Bottom fishing strategy
When it comes to bottom hunting in the cryptocurrency market, I usually split my funds into two equal parts: one for buying on dips and the other for strategic buying during bullish momentum. Here’s how it works:
Left side: Buy on the dip
On this side, I increase my purchases as the price continues to drop. The deeper the drop, the more I buy. I continue to accumulate until I reach a personal limit determined by my psychological comfort level. This approach allows me to secure lower prices, but it requires discipline and confidence to stick to the plan, even during sharp declines.
Right side: Waiting for confirmation
Here, I wait for signs of recovery, such as a steady upward momentum recovery or the formation of higher highs and higher lows on the chart. Once the price pulls back a bit after showing strength, I step in to buy more. This ensures that my money is only allocated when there is evidence of bullish momentum.
Avoid rash decisions.
What I avoid is chasing the price after it starts to rise without proper confirmation. Jumping in too early, such as buying after a small spike, often leads to repeated losses, especially when the price reverses unexpectedly. Being patient and waiting for clear signals is essential to avoid unnecessary risks.
How does BTC relate to altcoins?
Bitcoin (BTC) remains an anchor for the cryptocurrency market. Altcoin trends often depend on Bitcoin’s performance. While altcoins may show temporary divergence from Bitcoin, their sustainability often depends on the strength of Bitcoin. For example:
1. Bitcoin Stability: If Bitcoin shows resilience or a strong upward trend, altcoins are likely to maintain their gains.~2. Oversold Bounces: Some altcoins may experience price spikes due to oversold conditions, but these moves may lack long-term strength if Bitcoin does not provide a strong foundation.~3. Controlled Pullbacks: Market makers may intentionally control average price levels, leading to short-term spikes in altcoins even as Bitcoin stabilizes.
The waiting game with Bitcoin
Timing is everything when dealing with Bitcoin and altcoins. Here is the sequence I follow:
1. Bitcoin dips near the bottom: I am watching the Bitcoin price closely, waiting for it to approach a major support level.~2. Altcoins’ reaction: If Bitcoin does not fully correct, altcoins may still face temporary pullbacks or defensive rallies to maintain their price levels.~3. Bitcoin hits the right zone: Once Bitcoin drops to a solid support level, it often creates a basis for altcoins to gain strength.~4. Altcoins follow the trend: Altcoins usually go along with Bitcoin’s trend, either rising higher along with Bitcoin or consolidating if Bitcoin shows weakness.
Final Thoughts
Patience and strategy are essential to navigating the cryptocurrency market. By dividing your funds carefully and sticking to a plan, it is possible to minimize risk and take advantage of market volatility. Bitcoin remains the driving force, so monitoring its movements is crucial to making informed decisions about altcoins. Ultimately, understanding market cycles and staying disciplined will always be the key to successful trading.
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