Crypto Bull Run Starting Again - How To Cash Out?
Table Of Content
No body’s got a tarot card reader on the cryptos - but I did make some handsome returns during the 2017 bull run, the DOGE and SHIB pump (thankfully sold before the dump).
This is definitely not a finance advice - but let’s have fun at least exploring what’s happening in the crypto world these days.
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1. If it’s falling it will rise too
Bitcoin reached its all-time high (ATH) of $67,566.83 on November 8, 2021. This peaked the most recent crypto bull run, which began in late 2020.
Guess where are we at today? The “late” 2023.
No one can truly predict if a bull run is coming or not... but, we can at least analyze it and get ready for it:
Educate yourself about cryptocurrencies and blockchain technology.
Invest wisely Don't put all your eggs in one basket.
Be patient Crypto bull runs don't happen overnight.
Number of Bitcoin millionaire wallets triples in 2023. (read more)
2. Understanding market cycles
It’s all about study, not about luck or hope.
What matters most while trading?
Entry and exit: even after selecting the perfect coins, if you enter the market at the wrong time it’s just a blunder.
Psychology: Trading can be a psychological roller coaster. You need to be able to manage your emotions and stay calm under pressure even if you are on the profit side
Diversify your crypto portfolio: Invest in a variety of different cryptocurrencies, including large-cap coins, small-cap coins, or different sectors, such as DeFi, NFTs, and Web3.
If you understand the game when to enter the market and when to exit you already won the game.
My strategy - when it comes to crypto - has always been to dollar cost average on the coins I trust (BTC and ETH) and take some consistent risks on meme coins (DOGE and SHIB). I use RobinHood and CoinBase for my crypto investments.
Bitcoin is now worth over $34,500 — but will it hold? (read more)
3. Blockchain/Crypto investment 101
Blockchain is a distributed ledger system that can be used to record and track transactions of any kind, not just cryptocurrency transactions or not a money-making scheme.
Trading for more than 10 years in crypto what I understand (without getting too technical) :
Supply and demand: more the demand higher the price, and vice versa.
Production(mining) costs: The cost of producing a cryptocurrency can also affect its price.
Cryptocurrency exchanges: Being listed on more exchanges means more accessibility to investors and high in demand results a hike in the price of crypto.
Influencers: Prominent people in the cryptocurrency community, such as Elon Musk🤑, can also affect cryptocurrency prices with their tweets and other public statements.
Want an action packed course to learn all about blockchain and profiting through cryptocurrency? Here’s the course that benefited me a lot personally. (link)
4. Don't let risk eat your profits
Here are some techniques that can be used to lower the risk of loss,
“Remember Risk is inevitable while trading, but loss is not”
Define your SL (Stop loss): If the price falls to the stop loss price, the order will be executed and the trade will be closed “automatically”.
Use TP orders (Take Profit): Profit booking can be done manually or using take-profit orders “automatic sell”.
Hedging: Technique used to reduce risk by taking an offsetting position in another asset. Let's say you might hedge your long position in Bitcoin by shorting Ethereum. This way, if the price of Bitcoin goes down, you will make a profit on their Ethereum position, offsetting their losses on their Bitcoin position.
How I knew I was finally doing crypto right. (read more on reddit)
Do this now to make big bucks... Here I have elaborated, exactly how to put it into action, only action can result you earning some bucks.
Put It In Action...
Step 1: Creating a crypto account today!
There are many options, you can compare different brokers accordingly:
Robinhood*: Popular option for beginners because it is easy to use and offers low commission (1% for crypto) trading platform. However, it has a limited selection of cryptocurrencies available.
Coinbase: It is the largest U.S.-based exchange. Offers multiple ways to trade - web, mobile, and advanced platforms. Allows users to invest and withdraw crypto immediately via fiat currency.
Step 2: Compare and choose the best platform for you
While choosing a cryptocurrency exchange, consider the following factors:
Security: Choose an exchange that has a good reputation for security and has implemented strong security measures.
Fees: Compare the fees charged by different exchanges to find the one that is most affordable for you.
Features: Consider the important features to you, such as the types of cryptocurrencies available, trading tools, and customer support.
Step 3: Research the crypto currencies best suite for your investment style
Are you more of a long term investor? (BTC and ETH)
Are you willing to take short term risks? (DOGE and SHIB)
You can also look for the most popular cryptocurrencies
Bitcoin (BTC), Ethereum (ETH), Tether (USDT), XRP (XRP), Binance Coin (BNB), US Dollar Coin (USDC)
Note: However, it is important to do your own research, also diversify your portfolio by investing in a variety of different cryptocurrencies.
Step 4: For long-term holding, Consider storage and digital wallet options
“A crypto wallet is a software program that stores your private keys. Private keys are essential for accessing and transferring your cryptocurrencies”
There are two main types of cryptocurrency wallets
Hot wallets: Hot wallets are connected to the internet, which makes them more convenient to use but also more vulnerable to hacking.
Cold wallets: Cold wallets are not connected to the internet, which makes them more secure but also less convenient to use.
I recommend using a cold wallet to store your long-term cryptocurrency holdings. A hardware wallet such as the old wallets, Ledger Nano S, Trezor One, Trezor Model T are a secure option.
Step 5: Diversify your portfolio and its importance for Risk management
Diversification is important in any type of investment, but it is especially important in crypto trading. This is because cryptocurrencies are a volatile asset class and prices can fluctuate wildly.
By diversifying your portfolio, you can reduce your overall risk. This means investing in a variety of different cryptocurrencies, as well as other asset classes such as stocks and bonds.
Here is an example of a diversified crypto portfolio and how it looks:
50% Bitcoin (BTC)
25% Ethereum (ETH)
10% XRP (XRP)
10% BNB (BNB)
5% USDC (USDC)
The above portfolio is diversified because it includes a mix of different types of cryptocurrencies, including large-cap, small-cap, and alt-coins.
It also includes cryptocurrencies with different use cases, such as Bitcoin (a store of value), Ethereum (a platform for smart contracts), and XRP (a payment token).
[bonus tip 💡] Yield farming or Staking : Two popular ways to earn more through crypto Lets first Understand Staking : Staking is the process of locking up your cryptocurrencies in a wallet or on a platform to support the network and earn rewards. When you stake your coins, you are helping to validate transactions and secure the blockchain. In return, you are rewarded with more coins of the same type.
Yield farming: is a more complex process where you lend your cryptocurrencies to different liquidity pools in order to earn high returns. Liquidity pools are decentralized exchanges that allow users to trade cryptocurrencies without the need for a middleman. By lending your coins to a liquidity pool, you are providing liquidity to the market and making it easier for other users to trade. In return, you are rewarded with a portion of the trading fees.