, so you get out and then price runs up, then you get back in, then it dumps, and so on and so forth. So quite a typical story for a lot of people who get into the market and, of course, at the end. I certainly will give uh just some lessons and some, you know so, not financial advice, but just like how I'd play it if, uh, if I wasn't in now, and stuff like that.
Dr Sandeep:But nonetheless, it took about 550 days for bitcoin to make this all-time high. Right, and what I'd like to point out as well is actually, when it broke the all-time high, it then had this crazy whipsaw action like it. It sold off, it came back up, it sold off, it really sold off. Then it went and went on to break the all-time high. So we're seeing something very similar to that I'll get to that uh later on where the price action is looking really quite horrible around the uh, the all-time high.
Dr Sandeep:So far, and I think you know something similar to this can happen. I'll also tell you what, what the long-term thesis is, and anyway, let's carry on. So then it does break the all-time high, and now this is uh, 2017, by this, you know, by um, by 2017, uh, the summer-ish becomes around 1800 usd. Now I've been watching it for a whole bunch of time but just, you know, I was too scared, I didn't really understand it, didn't know what to do and actually, at this 1800 dollar mark, I actually bought, my, actually bought in, and at the time I was not a very happy dentist and I really thought that, um, crypto would be this sort of magical one, one shot that I'd get out of dentistry.
Dr James:Um it just everybody goes sorry to jump in.
Dr Sandeep:Everybody does, me included as well yeah, yeah, it just doesn't work like that, right, I think um anyone who?
Dr Sandeep:expects, expects a windfall or fast money, is probably going to be, you know, uh, sorely disappointed. Of course, there are lucky people who it happens to, but the graveyard is lit with those who tried and failed, right? So, nonetheless, I get in at this 1800 price handle. This is mid 2017. You know, I had moved out of nhs dentistry, gone into fully private and realised, actually, you know, the grass wasn't greener and I actually wasn't that good enough to really perform in our environment and no other stresses and all the rest of it I just wasn't happy, just put it that way. Nonetheless, this was kind of what I thought my good idea would be. I'd become a trader not realising that this market is full of professionals, right, full of absolute sharks, who will take your money readily if, if, you try and trade with them. So, anyway, from that point, bitcoin then ran up from the previous all-time high to its next all-time high over the course of 238 days, so, which is a 1500 percent gain, and topped out just under around 20 000 dollars. Yeah, now where I had got in, that was a 916 ish percent gain, right? So crazy, you know. So this investment I had made at this time, you know, unbeknown to me right. I didn't really know what I was doing. I just put this money in and thought I was a trader. But actually the truth of the matter is, you know, the market pays you to be long when it really runs. And if, as we're going to look at bitcoin history the moment, the majority of the time bitcoin runs up, you know, but when it runs down it's painful, but most of the time in its history it runs up. So, nonetheless, these are the kind of gains. So at this point I, you know, made a. I made, you know, quite a sizable chunk of cash. At this point, I was really sort of ready. I thought, yeah, I could do this professionally. I don't need to be a dentist. This is, this is what I was born to do.
Dr Sandeep:And, um, sadly for me, that following year, across 2018, the market bled out 84%. So, from the high to the low, minus 84%, right, and so, yeah, that's quite painful and that took around 364 days, right. So, over the course of this year, and again, for anyone who's looking at the chart, you know, there are many times where you'd be in this market and you think, okay, it's going to be all right, and then it doesn't, and then it looks okay again, then it doesn't, and then what happens? That's how people get caught offside, right when you're trying to exit a market like this. And again I'll talk about strategies for exiting that I employ now. That has kind of served me quite well, um, so anyway, let's, let's carry on from there. So, as we look ahead now, because you've topped, it sort of bottoms out. So from 20 000 at the top it bottoms out at 3 000 pounds. So anybody who bought that top and then it's down at you know 3 000, that's quite hard to stomach. Most people won't be able to stomach that drawdown or even want to buy it on the way down or anything else like that. It's just quite a painful thing if you're new to this market.
Dr Sandeep:And so that red arrow there, which is around the sort of three and a half four thousand dollar mark I sold right because I had enough positive thing was what this did do to me, this experience. It was a bit of a baptism of fire. You do really learn about yourself, um, you know you really mature because you have no choice. But what that really did for me. That year I really doubled down on dentistry, so I did so many courses. That year I just went course mad, right, I was like someone saved me and my dentistry really improved, at least over that year, and actually it's probably the foundation to, uh, the dentistry that I do today really started in this, uh, in this phase.
Dr Sandeep:So from where? Um, bitcoin bottom, then, right, that bottom, uh, it then ran up another 337 percent right to reach about 14k. Right now I had sold, remember. So as I'm watching price run up, I'm like, oh, you know, at least I'm not in it, you know, at least I'm not in trouble anymore. And then obviously then it gets to five thousand, six thousand, seven thousand, and you get that sneaking feeling damn, I'm wrong, you know I'm wrong, I need to get back in. And so this is just an example of how the market just whipsaws people, right, and these are just emotions at play, because the time I sold and I'm going to show you like a tool that you can use at the end to really identify when it's a good time to buy, when it's a good time to sell but that tool would have said to me it's a good time to buy and not be a seller. So who was buying from me? Somebody, very smart, right, somebody knew this was discounted in a good price. So I get back in at around seven, eight thousand and then bitcoin runs up 85 from there. So not, not, not too bad.
Dr Sandeep:And then, of course, it starts to sell off again. So, from the high to the low and the COVID low. So when COVID happened, there was a very sharp crash, shall we say, and it went back to 3,500, something like that. It spiked all the way down there. That meant that from the top, if people had bought in that high thinking, okay, it's going back up again. And people often you know people who are late to the market they often buy at the top of the market, right, they don't buy it when it's quiet, right, they don't buy it when it's quiet, they buy it when it's noisy. They would be minus 70% down. So, again, just really difficult for a lot of people to stomach.
