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$89K and Climbing: Why Risk Reduction Is Key to Long-Term Success

Bitcoin makes a new all-time high at almost $90k. In this post, I give my thoughts on how investors can make sense of this price.

$89K and Climbing: Why Risk Reduction Is Key to Long-Term Success

💵 Welcome to the Bitcoin newsletter for long-term wealth creators.

📈 Bitcoin Price - 3 Months

Source: https://www.bitcoinmagazinepro.com/bitcoin-price-live/

🌡️ Bitcoin Temperature

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1: Extreme Fear - 5: Extreme Greed
Be greedy when there is fear in the market and fearful when there is greed.

This article explains how to use the Bitcoin temperature to make your Bitcoin investment decisions. The Bitcoin Temperature is now available on my website and updated every Wednesday.
Source: https://www.sandeepgoenka.com/btc-metrics/btc-temperature
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The Bitcoin temperature has entered the Greed zone. It's in a range where one can consider selling Bitcoin to create liquidity for the mid-term (up to 2-3 years) requirements. One way to do this is to sell Bitcoin periodically by dollar-cost-averaging your selling.
Source: Source: https://www.sandeepgoenka.com/btc-metrics/btc-temperature

🥊 Bitcoin Vs. Other Assets

Source: https://www.sandeepgoenka.com/btc-metrics/btc-vs-other-assets

Bitcoin Google Search Trend

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Bitcoin search is rising rapidly. This shows that retail interest is back. This shows signs of a market that is in the Greed zone.

Some of you contacted me after yesterday's newsletter post because you were confused—am I suggesting you book profits? Have I lost my long-term conviction in Bitcoin? None of this is true.

I want to clarify what I meant. My advice was based solely on risk management.

Once you are convinced of Bitcoin's long-term potential, use the Bitcoin Temperature to manage your short (up to 3– 6 months) and medium-term (up to 2-4 years) risk of of your finances.

I strongly believe in Bitcoin's long-term potential and that it will be one of the best-performing assets over the next 10 years. To ensure you are a long-term investor, you must not be forced to sell Bitcoin at low prices. To ensure this, you need liquidity to handle your money requirements, expenses, and emergencies.

If you do not have this liquidity, or worse, if you have a high-risk debt (not all debts are high-risk debts), then you should have the humility to accept that even though Bitcoin looks bullish, anything can happen in the future. At the current Bitcoin temperature, it's an opportunity to pay off your "high-risk" debts and create liquidity for the short to medium term.

If you already have this liquidity because you have enough cash in hand or have other less volatile investments that you can encash if needed for the next 2-4 years, then you don't need to do anything at the current Bitcoin Temperature.

On the other hand, with the Bitcoin Temperature at 3.7, it is clearly in the Greed zone. Although I don't know what will happen to Bitcoin's price in the short to medium term, I am bullish about the price going much higher.

However, I suggest reducing risk in one's financial portfolio at the current temperature. If your financial portfolio is risk-free, you have no leverage, and enough cash for 2-4 years, based on your risk appetite, sit back and enjoy the ride.

This is a fast-moving, dynamic period in Bitcoin's cycle that occurs once every 3-5 years. If you need help with your Bitcoin decisions, please contact me at sandeep@sandeepgoenka.com.

See you at 90k soon :).

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See you in the next block.
Sandeep Goenka

DISCLAIMER: I am not a certified financial advisor. This newsletter should not be considered financial advice and is for information purposes only. Please do your research.

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