If you look at the news, everyday you see analysts predicting the economy to go down or up. There are valid arguments on both camps most of the time:
Geopolitical tension in Ukraine and now Taiwan threaten to destabilise the already weak market. COVID resurgence, Fed easing and rising interest rates, it does look like the economy is going to get worse.
Nevertheless, jobless rates are now at its lowest for decades. COVID has become a part of life. Geopolitical tensions though still present seem to already be factored into market prices. Thus we are recently seeing a slight pickup in the market.
What does this all mean? Are we now headed to a recovery? Or will it still get worse as some analysts predicted? The real answer to this as always is: Nobody knows. There are always multiple factors at play and almost all of them are unpredictable and beyond anyone’s control. What we can do to get a better guesstimate is to look at the price chart history to get a feel for whether prices are reasonable or not.
Just take note of three things when looking at price charts:
1. History – looking at past prices will give you an indication if current price is high or low by comparison. However, take note that past prices are not an indication of future prices. Even if the price is at its lowest point in years, this does not mean it will not go down further. Conversely, even if the price is at its highest in years, that does not mean it will stop going up. Looking at historical prices can help in your decision making but you should look not rely on it solely.
2. Time Frame – Unless you are an experienced day trader or scalper who buys and sells multiple financial instruments within the day, I recommend you look at higher time frames. Instead of just looking at historical prices from a day or a week ago, look at prices from the last few years to get a bigger picture. Too often people make decisions based on short term prices which clouds their thinking.
3. Look at Fundamentals – Even though you are making decisions based on price charts, I would still take fundamentals into consideration. These include geopolitical and economic activities that may affect price, leadership movement, project plans, achievements and milestones that may affect price, etc. This will help to make a more informed decision
Now that you have analysed the charts, should I go all in?
This decision really depends on how much investable income you have. My own personal take on what is happening in the market and what I believe people should do are listed below. Take note that this is my personal opinion and you should make decisions based on your own circumstances. With that out of the way, here is what ai believe people should do:
1. Buy – yes there is a possibility that prices will further go down. But there is also a possibility that we are already at the bottom and price will go up. As far as crypto is concerned, we have not seen these low prices for years so I believe now is a good time to buy. if you bought crypto when the market is at its peak, why not buy again now when the market is very low?
2. DCA (Dollar Cost Averaging) – this means investing a fixed amount you are comfortable with on a regular basis (e.g. monthly). I am a big fan of this as it removes the emotion and guesswork and keeps you invested. It also lowers the risk as you are not putting your money all in at one point in time, Therefore, if price goes down further, this will be covered when you buy again the following month.
In summary, I believe that now is the time to start buying again. Signs of recovery are starting to show. However, if you do decide to buy, I recommend that you DCA instead of putting your money in one lump sum as there is still the possibility that prices will become worse that]n they are now.
In other news, I am happy to say that I am back in the pink of health after a bout with COVID. Despite this scare, we were able to continue with WISH Pool’s maintenance all throughout the ordeal and never lost a block. In fact, we are now seeing a spate of good luck with the pool minting a lot of blocks steadily at > 100% luck for 3 epoch now. We know this will not last but we are enjoying every minute of it right now.
Also, we have completed our donation for this month:
WISH Pool is the creator of Cardano SPOT Check, an online resource for Cardano Stake Pool Operators for maintaining their nodes. We are part of the Ardana ISPO and were a recipient of the IOG delegation in 2021 and the Cardano Foundation delegation in 2022. If you like this article, we greatly appreciate if you will delegate your ADA to WISH Pool. You will be earning interest rewards while j helping the lives of disadvantaged children. This is because we pledge to give at least 10% of our own profit to educational charities so that successful students can help get their families out of poverty. Let’s help grow the community together!