Dr Sandeep:However, as mentioned, I'm doing a lot of teasers here, but I really will just lay out the strategy of how to not get caught up in all of this. Where my entry was, I was down 47%. So imagine if you'd put 10 grand in, you'd be down 5k and again, a lot of people would often puke that and not decide to buy more. Then, as I didn't puke it at that point and as it started to creep up, I got out of break even. Very, very common thing that you see from beginner investors or traders or whatever, whereby you know they've got in a, let's say, my entry, let's just say, for seven and a half k, and then when it gets back up to like six, seven and a half k, they sell again because they just want to relieve the pain, the uncertainty of, uh, of the unknown. What's going to happen next? So, um, follow me, so far, James.
Dr James:Yeah, I'm with you, bro. I'm listening intently.
Dr Sandeep:Cool man. So then, from that point, right, bitcoin then goes from that COVID low where everything really tanked quite hard, and I know some very smart dentists who actually got in, not the crypto market, but got into the stock market during that that dip and bought airlines and all kinds of stuff. And these people obviously a little bit seasoned, um, but some of those did not touch crypto or bitcoin in particular, just because and smartly so I thought they didn't really understand that market. They didn't know it, right, uh, it would. It would have paid off in hindsight. But hindsight is 2020 super clear in hindsight, looking back at a chart. But when it's happening, they call it the right side of the chart, right where you don't know. It's blank, there's no candles there, yet there's no up or down, so you don't know, it's very unknown and that's where, that's where traders live, right? So, anyway, from that point, bitcoin then over the next 277 days, right goes and goes and makes a new all-time high, so it cracks the 20k handle. Yeah, so around two these are approximate figures. You have 277 days. It might be plus or minus five days and from where I sold, that was something like I don't know 159 gain and from the low, that was already a 400 gain. So just ridiculous movements this, uh, this instrument has, and what happened thereafter was that the reason. You know, I was just sitting out, you know, just watching this price go up, just going up, when it got to that all-time high.
Dr Sandeep:I remember I used to follow this analyst online. You know I'm not going to name his name, but very respected guy. You know a very knowledgeable guy, mainly a crude oil trader, and I saw his commentary and his sort of coverage on bitcoin at the time and he was like, oh, this is a, this is uh, you know, this is going to be a rejection here. Bitcoin's over, overbought. You know all of these technical things that meant bitcoin shouldn't go past 20k and we're going to get a chance to buy lower. And, you know, fatal last words because I didn't get a chance to buy lower. Right, and listening to people on the internet probably isn't a good idea. Yeah, I mean, that applies to me as well. Right, don't listen to me. Definitely go do your research, but, like I said, I'll unpack that now. This is just a painful journey so yeah, exactly, exactly d y o r.
Dr Sandeep:And so now, from the all-time high as price starts to uh, break that 20k handle, as it starts to creep back up again, I get that feeling I'm wrong here, you know I'm wrong.
Dr Sandeep:As it gets like 23, 24, 25, 26, 27, 28, like that kind of level I'm like at like the 28, 29k, I'm like man, I've got to get back in, right. So I did. And you know, as soon as I got in it, you know it pumped up a good few days and then it sold off back to my entry, pumped up again, sold off, sold off below my entry. I'm sweating again like what am I doing? Am I just buying the top of the market every time? And then, luckily for me, it recovered and then it started moving up to its next all-time high. So from its 20k all-time high break it then went to 64 000 ish, 64, 65 000 ish in 120 days. And so from the all-time high just to illustrate this and I have got stats to back back some of this stuff up and give people some data but from that all-time high break to the new all-time high, that was a 230 gain. So even though you didn't buy the bottom but you bought when it was actually clearly trading beyond the all-time high. There's still some real upside there and for me that was 100 percent gain at that point. But I think you're detecting a team right, so detecting a theme right. There's going to be a bit of a rug pull again for me.
Dr Sandeep:And so after that, after that all time high, it then crashes again 55 percent. So the market breaks down. In hindsight, technically I understand it. Now I see why that was not a good place to still be long, but I stayed long. Now it goes all the way back down to my injury again. And then I'm watching this painful sort of like sideways movement. So markets, they move up, they move down or they move sideways, and that sideways period, also known as chop, is where a lot of people really lose money, because it goes up, they buy, it comes back down, they sell, it goes back and it just goes in this range up and down, confined to this, you know, small rectangle, so to speak. Anyway, nonetheless, this time I spot this real breakout. I thought this looks real, so I added to the position and then from there it ran up again and it broke the all-time high 140 days later. So again. Like you know, this time I'm like, okay, cool, maybe I know what I'm doing. And then then it breaks the all-time high, sells off again, tries to break it again, fails, tries to break it a third time, fails and again, for me, that was my thesis.
Dr Sandeep:I remember sitting in a restaurant with my very dear friend, and it was just me and him, you know, he was consoling me during this very stressful period and I said to him look, man, this is my thesis really. Uh, shouldn't really fail three times. Right, it's very uncommon to see like, uh, you know, it's very uncommon for for breakouts to fail on the third time in in crypto markets. And I had a whole thesis and I said this happens, I'll get out, and I, you know, I was holding myself accountable to the plan because I said it out loud to him and if I didn't do it, he certainly will ask me how's your position's doing? And if I said to him I'm still in it and I'm losing, he'd be like but you told me your plan. So you know, sometimes you've got to speak these things into existence and keep yourself accountable by your, by your, by your nearest and dearest. So anyway, from that point where I saw this sort of behavior happening at the top. It looked like a top and um.
Dr Sandeep:I actually put this in one of the most recent posts in dentistry invest group on my most recent analysis. As to why I reduced the position size, it's because of the same pattern that I saw here, and so when I saw it, I got out here and so, from high to low, bitcoin actually sold off 75 percent. Uh, over 236 days and again a lot of that time. When that happens, the market participants, me included think, okay, cool, it's going to bounce here, and you don't get the bounce.
