Your spot holdings may face significant drawdowns, and whether to avoid risks in advance is entirely up to you. This period may be very painful.
If you can hold on (hodl, meaning to hold onto crypto assets long-term) through this painful period, I believe the next wave of increases will be very beneficial for some key coins, potentially fully erasing previous drawdowns.
The market has not 'ended'; I expect a new upward phase in the next 4-8 weeks. The reasons include Bitcoin's dominance (btc.d) being at a high level, seasonal factors, Ethereum/Bitcoin (ethbtc) possibly rising, and market capital rotation, among others. Additionally, the government's attitude towards cryptocurrencies is relatively positive, and there are fewer obstacles in the macroeconomic environment, all of which theoretically create a favorable environment for the market.
In the next wave of increases, you need to gradually become a complete seller. If you choose to hold during the low point, I can understand, but the subsequent selling plan should gradually shift towards safer assets.
Safer assets include Bitcoin (BTC) and stablecoins.
As the market cycle progresses, you need to gradually reduce risk, decrease position size, and slowly exit the market through dollar-cost averaging (DCA), rather than liquidating everything at once.
Regarding the upcoming market rotation, there is no clear prediction. From now on, I believe the market will primarily belong to traders rather than long-term holders (hodlers). This means that certain coins may attract a lot of buying interest, while others may rise slowly (like XRP compared to TIA's performance).
It is difficult to predict in advance which coins or sectors will become market leaders. From a rotation perspective, it seems all coins will rise, but at the same time, there is no overall upward trend. What I mean is: ordinary AI coins will eventually see a big rise, but it may only manifest in 1-2 coins (for instance, TAO's increase may be very exaggerated, while AKT may only rise by 50%).
Do not hold onto your coins just to achieve unrealistic price targets. It is very likely that many coins will not reach their all-time highs (ATH) again. Of course, some mainstream coins may reach that point, but a bull market does not mean all coins will return to ATH levels. While anything is possible, I believe that 80% of coins (or even more) will struggle to achieve this. Following market trends and taking profits in a timely manner is the wise move.
If your portfolio is very diversified, I recommend selling more than 50-75% of your holdings in the next wave of increases when the rotation ends. For example, when the AI sector rises, if you hold FET, you might choose to sell; or if you hold RWA (real-world asset tokenization) coins, take profits when ONDO performs well.
In the recent wave of increases, I have sold many coins in which I have less confidence; I will later reallocate funds to other higher-quality coins.
In the coming period, you should try to consolidate your investments, reduce the number of new positions opened, and lower the variety of your overall holdings.
I am uncertain when the next significant pullback similar to the summer of 2024 will occur. I speculate that there are still 3-6 months left, during which the market could become very bad and face another round of pullback. As for whether this pullback will be primarily driven by time factors like in 2022, rather than price factors, I cannot yet judge.
This summer, altcoins experienced a significant 75% pullback, primarily driven by capitulation sentiment caused by price declines, rather than prolonged time leading to volatility. Although those 6 months seemed incredibly long for us, compared to the 1.5-year sideways period for altcoins in 2018-2019 and 2022-2023, this adjustment has actually been relatively quick.
The market may enter a so-called 'super cycle,' as some people say, 'this time is different.' But I remain cautious about this, so I will still choose to act prudently.
My ideal goal is to control the drawdown of the portfolio from the all-time high (ATH) to a maximum of around 30%. I understand my risk tolerance; if the maximum drawdown reaches 50%, I can accept it, but 30-40% would be a more ideal range.
Your task is to continuously analyze data each week and reassess the market cycle's top and end points. When the market begins to turn, things can get very complicated. Even when a bull market ends, there will still be many people shouting that 'the bull market is still on.' This situation is always difficult to predict, but you need to stay alert. Do not try to predict the distant future; accept market information and adjust your strategy based on the actual situation.
Finally, be sure to do your own research (DYOR); do not blindly listen to others' opinions, and independently analyze and manage your own portfolio. Everyone's trading strategy is different; do not completely rely on the exit strategies of KOLs you like. Some may trade well, but most may suffer severe losses. If you can exit the market with a considerable profit, you are already a winner.
