1️⃣ Over time, news has less and less impact on the market, especially if it’s the same information (ETF applications, GBTC on Coinbase, the German government dumping bitcoins, Mt. Gox, SEC lawsuits, etc.)
I’m sure most of you don’t remember what happened with the German government and Mt. Gox, even though the market collapsed because of them just a month ago.
2️⃣ News is priced in more efficiently than unexpected events. For example, 'X will happen on date Y in the future' is more likely to be priced in than 'URGENT: Y just happened.'
Before continuing, news is always priced in. First, the price makes a move, then the news comes out. It's just a fact; there are insiders, and I've already written about this.
3️⃣ The market's reaction to news is often more indicative than the news itself.
Here's what I noticed and wrote down for myself:
Bad news, absorbed by the bull market = continuation of the trend
Bad news, absorbed by the bear market = trend reversal;
Good news, absorbed by the bull market = trend reversal;
Good news, absorbed by the bear market = continuation of the trend;
As always, there's a lot of context and nuance around this material, but it's a worthy way to start thinking about it, finding patterns, and finally stop panicking due to emotions in the market!