Dr Sandeep:And then it bounces some and you think, okay, it'll bounce higher, and then I'll get out and it just sells off. And then it bounces a bit and you're like, oh, it's gonna, and it just keeps you teased like that that it's gonna happen and it just doesn't. And then it's just brutal because it will sell off harder. And now you're so far away from your entry. If you bought 64 and now you're at 30, you probably shouldn't be selling because you're gonna crystallize a 50 loss, right, but you may have been right in that regard, but we just can't predict the future right. Trading isn't about predictions in, in my opinion or investing. It's not about predictions. It's about making money right, and so we'll talk about that too. The strategies behind it.
Dr James:That is. You know what? That is a? What's it called? That is a quote right there. Trading is not about predictions, it's about making money. They're so down.
Dr Sandeep:It's probabilities right Signed by signed by.
Dr James:That's the term I'm using.
Dr Sandeep:Yeah, right, maybe sign by, sign by, that's the time. Yeah, totally, totally so. Then what happens is bitcoin, you know, sells off to a low of like in the 16 000s, right, and this is actually below his previous all-time high. Now I remember and see, there's this thing known as sentiment. You know how people are feeling because I remember something very stark, but actually at that 64k, 65k time I was doing some, uh, some dentistry a friend's practice at the time and on the way to his practice I was walking and I just saw some guy on the corner and he was on his phone and he was on his head, his headset, and he was talking to his friend.
Dr Sandeep:He's going oh man, there's so many cryptos to buy. There's so many cryptos to buy. You know, there's this sentiment indicator, of course, you know, very subjective, but when everybody's talking about it, like guys on the street and your taxi driver, and when I'm on the train on, I was on a tube and there was this poster on the tube and it was for afro coin, and I was like all these little meme coins, like not, you know, not, not real things. That's like a, like a top signal, yeah that's a tough signal.
Dr Sandeep:So yeah, yeah I'm telling you, right, when everyone's talking about it like that, then actually like it's not good, right, but when nobody's talking about it, is that these lows, when it, when it's like 16k none of my friends who are in the market were talking to me about it because obviously a lot of them were underwater and everything else is painful. You know, some people don't have the funds to top up their positions and so on and so forth. So, nonetheless, this was like you know, I had a couple of like. You know, I kind of read the situation correctly a couple of times, right, so I was like you know, I got in, I got caught out, then I got back in when, when I saw this breakout and then, crucially, as I mentioned in the previous post I put, is, if you take care of the downside, you know the upside will take care of itself and we'll talk about strategies for investors versus traders. Uh, in taking care of the downside nonetheless, it goes down to the 16k handle and then it ranges. Now it just moves sideways between 16 and 24k, you know, for about 273 days now.
Dr Sandeep:In that period, yeah, my, some of my smarter friends were like sunny, I'm buying like crazy, and and and so was I right? Because this time I've seen it before when everybody was bearish and saying it's going to crash, it's going to go to zero. It's a scam. You know this thing, you know. Whatever, that's probably a time to like. If you're going to allocate, probably allocate there. So that's what I did. And then it um, from that point it broke out from that 24k, went all the way up to 30K, but down to the 24K, which is very common. So when people buy something and then it pumps up and they're happy, and then it comes back to the entry and they're sad, it's like really normal price movement. You know it's called a retest, it's like super normal. In fact, you see it more often than not.
Dr Sandeep:Nonetheless, it went back up to 31,000. And you know it went all the way to the latest all-time high of 73K and that happened over a span of 478 days, right? So if you was in the market from I mean anywhere from like last October, if you were in from February, call. But if you was in from last October, you captured most of the move. So you know, sometimes people want to time it, they want to get the exact bottom, you want to get the exact top. It just doesn't work like that. And so from those previous lows, the 16k lows, to where we are now, the 73 or where we were at the 73 000 price, that was a 370 gain.
Dr Sandeep:So, like again, just insane moves, insane moves, right, um. So that's just like how, how I'm viewing stuff. And now I've just got a price chart up of, like, the current price action and it does look toppy to me and again, I gave my analysis. I won't exhaust that here. And actually, if you're not in the market and this thing goes all the way down to like 52 or, you know, 45 or whatever you know, for me, that's what I'm looking to buy some more. So not advice, just what I'm looking to do, um and so, because if you're not in it again, if it runs up higher, the only other option is to buy it, like above 70, you know, at the next breakout. Which um, which? Um, yeah, which is possible.
Dr Sandeep:Now I just wanted to to touch on this part about what we were talking about recently, James. We were talking about cycles of volatility, right? So in Bitcoin's history, some of the most sort of common price movement that we see is like during the times where the price is running upwards right, when it's running upwards, that we actually see, we see 20 to 40% pullbacks, even when Bitcoin is going up. It can pull back 20 to 40% and still be. Even when Bitcoin is going up, it can pull back 20 to 40% and still be a healthy pullback. But when it's a bear market and often it's too late to know that right it can draw down like 85 to 90%. So, again, just for people who aren't in the market or who are in the market, you just got to be prepared that this is the nature of the beast. It's an immature market. It's an immature market. It's a young market. This is just how wild the swings are and that will obviously peter out as this market develops over the next 5, 10, 15, 20 years. Obviously, if you're a believer and think it will still be here, where some people are super bearish, just think it won't even exist anymore it really depends on your position.
Dr Sandeep:Then what we were saying as well Bitcoin usually makes all-time highs after the halving and this time it's a bit of an anomaly. It's done it beforehand. So for me, I mean I'm not trying to read too much out of that, but I mean that's, that's quite to me, that's quite bullish. That's quite a good thing. Um, and then just something you know, because people message me a lot often and ask me about what about all coins? Because everybody wants to find the next bitcoin. Yeah, they want to buy, like you know, shit coin number 101 and then it goes from like 1B to like $10, right, and it can happen and it will happen for those.
