A Better Bottom, Somehow Worse

Psychologists have found that it can be easier to adapt to something dramatic than to a persistent minor irritation. Breaking your leg, for example, may be psychologically easier than tweaking your knee. Your “psychological immune system” mobilizes for the big thing. The annoyance just keeps annoying.

If we’re near a bottom, numerically, this bear market is much better. GDLC, roughly a composite of the top five cryptos, is down ~30% this year and ~53% from its peak. Last cycle: ~88%.

But GDLC is now an ETP and trades more efficiently, so the cleaner comparison is realized volatility (60-day): ~38% today versus ~86% last cycle.

If this is the bottom, it’s decidedly milder.

And yet people seem to hate this bear market more. Psychologically, we may have traded the broken leg for the tweaked knee.

Your portfolio should probably send a thank-you note.

Happy Trading!

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