Read part 1 of “How to prepare for the end of the bull market”, click here.
Therefore, you have made a million dollars in this cycle, and you are working hard on how to convert these life-changing gains into real-world money before the inevitable collapse. But at the same time, you don’t want to sell now and miss the potential upside. What should you do?
For Mattie Greenspan, the founder of quantum economics, the answer is simple: stay optimistic. He is not an advocate of trying to time the market.
“As someone who has traded all my life-I mean, before cryptocurrencies-you will find that it is always worthwhile to be optimistic. Withdrawing your money from the market is almost never a good long-term strategy. Not applicable to any market in almost any time frame.”
Greenspan pointed out that even the few people who bought bitcoin during the peak of the bull market in 2017 had risen by 250% after only three and a half years.
“Anyone who is wise enough to foresee the crypto winter and take out all the money, when will you come back? No one can schedule the market time to T. The best thing we can do is figure out based on the information we have What is the best investment to make over time.”
No one can predict the top
Unlike Decentrader analysts Filbfilb and Philip Swift part 1, Greenspan believes that it is impossible to use on-chain indicators to accurately predict the end of the bull market. He warned that unexpected events such as bad regulatory news from China or Elon Musk’s tweets could happen at any time, causing the market to enter a bear market mode.
Filbfilb said that this is why a good trader does not only look at one type of data, but considers on-chain analysis in the context of sentiment, cyclical data, technical analysis and everything else to judge the market trend.
Filbfilb said: “If you sit there waiting for some on-chain analysis to tell you the answer, and we have a black swan incident, you will not take any action in time.” He added that even the black swan incident will not be experienced. Of traders posed major problems and pointed out that the “Black Thursday” crash in March 2020 has heralded several weeks:
“If this happens again, as a trader, I have enough time to take action. I have been in and out of the market.”
“For me, this is a more volatile situation. I have other tools, such as I know how to hedge. I have other different risk management methods, which means I don’t necessarily have to sell my Bitcoin talent Put yourself in a position where you can take any downside risks.”
Needless to say, being able to play on the market like Filbfilb requires a lot of effort, time and training. What about the rest of us?
Filbfilb recommends getting enough profit to keep yourself happy during the downturn. “If you made life-changing money, now consider changing your life a little bit. For me, I personally have done this-I have taken some money off the table,” he said.
“What this allows me to do is to be able to persist for the remainder of the cycle, and the price may be higher.”
Profit from profit taking
Scott Melker, also known as the “Wolves of All Ways”, agrees that profiting all the way through the transaction is the key to success, whether it is at a predetermined level or a more random level. “People should make profits on the rise, just as you should average the dollar costs into assets on the fall,” he said.
“I firmly believe that once your investment has doubled, you don’t think about your initial investment. So, if it is $100,000, now you have $100,000 to play, and you have absolutely no risk.”
This has the added benefit of reducing the chance of making big mistakes due to too early, too late or too much sales when you think the top has arrived.
“You know that when you make a profit, every time you sell a product, you are reducing the pressure on future decisions. This is a very good place mentally.”
However, he added that you can own diamond hands and have a long-term holding of high conviction. “I buy Bitcoin for my kids-I don’t worry about cycles,” he said.
The process of constant adjustment
Greenspan’s approach is to make money when he needs money. He shifts his allocation from already popular tokens to new projects that he believes will perform better in the future. He tends to make a 10% profit at a time at different stages-returning to Bitcoin or making new investments in cycles.
“You can limit the downside of your portfolio while maintaining upside potential through diversification,” he said.
Although he does not believe that it is possible to determine it when the market top appears, he points out that when you are in a bear or bull market, this is usually quite obvious-so you should act accordingly.
“Prices are falling, and prices are expected to fall: now is the time to reduce risk exposure. I don’t see any reason to try to determine the top,” he said.
“When we are in a bear market, we can recognize – that’s when we squat down. So accept things, consolidate your portfolio, and cancel leveraged bets,” he added.
The JPEG price of this tulip is $3.2 million pic.twitter.com/7ppboKsBwO
-TurnerNovak🍌🧢 (@TurnerNovak) August 29, 2021
Witnessing the end of the 2017 bull market, Melk said that the highest excitement and excessive bullish sentiment of new retail players are the most reliable top signals.
