My thoughts on crypto

I always believed - and still do - that 5% of your total worth has to be invested in GOLD. When crypto was introduced (not back in 2008, but sometime in 2017-2018) to mainstream media and each household as the topic of discussion - I believed - we should at least nibble with 1% of total worth in it. That 1% was taken away from GOLD allocation and it was insignificant to your overall worth but good enough allocation to a new asset class to begin with. 

When Bitcoin was flying each day from 10,000$ to 18,000$ - it did felt amazing, but when it tanked from 18000$ to 3,000$ it felt miserable. But losing 70% from 1% of your worth did not created a dent. Good time to pick it back up was when it crossed the milestone of 10,000$. I did mention it to our advanced trading group in Whatsapp that's the time to get back in. It was worth it to see it fly from 10,000$ to 60,000$. 

Bitcoin consolidated a bit and was unable to form higher highs and I got out and sold all my crypto allocation when it was 56000$. It felt bad initially - as I saw Bitcoin went to 62000$ after I sold it, and based on chart analysis - I said to myself - if it crosses 66000$ - I must get back in. Fortunately it didn't and then it was a falling knife until it hit 30,000$. 

Another area which might have been a great entry to see it get back to 60,000$. I traded a bit from 30K to 34K, 38K to 44K, 50K to 54K but those were all small trades and I was taking profit for 10-20-30% gains. Today, as of now, I do not own any Bitcoin or any other crypto and hesitant to do so as Fed is tapering. It would be difficult for crypto to find new money going forward. However, there is a general consensus that Bitcoin will see 100,000$ mark in near future. 

I may trade Bitcoin if it crosses 66000$ in near future as next step would be 78000$ but apart from that I would be hesitant to invest in Crypto at this point. Its about "Risk-Reward" and although there is a chance that Bitcoin can go from 47K to 100K (that's just 100% return). However, Bitcoin becomes interesting to me if it goes near 20K (because then from 20K to 100K would be 500% return and that would be worth the risk). I may not go all in at 20K but I would certainly initiate a position at 20K and continue to dollar cost average until it hit 10K and by 10K - I would have my full position (the one that I sold when it was at 56000) with Stop Loss of 7,500$. If Bitcoin goes below 7,500$ that would be bye bye moment.