Dr Sandeep:I know many people who've done that, but I also know a bunch of people who just lost the entire, whatever they put into it. But again, this comes back to risk and allocations, which we'll come on to later. I've got that planned here. So that's just what I want to talk about. But altcoins, just generally, as a rule of thumb, they generally, generally the market broadly, as in all of them tend to move together right. This is where you can't get it wrong, right where the market really pays you to be in. It tends to really move broadly, like that after bitcoin has topped its cycle. So when bitcoin's gone from 3k to or let's say, you know where I was 1800 to 20k after that 20k move and it crashed to 11 on that preceding rally up, that's when all coins did absolutely insane things. So just a rule of thumb I've observed over time is that all coins typically do well broadly. Where you're not trying to pick the best one, you're just trying to be in the market to get paid tends to happen once bitcoin has topped. So if you're really slick you know people call them rotators in crypto land where they're able to actually move out. You know they're, they're, they're layering out of bitcoin as it does the insanity and I'll show you a chart after which can help us give us an idea where it could or could go and then they'll rotate into alts that they like on on the pullback thereafter and actually do very well, and that, for some people, has been life-changing money at that point, like life changing opportunity, because it doesn't happen all the time. So that's something I'll be fishing for. I think that does make sense.
Dr Sandeep:Then what I'd say? Like just some lessons, yeah, just some big lessons for everybody. Like, if you're in crypto and you're in bitcoin, I've got a yearly chart on now. So that's ever since bitcoin was, uh, you know, since inception of 2008, all the way to 2024. Now, each candle is a year and what we can see on the screen is that this thing has just gone up. Yeah, it's just gone up, it's a strong uptrend, and so if we looked at bitcoin's negative years, there have never been two negative bitcoin years in the world, right? So that's just the character and the nature of the market. So if that changed, right, if that changed, or we saw, you know, the red candle, the dark candle, the low of, you know, the, not the low, but the um, the bearish year, the negative year. If price starts trading below that and stays and starts really trading beyond that, then the character of the market has changed. So this is what I'm talking about.
Dr Sandeep:This is what I understand the technical price perspective, as opposed to, like the wider macroeconomic you know not going into like cpi prints and inflation or that, that's far beyond my remit I'm just talking about becoming from a from a price uh perspective that everyone can see on a chart. You know information is available freely so that that chart, hopefully, if you are an investor, you're looking at an instrument that is and has been in for its whole history it's been trending strongly upwards. So even though there's serious drawdowns, it has it's just been up typically. So my lesson here is to zoom out. So if you look at, like you're looking at, price every day, you'll get I've shown you those charts and show you the price movements you will get just, your emotions will fly, you'll be exuberant one day, you'll be sad one day.
Dr Sandeep:You know it's just not a way to live, right. And if you've got commitments, it certainly is just a big distraction, right. So not good for a practicing dentist, in my opinion. So, zooming out, observing the yearly trend, that's super, super helpful. And then the big lesson to the former me would be the younger self if I didn't have to go through all that pain would be just deploy the capital and don't look back, you know, just invest in it, right, and just don't look at it day to day. It just doesn't make sense, right?
Dr James:so, um, yeah, you following that so far, James yeah, man, no, I'm just listening intently and you know it's a lot of, a lot of the established, uh, crypto doctrines that you're espousing. So, no, I'm vibing. I'm vibing over here, which I really like, and I guess you know what it'd be interesting to talk about the bear market and how that looks, because obviously that is the part where everybody gets stung massively in crypto. You know, everybody kind of makes, basically everybody makes money in the bull market, you know, providing you get out at the right time or have the right timeframe. But what about the bear market, which is the part that seems to catch everybody out?
Dr Sandeep:Yeah, I mean, it's brutal for anyone who's lived through it. It is absolutely brutal, you know. But I think I just prefaced the whole thing of investing in anything right, you're going to invest in it because you think this thing has legs, you think it has long-term potential and you think it's going to do well over time. Right, and again, I'll talk about the exact ins and outs, but actually I thought I'd dig into, like you know, try and be super balanced as well. Obviously I bullish bitcoin. I think long term it makes super sense, you know, until until price tells me it doesn't, right, but right now it just makes sense to to be a bull. Does that mean you, you know market, you know, just put loads of money in right now, not unless you can stomach a potential, you know x amount of drawdown. We talk about strategies, about how you can get in, but I'd also like to present, like the bearish case in general. So what's the bearish case? I like price going down.
Dr Sandeep:Why is bitcoin rubbish? Why is it a scam? Why is it not going to work? Why is? Why? Should you not allocate anything to it? Right? Not even a percent of your portfolio, which, again we've discussed, the one percent strategy, which we'll come to as well, right?
Dr Sandeep:So people will say bitcoin isn't tangible, it's not a real thing. You can pick up a, you know, a coin of gold. You can, um, I don't know, I mean stocks aren't tangible as well, I suppose. Right, but I mean you can pick up these things. Real Real estate is physical. These things are physical.
Dr Sandeep:The argument is that Bitcoin is not, you know, it's not tangible, right? So I totally get that. Some people even argue and say, ah, the multiples in Bitcoin are over. You know the days of making 20x and crazy numbers. They're done. The market's still here to sit here to here, to be here to be enjoyed. Um, people often say that it can go to zero, and that is true. Like anything could go to zero of this nature, right, it's new technology, it's, you know? Um, who knows man, nobody can tell you that bitcoin's here forever or that is going to be the next thing, or that it is going to zero. Nobody knows that until it happens. As a result, you know, this all comes down to, like, your sizing and your risk, right? So if you allocate one percent of your portfolio and bitcoin goes to zero, well, you've lost one percent, right? But if you allocate 50 of your portfolio to bitcoin and it goes to zero, well, that's, that's a. That's a bad day in the office, right? So that's just my sort of take and view on just how we size that stuff up.
Dr Sandeep:But nonetheless, other people will say it has no inherent value. But for me, I mean, I get that. But I think, like you know, the the market agrees what the value of something is. Right, you know so. If somebody comes to one surgery and pays 100 pound for a composite and goes to another surgery and pays a grand for a composite, it's because of the value that the patient perceives, even if the composite is identical. You know so. Not that I think they would be, but you know just, uh, just the. The inherent value piece is what people pay for it to be right.
