Someone who panic sell there bitcoin because of a dip is definitely making a mistake, because when there is a dip in the price of bitcoin it presents an opportunity for us to accumulate more with a different and more convenient price as well, but I most say it is more common with someone who is new into bitcoin, or probably doesn’t have a little basic knowledge to panic sell at this point in time
You are right ,most people that panic and sell their bitcoins are probably traders which maybe short term investors, when there is dip many investors view it as a chance to purchase Bitcoin at a lower price forgetting that it should be an avenue to accumulate more and hold rather than selling it,but they don’t know that Bitcoin value fluctuate rapidly,but they would be the once to regret later.You explanation of volatility, BTC prices and supply/demand is a we bit confusing Samlucky O.
Generally speaking volatility relates to BTC price movements measured over time, and so if the BTC price is moving a large amount over a short period of time, then it would be considered to be volatile, and so volatility can be in either direction or both directions, and it can be compared with other assets and/or currencies to say BTC price movements are more volatile or less volatile than some other comparative asset over some given period of time.
Your proclamation that high or low volatility has to do with BTC price direction is not correct, since high volatility would be the BTC price moving a lot over a given period of time, and low volatility would be the BTC price not moving very much over a given period of time, and whether volatility is high or low does not have to do with BTC's price direction.
Supply and demand may or may not relate to BTC volatility... Of course, if the BTC price is moving a lot then supply and demand might be changing during such period, so if the demand is increasing faster than the supply, then the price is going to go up, and when the price goes up, then it is likely that more supply will come online to account for the increase in price, yet if sentiment is that BTC price is going to continue to go up, then perhaps more supply would not come online even if the BTC price is going up.
Supply can sometimes be manipulated by big players or BTC holder sentiment about bitcoin's price direction can affect the extent to which they put more BTC on the market. Of course, with BTC supply is supposed to be fixed at 21 million, and not all of the coins have been issued yet, so there is ONLY around 19.5 million BTC on the market, and several million of those are speculated to be lost or otherwise no longer accessible by the previous owner (someone who should have the private key might have lost it or purposefully burned such coins, such as dying with them).
At the same time there have been a considerable number of bitcoin derivative products or even third party holders of BTC that contribute towards bitcoin transactions that are not being confirmed on-chain, and to the extent that the derivative products are not backed 1 to 1 or being confirmed onchain, then there are seemingly decently good odds that there are more claims to bitcoin than exist. In other words, more bitcoin are being created than exist through some third party services and/or products, which dilutes the supply and affects the BTC price and even sometimes the service will get caught with their pants down and not having as many bitcoin as they claim to have, which yes could artificially move the BTC price in one direction or another.. of course, increased supply would end up putting downward pressure BTC prices.
Of course, anyone with good cashflow management will be in a better position to deal with high levels of bitcoin price volatility, even if something like a downturn ends up lasting for a long time... yet of course, there is some psychological component too, that might follow from how well that cashflow management systems have been set up, since if a person over invests or contributes to his own expectations of BTC price moves (that end up being wrong), then he may well end up becoming emotional about his investment when he expected the BTC price to go up, yet it ends up going down.. so maybe instead of ongoing buying, he starts to hesitate in his buys and he might even go a step worse by selling some or all of his bitcoin expecting to either buy back at cheaper prices (or to save himself from further BTC price dips, that might not end up happening).
I totally agree with you and normally stable source of income is suppose to make one not to sell when there is fluctuation and discipline, target and determination play an important role here. Some people can do sell there investment even when there is no fluctuation in the market because they are not discipline, they don't have target but if someone has a target and he or she is discipline whether there is stable source of income or not they will keep holding accumulating because they will be determined to hit there desire target that is to say that selling when there is fluctuation is a mindset and a choice.
Knowledge brings needed resolve to continue to hodl appropriately and not drop your bags on the get-go.Fluctuations are normal, dips and corrections - too.
They are part of the process
It’s not bad also to partially take profit and re-invest later on as part of rewarding yourself so that you will not think on your investment most of the time especially when the price is increasing.
This is a slippery slope mindset, especially for newbies, to either slow down in their BTC accumulation or to develop expectations that they are going to be able to sell and buy back cheaper and to be better by engaging in such a trading approach rather than ongoingly continuing to accumulate BTC until they have had reached enough or more than enough... which could take a couple of cycles before many guys are even close to reaching such an accumulation strategy that selling might even become part of their way of managing their bitcoin holdings.
I am not opposed to the idea of selling on the way up and buying on the way up, yet it seems to me that any amounts of BTC that are sold should be so small that they are without expectations of buying back cheaper... even when a guy reaches overaccumulation status, whenever he sells BTC he should not be expecting to buy back cheaper, unless he really has reached a status that he is ONLY selling clear and unambiguously overaccumulated coins.. , which I understand is not a clear description, so guys have to figure out these kinds of formulas so that they do not end up in a situation where they had sold too much of their BTC too soon, which has historically been common in bitcoin.