Buying when the market is in fear is the best way to be profitable (and sane) in crypto

OK, most will say "thank you mr. Obvious", but by fear I mean significant lows, like the 30K level (~50W SMA) back in May-July and 40K (20W SMA) during September.

Maybe the title is oversimplifying the subject a bit, and maybe I am still inexperienced to express such absolute statements. But, what I have learnt till now is that for someone to be in crypto, they have experienced FOMO and greed, and this is what brought them to the space. This creates a euphoric mindset when we are in a wild bull run; you believe everything will just go up forever, you are filled with greed, and - especially if you have no prior investing experience - you are making decisions based on emotions rather than some long term strategy and pre-defined goals and exit points.

I first entered the crypto space in January, pure FOMO. However, my first decision was a good one: I used an amount I was comfortable with losing if everything went south to buy ETH. My rationale was, Bitcoin was already through the roof and ETH could one day pull out something similar. Yeah, I know. The outsider's view, where ETH could flip Bitcoin overnight or be worth 40K in a couple of months.

Regardless, this would have been a good decision if I just sticked to it and not try to take advantage of the bull run by day/swing trading. This investment would still be over 3x today. But suddenly, I saw other altcoins pump like crazy and thought "if buying crypto is a way of putting your fiat money to work for you, why not trade my ETH for some other altcoins which pump a lot". And then, it's also the fear factor: I got in with the mindset that, any given moment, it would crash like it did in 2017/18. I studied those charts and found parallels to the rally in December/January this year, so when the correction from 42K to 29K came, of course I panic sold in a loss.

During the next couple of months, I slowly started to grow my knowledge on the crypto market. I discovered credible and quality analysts like Benjamin Cowen, I started to read about each project, about the different technologies, about market cycles, about several models that try to predict how the market will go. I also broadened my investment knowledge. I was still in a loss though, and was always in a frenzy till May, because FOMO when you are in the red is very bad, especially when you know you could have been in the green with just your first buy. I did pour more money in but not in an emotionless or in any intelligent DCA way but mostly FOMOing and trying to get even. At some point, I had that free month of Delta app trial that calculated the amount of fees I paid, and it was insane!

So, all this education came to fruition sometime in April. Thanks to VET and then MATIC, I had managed to break somewhat even, I rode the ETH May-train also, but not from the start, and then I sold when BTC lost support of the bull market support band at 46K and watched it go slowly down going into the May 19th crash. And this was my second chance to do things right.

I used my capital - initial January big chunk along with the subsequent impulsive DCAs - to buy, mostly BTC, ETH and ADA, from May to July. The downtrend back then was pretty predictable so I tried to buy at the bottom when it seemed BTC was reversing the short term downtrend. I continued to DCA twice a month and decided I would do intelligent DCAing instead, that is move the money to the exchange but don't buy unless it is a really red day, depending on the market climate. When BTC broke in August, my last DCA was at around 37K-38K. When it moved into 50K I decided to wait until BTC had a correction to buy again. I also decided to sell when a heavy rejection came. And I did at 52300 (one of the best decisions I have made), with intention to DCA this capital back in slowly after BTC stabilized. I thought about just waiting for it to go back to the 20W SMA, but I was not sure it would happen so I DCAed a percentage when it bounced at the 8W and the rest when it first tested the 20W SMA. I also did an additional buy (brought my future DCAs earlier) the next two times BTC tested 40K. My thinking was, if we are going up this is the best prices we will see for several months. If we are not holding 40K, well, then let's sell when we lose this support to realize profits and buy back in in the 30s.

Right now, I have set up my positions for the rest of the market cycle and I will be DCAing in but not trading what I already have. As we moved away from 40K, while we are not guaranteed not to test 41K or 40K again, I feel fairly calm and emotion-less in my decision making, similar to when we moved away from 30K in August and I calmly decided to sell at 52300 when BTC was rejected at 53K. I have not checked charts of my holdings since October the 1st (other than checking BTC price a bit). My plan is to dive into some charts and technicals only prior to my DCAs to decide on what to buy at that time. I know BTC can crash at any moment because it is still crypto, but I do not believe it is likely.

TL; DR: When fear is extreme and BTC (and the crypto market in general) is on the edge of collapsing, e.g. 30K after the May 19th or testing of the 20W SMA (40K) during September, is the best time to buy if you want to have a calm perspective, limited FOMO and most profits. It might be stressful in the short term, but it is the best approach for the long term.