Dr Sandeep:So the market currently says Bitcoin is worth whatever it is today 67K or whatever it is. I told you I don't look at it every day. So then also, people say, oh, it costs electricity to produce. But again, if that's like an eco perspective, I totally respect it. If you're like, yeah, I'm not going to do it because I think spartan environment, I totally get it. But again, there are people that have outlined the, the thesis pro and against that, that argument um, ardently on the internet, so worth having a look.
Dr Sandeep:And then, of course, people say it's risky. But again, I've just sort of explained how I perceive risk. But yeah, it is risky. If volatility is, uh, what you equate to be risky, then yeah, it's one of the most riskiest things you could ever do. Then I'll start on the ball case. Yeah, so like, why would you, why would you I and what are the sort of pros? And again, like I'm I'm a technical price guy rather than like a massive.
Dr Sandeep:No, I'm not like some sort of bitcoin expert, but I just say that actually, what bitcoin really represents now I think, to many is like a like, like digital gold. You know it's a store of value. So you know we're talking about inflation, eroding purchasing power of our currencies and actually, you know I'm spoiling this, I want to say this later but actually, on average, bitcoin's gone up 50 every single year. It's existed. So you know, in fact, I had had some other charts as well, but I didn't want to go too deep into it. But if you compared bitcoin's performance against the s&p or against gold, or against nvidia or against anything. Pretty much the Bitcoin chart versus that, um, uh, bitcoin. Bitcoin's doing well. Basically, it's outperformed many, many things over this past period.
Dr Sandeep:So, um, then I'd also say that there's a fixed supply. So that's really quite interesting for you know, especially if you view it as a commodity, if you think Bitcoin is a commodity of sorts, there's only ever going to be 21 million, ever in existence. So you know, if everybody in the world wanted one, you couldn't have it. So there could be an existence and a reality in the future whereby the demand for it is such that people yeah, as today, people probably can't afford a whole bitcoin, just general people. But you can afford maybe like 0.1 of one. You know 0.1 of a bitcoin, but at some point, if you know trend continues, even 0.1 of a bitcoin may be out of many people's reach. So just the scarcity element, I think, gives it some value too.
Dr Sandeep:Um, bitcoin's market cap is 1.3 trillion, right roughly since last week, whenever I checked and that's still tiny compared to, like, gold, which is 15.8 trillion. And again, if you compare them to loads of other things, including individual stocks, it just still is a really small market. Does that mean we're early? I don't know. As mentioned. You know, price will. Price will say right, it's for me it's a game of probabilities and the etf approval. So, you know, for traditional money to be able to enter the market and get exposure to bitcoin without owning bitcoin because that was a barrier for entry from many, because to own bitcoin you need to keep it in a, in a in a hardware wallet or on a trusted exchange or some other third-party custody service all these things that you'd have to understand, and if you sent it to the wrong address it'll disappear, and so on and so forth but actually being able to get exposure through through these bitcoin etfs, um which you know, one of my friends was telling me that, um, the bitcoin etfs have been the most successful launch of any etf to date, uh, just in terms of how much money is inflowed in the short period that they've been live. So, nonetheless, I just think that actually you've got access now for people who otherwise couldn't access it. So, yeah, broadly, I think that just makes a lot of sense.
Dr Sandeep:And then, yeah, I want to share this chart, right? So this is like if we're just going to dream a bit and just say, ok, cool, what can we look at? What data can we look at to suggest where it could go? So sorry, I spoiled it. This is something I want to share. Before that First point, this chart is basically just showing Bitcoin after making a new high.
Dr Sandeep:So, after cracking its high in the cycle in 2012, after it broke the all time high so even if you didn't buy the bottom it then made its next high of 315%. And so then, after that high, when it cracked here in 2016, that cycle I was talking about, it went up 100% from there after the all-time high, and then from 2020, it went up 129% after the all-time high. And so now, at this current cycle, who knows, will it go 100%? Will it go 50%? Who knows, from this all-time high, will Bitcoin go from 70 to 140 or 100? Who knows, but we'll see. So there's just something to be said about just the typical trend that happens there.
Dr Sandeep:Then, yeah, back to my dreaming point, right, dreaming about what Bitcoin could do. So there's this very famous chart in the, the sort of bitcoin community, right? So if anyone wants to check this out, it's on. Look into bitcoin. They're free tools. Uh, really cool, really interesting. I'm going to share a bunch of them and just helps you make better decisions.
Dr Sandeep:So if you want to sell something, you can look at some of these stuff, or if you want to buy something, you can look at it and just say, okay, cool, based on these mathematical models, where are we? Are we closer to the top or closer to the bottom? So this one's called the bitcoin rainbow rainbow price chart. Right, and it obviously has the colors of the rainbow, and blue is cool, like it's goodbye, and and uh, red is when it's overbought and like really probably not goodbye, and this model indicates.
Dr Sandeep:I know it sounds outrageous, but they reckon, you know, this could go, you know, into like the 300k thing in this cycle, which is crazy to me. I don't think so, but who knows, right, who knows? Bitcoin surprised me before, you know, and there's another adage in the in bitcoin trading, which is it will go lower than you think and it will go higher than you think. So, no, just, whatever your assumptions are, they're probably wrong, because I've for me at least, that was certainly the case every time I thought this must be a top or this must be a bottom, I was certainly wrong. So, anyway, so the rainbow chart just has been you know, there's some sort of mathematical model underneath it you can really look into on their website, but that's where it predicts this thing could actually top out, before coming back to the blue and then going back to the red over time.
Dr Sandeep:The next one is called the bitcoin 200 week moving average heat map, and so what it depicts is like the bitcoin price so far, and then any place you see the blue dots, right, they're saying that's a good buy, and anytime you see the red stuff, it's like really overheated and probably not goodbye and probably a time to sell, right.
