Understanding Leverage: 5 Key Principles

Altcoins are essentially leverage on Bitcoin and Ethereum, designed to amplify the profits you can earn from these two dominant cryptocurrencies.

For example: in 2022, Bitcoin dropped to $16,000, while Solana fell to $9. Fast forward to today, Bitcoin is at $100,000, while Solana has reached $245. Bitcoin saw a 6x return, but Solana gained 27x over the same period. In this example, Solana acted as leverage for Bitcoin, just as most altcoins do. So, why take on the risk of using high leverage when the market itself offers better opportunities with less risk?

This is my guiding principle: reduce risk. When you minimize risk, profits follow naturally.

To succeed in this market over the long term, follow these steps:

1. Trade spot, not leverage. The most successful Bitcoin investor in history is Satoshi, and he never used leverage on Bitcoin!

2. Avoid small timeframes. Don’t focus on charts like the 1-minute or 15-minute timeframes, as they are insignificant for long-term strategy.

3. Focus on the big picture. Don’t chase coins that have surged 500% in a month or three. Instead, look for coins that have been trading sideways near the bottom for a few months.

4. Seize easy opportunities. Pay attention to “surrender candles” and fast liquidation candles—these can provide profitable opportunities in the market.

5. Don’t develop attachments to coins. Whether you love or hate a coin is irrelevant. Always focus on your portfolio and look for opportunities to profit.

By following these principles, you’ll set yourself up for sustainable success.#BTC☀ #ETHETFsApproved $BTC $ETH