Making Sense of Price Movements

Whenever prices change quickly, there will be people trying to explain why. This bear market is no different, and I've been puzzling over the rapid reversal of sentiment among cryptocurrency investors. While I don't presume to know why the market acts the way it does, I do recognize that as an average investor, some of the thoughts that go through my head must be going through others' heads as well.

Greater distinction between tokens I bought for speculation and those I bought as a long term hold

Basically, those tokens that have lost a lot of value compared to the USD where I think, "this is amazing, I can buy more!" are the ones I really understand and profit from long term. DGD is one token I hold where this is the case-Digix is a solid company with one of the top teams in crypto, and they hold a massive warchest of 465 thousand Ether. That's right, they haven't touched their crowdsale raise from 2016! With version 2.0 of their gold token, DGX, set to be released in the fall, and essentially a copy paste ability to then move to silver tokens or any other precious metals they want, DGD is set for real success. Further, owning their token allows holders to receive rewards depending on how much DGX is owned and traded.

Ether is another token I'm eager to buy more of at these prices. Ethereum remains the most widely used smart contract blockchain by a huge margin, with incredibly talented leadership. It has literally been crushed under its own success as ICOs have found it to be such a capable crowd funding platform. ETH is required to power this computer and while we wait for Proof of Stake to be completed by the developers, the cost of gas is rising, which should put some upward pressure on ETH. Will another smart contract platform come along and dethrone ETH? Maybe so-EOS and Tezos are both hungry to do so, but their giant crowdsales have put me off from investing so far. Rather, I think unless we see a black swan event, Ethereum will rule the smart contract world for the next 5-10 years. Their momentum is just huge.

Buy with what?

Thankfully, I put some of my earnings from crypto into cash last month-I started to rebalance my portfolio and put money into my retirement accounts and emergency funds. It gave me a lot of peace of mind this past month when my crypto portfolio dropped by 40% from its ATH, and I reserved some of that cash to buy back in. Market timing? No. Lucky timing? Absolutely.

Making Sense of it All

Really, I can't, and I don't. I'm this guy:

¯_(ツ)_/¯

I don't like when CNBC tries to explain essentially random stock market movements with confidence. Now, sometimes, you'll see something big enough, like last year's Brexit, to understand price movements. But too often, we convince ourselves we know why the price moved, when it's really guesses that we can't support with evidence. So again, while I'm eager to buy those tokens listed above, because they're at a lower price than previously, I don't try to explain it. I know there is a bear market and lots more people are selling than buying. I know, also, that this is generally a better time to be able to buy than be forced to sell. Finally, I know that tomorrow's price can only be guessed at. So, if I do buy some tokens, they better be ones I'm comfortable holding if the price goes down.

Reminder: I'm not a professional; I'm the dumb money, the average investor. This is what goes through my mind. Do your own due diligence. I hope this is one of many articles you read on what to do with crypto. Also, I own DGD and ETH, and plan to for a long time.