Dr Sandeep:So in the previous cycle cycle top, we only got to like an orangey, yellowy type of thing, so wasn't the most, you know, instructive in that, you know, if you didn't so at that point which again, we'll talk about exit strategies at the end um, then maybe you got caught off side if you're only using this model, but this isn't my preferred. This is just one to illustrate, right, what, what, what is possible, yeah, um, uh, oh, yeah. And then I was going to talk about this other thing as well that actually there's other people in the bitcoin community that talk about believe this or not the day that bitcoin is worth one million dollars each, and so the subdivision of a bitcoin is a satoshi, and so what the inference is is that they'll divide bitcoin into satoshis and each satoshi will be a dollar. So that's crazy, but this is just, you know, looking into the future, what people dream of and what they think could maybe just put that in context.
Dr James:There's a hundred million satoshis in a bitcoin right, if my math is correct not a hundred million.
Dr Sandeep:I think it's a million.
Dr James:I think it's a million okay, we're gonna have to look this up.
Dr Sandeep:I'm gonna yeah, we have to look it up, but nonetheless that nonetheless, without getting too much into the weeds, they're saying that if it gets to like a million per bitcoin, then they will subdivide it into another unit and each of those units would be a dollar and that's what the tradable thing would become yeah, it's.
Dr James:It's, uh, infinitely divisible. So they can. They can actually change it. You know, a satoshi could be the new denomination and there can be. They can create beneath that sandy. My bitcoin trivia was on point. Today it's a hundred million satoshis in a bitcoin ah, there you go, you're killer, killer, killer, killer.
Dr Sandeep:Like I said, I'm just a chart monkey man. Yeah, I just press red and green buttons for fun, so, um, yeah, all right. So now I'm going to get into, like some really sort of like, um, some uh, practical, practical things, you know, to help people now, right, so so you may be curious, now you may be in, or some. My take is actually, when we look at and compare investing versus trading, investing is pretty much you put the money in and you don't need to manage it, pretty much right, and you let the time pass, you let the market do its thing, right. And so, as from those previous charts, you know, some of these cycles are like 200 days, 100 days, 300 days, you know for like these. So you just don't do anything, you just let it do its thing. Um, trading, obviously is much more about trying to catch the swings of the market. So you know, as it comes down, you want to get in there, as it comes back up, you want to let it off there, you want to get out. Um, that, that that's cool and you're trying to. Yeah, I'd say that's more on a short to medium time frame, whereas investing is like a longer time horizon and you're ultimately trying to profit off of the volatility, yeah, and so that's fine.
Dr Sandeep:But for me I wouldn't recommend trading for for professionals, for dentists, who are very busy, you know we've got high demands. You know we've got a very disciplined lifestyle where you've got, you know you've got perform every day, then being distracted by your investment, you know, and again, that's going to be determined by your size. If it's a small amount, it's probably not going to bother you, but if you're over leverage, it really does affect and distract you from your day-to-day. So, been there, don't recommend it. So I'd certainly recommend that most sense is just invest. You know, again, not off. My recommendation do your research if it makes sense to invest rather than try and trade. So, and I'd also say, like you know, just trading is a very unique skillset. You know it's made. You know certain people are very, very good at it. They're just made for it. You know they love seeing the colors and the changing numbers and all the rest of it, and they're just made for it. Right, like, I just don't think the majority of us are, and I've seen many people fail.
Dr Sandeep:Then I'm going to just be super clear, because some people have obviously seen, majority of what I have is invested. Yeah, it's an investment stack. And then what I have is like, let's say, 10 or 20% whatever you want to call it of that stack which I'll trade with, and what that does for me personally. For me it's just good fun. I just enjoy it. I enjoy it and I'm not the worst at it so far in my latter third of the Bitcoin career, but for me it actually soothes an itch. So, um, for me it like actually soothes an itch. So if I'm feeling, you know, and I really want to take action, instead of me taking action with the whole investment portfolio only to be wrong and ruin it for yourself, I've got this trading stack that allows me to scratch that itch, so to speak. Yeah, and again, my time horizon for trades. I'm looking at the monthly candle, weekly candle, lowest daily candle. I don't really go in there anymore because I just don't have time to do that um, and so that's that's. That's really, um, how I just frame that before I start getting into um, you know, like, uh, some, some, some, some, uh, some recommendations, but again, recommendations to my younger self. Let me just put that disclaimer right.
Dr Sandeep:So again, first of all, how to invest, I say you've got to do your research, you've got to assess. Do you think bitcoin has legs? Do you believe in the technology and what it can represent to society at large? I really think that's an important, important thing, because when you have conviction, it's actually really quite easy to hold for the ups and downs. In fact, I have a friend friend of a friend actually, let's say and he's been in the market since I don't know 2017, 18, something like that, and he's never sold anything. So he's just riding the, you know, the 300 pump, and then the 85 down, and the, the 700 pump and the 85 down, and he's just been riding it. But he's got conviction because he thinks this is going to be technology that our children are going to be using. So that's that Anyway. So that does game us. So then, what are the strategies to invest? So our good friend Tony Kilcoyne in the Dentistry Invest group Shout out to Tony Kilcoyne let's go.
Dr James:Who to invest group? Shout out, let's go. Who knows if tony's a fan of the podcast?
Dr Sandeep:let's leave this in here and not tell him and see if he contacts us? Yeah, then we'll know if he's a fan or not, right? So, uh, tony recommends dollar cost averaging, right, and so, for those who don't know, it just means you set up a direct debit, every month, you allocate a certain amount, let's say 100 pounds, and every month, your direct debit just buys 100 pound of bitcoin every month. And so what that does? It just means, no matter what the price, you're always buying into the market and actually, over time, if we look back at that yearly chart, right, if you've done that, yeah, anywhere in this chart, let's just say, here, you would buy, here, buy here, buy, you can see my cursor, right, yep, you can. Yeah, so I'm just saying, if you was buying all the way up, you're still quids in. Like, dollar cost averaging certainly works, right. So, uh, there's, there's, there's, there's nothing wrong with uh, there's nothing wrong with dollar cost averaging. Certainly a great strategy, in fact, one I employ. So if you've got like a business and you want your business to procure bitcoin as well because of you know, you want to get into nitty-gritty of capital gains tax allowance for a personal versus how it would be treated as an investment through the company. You know, speak to a financial advisor about that kind of stuff. But it may work out better for you to do it that way. So then you could just automate it. So that's kind of what I have going on. Uh, through the company just makes sense to just dollar cost average.
