Editor's note: When you invest in cryptocurrencies, keeping the right perspective is key... It's easy to get bogged down by short-term market "noise." But if you want to keep your peace of mind, you must learn to tune out distractions and stay focused on the long term. This skill is especially critical right now, as cryptos have been on a tear this year – making many investors wonder when this uptrend will reverse. That's why Crypto Capital editor Eric Wade believes it's crucial for you to understand why viewing cryptos as long-term investments is the proper mindset for today's market. In today's Masters Series, adapted from the March 1 Crypto Capital weekly update, Eric explains why investors shouldn't be concerned about bitcoin being overbought right now... details how history shows this overheated rally could create a huge moneymaking opportunity for patient investors... and discusses why it's important for you to keep your emotions out of your investment strategy...
Why I'm Not Worried About the Overbought Bitcoin Boom By Eric Wade, editor, Crypto Capital Bitcoin has continued its rally. And if you follow the cryptocurrency markets, you might be feeling like the boom is due for a pullback... According to the relative strength index ("RSI"), that may be true. This indicator neared all-time-high readings recently. But this isn't the fear investors should focus on today. As I'll explain, the RSI often sends mixed signals when it comes to bitcoin. That makes it an unreliable measure in this market. Instead, you should be worrying about a different risk entirely... It's a concern for all types of investments – but it's especially important for bitcoin right now. And it matters a lot more than an individual trading signal. So, let's jump in... The RSI is useful for many kinds of trading. It can tell us when an asset is gearing up for a reversal. When an asset is "oversold," it means a rally is likely. That's because by then, no one is left to sell. On the other hand, an "overbought" reading shows that too many folks have already bought in... And that usually means prices have nowhere to go but down. But for bitcoin investors, the RSI might send the most mixed messages of any indicator out there. Bitcoin has strayed into overbought levels before – and many times, prices still went up. Just think back to when bitcoin rallied from below $16,000 in November 2022 to more than $23,000 in January 2023. The RSI had surged to more than 90 at that time, which is very high. Or consider August 2023, when the RSI made a "low" of 18. Bitcoin was trading for around $26,100 then – about $3,000 higher than when the RSI had peaked. From there, the RSI went on to peak again in October 2023 when bitcoin rallied to more than $34,000... and then again in December when bitcoin rallied to $43,000. This year, the RSI peaked in March when bitcoin hit $73,000. You get the picture... Listening to the RSI would have kept you from the gains that followed when it soared to those levels. Not only that, but the RSI is best used as a trading tool for short-term market moves... Investing is different from trading. If you're looking for short-term gains, then moving your money based on short-term signals makes sense. If you're looking at bitcoin as a long-term investment, though – if you're buying to hold for a long time or are continuously adding more every week – then an "overbought" signal won't make as much of a difference to you. So, yes... bitcoin is often overbought. But it's also true that if cryptocurrency values continue to soar over time, holding it stands to make you a considerable amount of money. That's why I view bitcoin as a long-term investment. The latest bitcoin boom is the one we've been waiting for. That means we should expect significant gains... But we should also expect volatility. The recent RSI reading supports this. What I'm more concerned about during this rally is a different risk entirely. And if you're a long-term bitcoin investor, you need to be ready for it... You need to psychologically prepare yourself for the fear of missing out. This fear can take many forms. First, you may start to resent the cash you keep on hand. But it's important to have reserves of "dry powder"... Bitcoin investors went from "buying the dip" to an all-out boom pretty darn quickly. But even in a rally, bitcoin can go through 30% to 40% sell-offs. So, we may have more dips to buy from here – and that dry powder will be useful. Second, the fear of missing out can also lead you to buy something that's too hot... You might be tempted to overpay for coins. Overpaying can work itself out in a bull rally... But it can also make you feel downright stupid if you buy something and then a sell-off leads to better prices. Fast-moving prices can easily lead you to buy or sell based on emotion. And that's a big mistake. So, keep emotions out of your investment plan – and don't let the RSI shake you out of bitcoin today... Hold on for the long term, and enjoy the rally. Bitcoin can easily soar to all-time highs from here. Good investing, Eric Wade
Editor's note: This bitcoin boom isn't the only development we're keeping track of right now. Eric says a once-in-four-years event is fully guaranteed to take place on April 19. And he believes this shift will create the opportunity for massive gains... That's why he recently went on camera to reveal how you can capitalize on this unique setup. Catch up on the full details here... | 
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