“Sentiment will be a better indicator than a chart,” he said. “We saw it in 2017, and people who had never heard of cryptocurrency but still didn’t know it told you how they needed to buy it.”
He recalled a friend’s nanny who bought “Ripple shares” after seeing it on CNBC in 2017. “These are very important signals,” he said.
“If you’re looking at a chart, maybe it’s a monthly meteor candle, the price goes up and down all the way, and has such a long wick in a larger trading volume than any you’ve seen before. These are what you’re looking for The euphoria reaches its peak, and then the price cannot rise because of this euphoria.”
A few months ago, the excitement caused by dog tokens such as Shiba Inu and memecoins on the Binance Smart Chain seemed to be the most important signal, but Melker believes that cryptocurrencies are now large enough to allow bubbles to expand and burst in all areas of the market. , Without letting everything get into trouble. He cited DeFi Summer and the rise and fall of NFT this year—and the rise again—as examples.
“In my opinion, things like DOGE and Safemoon are isolated bubbles in themselves, but I don’t think they indicate a bigger bubble in the entire market,” he said. “If we see this behavior on Ethereum or Bitcoin, we should pay attention.”
Greenspan said that focusing on trying to choose the end of the cycle can distract people from the bigger picture. In his view, since the global financial crisis, the market has basically been in a long-term bull market. Sometimes prices will be slightly ahead and temporarily fall back, but the overall trajectory is rising.
“What happened with Bitcoin in 2014, the same thing happened in 2018-it was ahead of schedule,” he said. “I don’t think we will see encrypted winters like those two again.”
In fact, all the interviewees of this article agree with this point: none of them foresaw an 80% decline in 2018/2019 and a long-term grinding of the bottom.
“I think we will see some healthy corrections, but we are continuing to rise,” Melk said. “If Bitcoin does not reach six figures in this cycle, I would be surprised.”
Ballet CEO Bobby Lee (Bobby Lee) Bitcoin’s promise, I believe that BTC is becoming a global reserve asset like gold, silver and bonds-it will be worth millions of dollars and held by nation states. “In my opinion, Bitcoin is worth at least one, two or even millions of dollars,” he explained.
So, if you agree with this view, if you hold it long enough, you will be a winner. Even if you don’t, Lee advises not to succumb to the temptation to try to sell at the top, so you can buy more at the bottom.
“It’s impossible-no one can catch the peak,” he said, adding that even his brother, Charlie Lee, the founder of Litecoin, did not choose the exact peak to sell in 2017 All his collections.
“If you ask my brother, I don’t think he has reached the top. […] He uninstalled his Litecoin, but he did not uninstall all the cryptocurrencies,” he said.
“The way to make a profit is to keep holding up to 100 trillion US dollars. But most people want to take some money off the table when the price rises. Therefore, the prudent way is to set aside a small amount of products that must be sold in a fixed price range. , All the way to 1 million US dollars.”
This time, is it different?
More and more of the best and smartest cryptocurrencies are beginning to think that the era of the four-year market cycle may be coming to an end. With the advent of mass adoption, the market is actually entering a “super cycle.” As institutions add Bitcoin to their balance sheets, and the central bank adopts modern monetary theory and prints endless dollars as a policy, this time the industry must have entered uncharted territory.
“There is a saying that we have entered a super cycle, which means that Bitcoin will effectively become a store of value,” Filbfilb said. “If this happens, we may be in a longer cycle.”
“If the U.S. dollar continues to depreciate and so on, then there is no reason for anyone to really start selling their Bitcoin because the value has nowhere to go.”
In the context of the macro cycle, long-term investors are still climbing towards the peak accumulation, which marks the bottom. Early signs indicate that the bull market may continue until 2022, and BTC is being freed from the 4-year internal cycle of halving.
— Willy Woo (@woonomic) August 18, 2021
Melk also believes that Bitcoin may be in a super cycle, and pointed out that market time is better than market timing.
“If you believe that Bitcoin will reach six figures one day, if you believe it will reach a million dollars, […] You just started buying,” he said. “If the money you invest is a loss you can afford, and you take a long time frame into account, then you don’t even have to worry about the top. “
“Like any other market in history, the best way to approach it is to slowly invest money where you never need to touch it and let it work for you for a long time. This is how people from the beginning Just in the way of acquiring intergenerational wealth in the stock market, Bitcoin should be no different-unless it accelerates.”