Dr Sandeep:For me, the other alternative to a strategy is actually again looking back at that yearly chart. It's just I know this sounds outrageous, but you just whatever you want to invest let's say you want to invest 10 grand you just put it in, never look again until you know, until it hits your target number or whatever. So if we look at this price again, I'm only going to do from you know this upper half of the chart because we can't go back there. But if you just put it all in here, you would have been in. Let's say, you put it all in here at this make sense and the same on the next down year. So for all of those down years, even if you bought the top of that market so far, you would have been all right.
Dr Sandeep:So there is in fact some would argue that that one, one trunch, that one layer, that one, that one chunk in outperforms dollar cost averaging. Right, if you was, if the amounts were equitable, so that's the other thing. Then finally I'd say, um, I'd say so, I'm skipping ahead now. I'd say, like, the other way is like layering in. So say, like today, because it's 65k, and then you're saying, okay, I want to put 10 grand in as an example, and you say I'm going to put this in four chunks. So you put two, uh, two and a half grand in at 65k today, yeah, and then bitcoin sells off 20% and it's down at like 52k. You buy your next two and a half grand and then it sells off again another 20, 40, 40, uh, 40 grand. You put another next two and a half grand in. It may bounce from those levels. You may only get filled, you know, half of your allocation and you may have to add the rest on the all-time high break, or it breaks it and then it's, you're fully in a bear market and then, as it goes all the way down, you've just bought all the way down.
Dr Sandeep:Now look at my story as I illustrated before. If I just adopted that strategy early on, I would have really been reaping the benefits and perhaps we wouldn't even be on this podcast today. Right. Oh, dash my dreams, right. Little tear in my eye now. So, um, that's another way to do it. So just three ways to really get in right. So one is just dollar cost average, don't even look, just autopilot strategy. The other one is like a bit more ballsy. Yeah, you just go in and just don't look until everyone's screaming about it again, and then probably a good time still. And then the other way is just to layer in. So just divide your allocation, whatever you want to put in, and then divide it into four chunks and just get in today and then get in if it drops and get in if it drops and get in if it drops, and so on and so forth.
Dr Sandeep:So but often, you know I've shown you in those charts when people think it's going to come back and let them in, it just doesn't. And I've also said in some of my coverage in your group that actually the best Bitcoin breakouts, the strongest ones, they go and they don't let you get in. In fact, I took a trade and shared it. You know it was one of those I got in. Yeah, I could have got better entry, but it just didn't give him one and it just ran. So that's like the the best, the best breakouts. Not going to go too much into nitty-gritty or technicals how we can see that, but maybe for another day, yeah, so now I'm going to get on to uh, we've done how to invest, now I'm going to say how much to allocate, right. So, um, when it comes to how much to allocate, I mean, look, you've got to speak to a financial advisor, right?
Dr James:it's a deeply personal decision, but I would just this is the thing. This is the thing, right, because it all depends on goals and objectives, doesn't it? And that's why all these Sorry to jump in there, but that's why some of the stuff you see out there really annoys me right? It's really dangerous, because it's like people are like, yeah, go all in on X, y and Z, and it's like you're unable to say that with any precision whatsoever unless you know somebody's goals and objectives and where they currently are. To be able to plot the journey, you need to know the destination, you need to know at which position somebody starts. So yeah, man, it's. It's good that you put that little disclaimer in there. You know what I mean. What we're doing right now is we're just putting people in a place where they can do as much of that themselves as possible, which is obviously really cool, totally, man, totally, totally with you man.
Dr Sandeep:So, yeah, I mean, uh, once more I speak to your financial advisor, but, um, but like a kind of like, you know, with my friends or family you know one of my uncles, even there, I was um, chilling with him on saturday he's like, yeah, god, I'm gonna do it now. Then what should I do? And we set him up and he's like how much I put in? And I was like, listen, just put in whatever amount that if you lose it isn't gonna hurt you. Yeah, that's just my generic kind of like rule to him, right, and so I'd recommend that to any anyone listening. I give the same advice to my loved ones as I would to the market. Um, and again, like you know, an amount that lets you sleep as well. So you might say, oh, you know, I'll put five percent in my portfolio. If I lose it, I don't care, I can make another five percent. That's true, but if you're now, it's disturbing your sleep. That five percent is way too much, and I've been there as well, not fun. And then, yeah, that is probably how I'd say as well, like people who are over leveraged, it does affect your sleep, it affects other facets of your life. That's not the intention of this. I don't think anyway.
Dr Sandeep:And then I was going to come back to the risk part, right? So you know, we speak about risk and again, just this is important to how much to allocate Poison is dictated by its dose. So if you take a paracetamol, right, it's probably okay, it's therapeutic, but if you take 100 in one go, it's probably no good for you. Yeah, I think it's very similar regarding Bitcoin. You know, like 1% for somebody may be super therapeutic, whereas 10% may be therapeutic for somebody else, but for that same first person, 10% could be like pathological. You know, it could really hurt them, especially if they're wrong, you know, especially if we're all wrong, like who knows? So hopefully that just kind of gives some clarification and there's actually like a bit of I'd say it's become a meme at this point but some very, very smart people on the internet as well, some yeah, I'm not gonna fry out some economics economist's names right now, but they even, you know, postulate that not having one percent of bitcoin in your portfolio is riskier than having the one percent, because it's an asymmetric bet. Right, that the bet is if I have this one percent, I lose one percent, but if I'm right, I could gain ten percent or five percent. Nonetheless, it's an ace. The upside, you know, it's just greater than the downside. So that is their, their thesis that having one percent makes uh makes a lot of sense, rather than uh not having it.
