Understanding the Rule of the Best Trading Days

On September 28, Fundstrat co-founder Thomas Lee shared a crucial statistic on Twitter: a significant portion of Bitcoin’s gains are accumulated during just ten trading days each year and selling during less favorable times can be a costly mistake.

What the Numbers Say

In a classic case of unreliable short-term trading, Bitcoin’s most significant price movements come in a mere handful of days. For example, during the bull market of 2017, the crypto climbed an astonishing 1,136% during those ten days. Even in the bear market of 2018, a still-impressive 66% gain was recorded.

The Downside of Excluding the Best Days

Yet, it’s essential to look at the complete picture. Ignoring these ten pivotal days results in quite a different narrative. From 2013 onwards, Bitcoin experienced an average annual decline of 25% on the remaining trading days:

• 2013: Loss of 199%
• 2014: Loss of 133%
• 2018: Loss of 140%
• 2017: A more favorable overall gain of 232%

This reveals a critical insight: without those stellar ten days, a trader’s portfolio could resemble a rollercoaster ride of emotions—and not a fun one!

Emotional Trading: A Double-Edged Sword

Lee’s pointed question, “Are you that good at trading?” serves as a sobering reminder that timing the market with precision is not just a daunting task; it’s a near-impossible one for even seasoned traders. Emotional decisions can lead to panic-selling, a mistake many have made before.

The Case for Holding On

Given this pattern, it seems that a more straightforward approach—buying and holding—might be worthwhile. The crypto market can be unpredictable, rife with fluctuations, particularly during what Lee hints could be another crypto winter.

Present-Day Bitcoin: Riding the Rollercoaster

At the moment, Bitcoin hovers around the $8000 mark, suggesting an approximate gain of 110% year-to-date. This trajectory is undoubtedly promising for holders, but as history teaches us, it’s essential to keep an eye on the bigger picture.

Institutional Trust Could be Key

As reported previously, Lee has expressed optimism for Bitcoin’s future, citing that the launch of institutional trading platforms like Bakkt could provide the grocery store of trust that cryptocurrency needs to gain wider acceptance.

Final Thoughts: Steer Clear of the Panic

The bottom line? When in doubt, think twice before hitting that panic sell button, because as they say, the best days for Bitcoin are often right around the corner. Maintain your patience, avoid emotional decisions, and remember: sometimes it’s wiser to just hold on tight!