Dr Sandeep:Okay, cool, I'm gonna now finish up. I've got just the final few charts and these are the tools that I've been using, you know, and I wish I had them before, but I just didn't know so much. I'm giving you some real alpha here. So let's talk about how to exit now. Let's just say you're in the market, you've layered in whatever happens next. You're in and then bitcoin does some craziness and goes 100k, 150k. Well, how do you know when to sell? Because you've seen it can go down 85 and maybe you don't want to hold through an 85 drawdown and then hold it through the next one. Maybe there isn't the next one, maybe this is the cycle top of cycle tops. So there's this uh strategy.
Dr Sandeep:I call it again. I share this with my friends. I call it the hot potato right, hot potato thirds right, and so I can't remember. I learned this from some other obviously smart person and it just basically goes like, let's say, you bought at like 30K and now it's at 60K and you've got that hot potato feeling. Yeah, I did this one recently for Solana. Solana just did a craziness from October to now and I was in at the same time, the 16, when because it's 16K, I think I was behind Solana at 16 and $20. That was pretty much my allocation, and what all I did is like, when it got like, that feeling was oh you know, I'm feeling awkward, I'm thinking about it too much. I just sold a third, yeah, so now I have two thirds left.
Dr Sandeep:And then it surprisingly just ran up again. I was like, oh damn, maybe I shouldn't have sold a third, but nonetheless, you cannot get that perfect. So then it ran up more and then I got a hot potato feeling again looking at the price. It looked toppy to me and I sold a third of that two thirds, yeah, so I'm still in, right. And then this thing ran up. You know, obviously, pull back. And then it ran up again and same thing now of that stack that's remaining. I sold a third of that. So by doing that, you're just always exposed to the market as it goes, every higher prices. So that's like a cool place. You know cool strategy. If, um, if you know, you want to just be able to soothe that itch, I think that's quite good for, like you know, no disrespect to anyone, but like emotional traders will probably do quite well on that. The other way, obviously, is, if you are quite emotional as well, or just in general, you will use data to help form those decisions.
Dr Sandeep:Then trying to call the top is very hard, but there is some data in the fact that Bitcoin is, you know, inverted commas on chain, like you say, it's said, distributed ledger technology. Why is decentralized? So everybody can view. You know the information is freely available. It's a record that is immutable. You cannot, you cannot, you cannot break it, you cannot change it, you cannot cheat it. So, as a result, using all that data that's on the Bitcoin chain, they can make mathematical models such as this one.
Dr Sandeep:So this is called the MVRVZ score. Again, it's on lookintobitcoincom and so this one is eerily accurate. If you look at the, you can see the price in the black. So obviously we see the Bitcoin price trending upwards. And then there's another chart below it, this orange line, and what it shows is movements of Bitcoin on the chain. So that's as far as my rudimentary understanding goes. But if we just look at the bitcoin tops, you can see that that mvrv score is crazy. It's in that red zone at the top. So, for people who are listening, there's a green at the bottom which tells us when it's probably a goodbye, and then there's this red at the bottom, this band at the top sorry red band at the top which shows us that it's probably a good time to move out. And actually it's been eerily accurate for all of the bitcoin tops. So if the mvrv score starts to go quite close to the red and you're feeling uncomfortable, maybe trim some off. So I wish I knew that in prior cycles, because it would have saved me a whole world of pain.
Dr Sandeep:And the second model that I think is probably even easier to use it's called the bitcoin investor tool. Yeah, two-year ma multiplier. And so there are two lines on it. There's a green line and there's a red line following bitcoin's price. The green one is at the bottom boundary, shall we say, and the red one's on the upper end.
Dr Sandeep:Now, anytime bitcoin was above that red line, yeah, it was a good time to take some off or start selling, yeah, and if you did that during you know any of these cycles, it would have worked out quite well for you, especially this um the two, the twenty thousand dollar cycle top. It probably would have told you to start getting out like 10. You might have taken some off at 10, 12, 14, 16, 18, 20. Yeah, you're still well quids in, you know, you're still well quids in. So I think that works really well. And then you've got the green band, which again remember, where I was puking my positions at the 3k mark, at the 6k mark. If I had this tool there it would have told me I shouldn't be a seller, I should actually be a buyer. So hopefully that's just some um, interesting alpha and how I would approach the market now.
Dr Sandeep:And then I just finish off with one little adage from warren buffett right, one of our favorites, James, and it goes be fearful when others are greedy and be greedy when others are fearful. So that's a famous warren buffett quote. And actually, interestingly, this local high, what we're experiencing now. A few posts ago, in your group again, when all coins were doing craziness yeah, they, you know again, I actually said that. I said I could be wrong here. I said, but I've seen this before what all coins do craziness at these interim tops because obviously all coins do perform, you know, in clusters and across sectors they do perform, but in bursts, yeah, and then later on they have this sort of what I've observed. This is broader market move where they all move right. Money moves from bitcoin to altcoins, what they call alt season, and typically that happens after bitcoins uh, topped, but nonetheless you see all coins go crazy at these tops and local tops and um, interim things.
Dr James:So yeah, once again, be fearful when others are greedy and be greedy when others are fearful zing, and you know what I love that quote as well and it's very true, very true, by the great warren buffett. And you know what Sunny and I were talking off camera just before we hit the record button. We were talking about books that we like whenever it comes to trading and if anybody wants to really expand their trading knowledge technical analysis in the financial markets and I can't remember who that book is by, but it's right, oh, john murphy, john murphy, it just came to me. Really cool book. If anybody wants to brush up on this stuff. You know you'll see trading invest in a whole new way.
Dr James:We don't advocate following any strategy to the letter, but certainly it's a good framework through which to expand your knowledge. And you know, the deeper and deeper you go down the trading rabbit hole is, the more and more you realize that actually the only way you can make money is if you take it from someone else. Basically, right. So if you're doing the same shit as everybody else, well, chances are you're not going to make any money, right, because it's the 10%, who are maybe thinking a little counterintuitively, that are there cleaning up. And it's very important to just have that mindset whenever you go into this stuff Very, very, very cool.
