The start of a bull market in the crypto circle is usually a phased process; even if you did not complete your positioning in the early stage, it does not necessarily mean that there are no further opportunities.
Completely missed the opportunity. Here are some suggestions and analyses to help you evaluate the upcoming opportunities:
1. The bull market is usually divided into several stages:
Initial stage: The market starts to recover, with mainstream coins (like Bitcoin and Ethereum) rising first.
Mid-stage:
Funds start to flow into high market capitalization altcoins, and overall market sentiment becomes optimistic.
Later stage: Mid- to small-cap altcoins may soar, while mainstream coins might start to stagnate. The risk increases during this stage, and market fluctuations become more pronounced.
If we are currently in the mid or late stages of a bull market, there are still opportunities, but more cautious strategies are needed.
2. Look for opportunities in the market.
Mainstream coins remain core: Even if the bull market has started, mainstream coins (such as Bitcoin and Ethereum) may still steadily rise in subsequent stages, though the growth rate may be lower than in the early stages.
Quality altcoins have huge potential: Choose projects with real application scenarios and strong community support to seize mid-term or late-stage trends.
Focus on segmented sectors: Pay attention to market hot spots, such as decentralized finance (DeFi), non-fungible tokens (NFT), and Layer.
Solutions, etc.
3. Risk control and strategy adjustment.
Avoid chasing highs: Chasing prices in a bull market can easily lead to losses; it is recommended to patiently wait for buying opportunities after corrections.
Build positions in batches: Do not invest all your funds at once but rather enter the market in batches to diversify risks.
Set stop losses and take profits: Although the bull market is optimistic, risks still exist. Be sure to set clear stop-loss and take-profit points for each investment.
Pay attention to the macro environment: Policies, market sentiment, and global economic changes will all impact the sustainability of the bull market.
4. Long-term thinking vs. short-term opportunities.
If you missed the explosive growth at the beginning of the bull market, consider looking for long-term investment targets, focusing on projects with strong technical capabilities and significant development potential.
In the short term, you can focus on hot sectors with high market sentiment, seizing phase-specific opportunities.
5. What opportunities are still available at the current stage?
Bitcoin halving effect: The next Bitcoin halving event may further boost market sentiment.
Institutional funds inflow: If more institutions participate, the cryptocurrency market could continue to expand.
Emerging Track Innovation: Closely monitor projects with breakthrough technologies, as they often provide excess returns in the late stages of a bull market.
Even if you miss the early stages of the bull market, there are still opportunities. The key is to maintain rational investment, choose opportunities with a higher risk-reward ratio, and reasonably control your position and risks. The bull market will eventually come to an end, so try to avoid blindly chasing prices at market highs and focus more on medium- to long-term value investments.
Recently, many friends have privately messaged me asking if there is still a bull market and how to position themselves.
Today, I will share a discussion about the crypto bull market, which only represents my personal views!
The main reason is that the volatility of the bull market is significant; a bear market might fluctuate by one or two points in a day, while a bull market can see fluctuations of dozens of points in a day.
It is not uncommon for prices to double in a day, and for many, the desire to make big money in a bull market, wanting to get rich overnight, can lead to seeing others making money while they are still losing. This can lead to a breakdown in mindset, and in a fit of impulse, they may play with contracts, chasing highs and selling lows, leading to losses and being liquidated. Don’t ask me how I know this; saying too much brings tears. So today, let’s discuss how to respond when the bull market arrives to make money.
1. Mindset.
In financial investment, whether in the stock market, futures market, or cryptocurrency market, what ultimately matters is mindset. A good mindset accounts for half of success.
In a bear market, it may still be necessary to pay attention to the fundamentals of projects and technical aspects. However, during a bull market, everyone is in a FOMO state, where technicals and fundamentals are not as important; the market moves according to emotions. Whoever can maintain a good mindset and perceive changes in market sentiment, while keeping their operations consistent, will succeed in this market. Conversely, if your mindset is poor and you hold onto the desire to get rich overnight, any slight deviation from your expectations can lead to a breakdown in mindset, especially when seeing others making profits while you are losing money. This can lead to a collapse in mindset and distorted operations, ultimately resulting in being harvested by the market. Remember, the final outcomes of a major bull market are often chaotic, and almost all coins will rise; the only variable is how much they rise. As long as you are not greedy and can maintain your composure, holding onto your coins, making money in this market during a bull market is not difficult.
2. How to select coins.
Although almost all coins will rise in a bull market, the order of their rises varies. Some, like Bitcoin, often lead in the early stages, while others, like Ethereum and other top ten mainstream coins, will rise in the mid-bull market. Smaller altcoins often rise towards the end. Of course, the degree of increase will also vary, so properly positioning your coins during a bull market can maximize profits. Historically, the bull market cycles generally follow the process of Bitcoin -> mainstream coins -> altcoins, which is essentially a process of capital overflow.
Therefore, I believe that the risk-reward ratio for retail investors buying Bitcoin is not high at present. You can focus on mainstream coins, allocating about half of your overall position to mainstream coins, while using about 30% of your position to invest in quality altcoins, such as mainstream coins in the meme sector, LSD sector, and L2 sector. Regardless of the bull market cycle, the meme sector will always be repeatedly speculated and perform well. The LSD and L2 sectors are relatively new this cycle; although they have not performed well this year, they are expected to show decent performance moving forward. The remaining 20% can be used to catch hot spots; throughout the bull market, there will be continuous new hot spots and opportunities. When opportunities arise, you can deploy a small portion of your position to take advantage, or when the market suddenly dips, this portion can also be used to pick up bargains.
3. Risk management.
Capital management: The risks in the cryptocurrency market are much greater than in traditional markets, and the volatility is naturally high. In a bull market, many people tend to only see opportunities, often neglecting risks. It is not advisable to invest all your funds in the cryptocurrency market, and you should never borrow money to trade coins; only invest what you can afford to lose.
Avoid buying just one coin: As the saying goes, don’t put all your eggs in one basket. Even if you are optimistic about a coin, do not invest all your funds in it, especially since many altcoins are relatively immature. There is a lot of information that ordinary retail investors cannot access. If you invest everything in one coin, it might not perform well throughout the bull market, you may not make any money, and there is a risk of the project failing, which could lead to total loss during a black swan event.
Learn to withdraw: I have always believed that making profits and withdrawing in the crypto space is a good habit. Money in your account is not truly earned; it is just a number, which can be lost again with market fluctuations. When you profit, withdrawing and spending is what counts as your money. During a bull market, numbers in accounts can rise rapidly, leading many to mistakenly believe that making money in crypto is easy, as if they are picking up money. Hence, they often do not withdraw and continue to inject more money into the market, hoping to make a windfall. Such greedy behavior often ends up losing both principal and profits, and even losing everything.
Here’s some valuable content!
A mature trader does not trade based on feelings; they usually leverage some tools to assist in making judgments and ultimately making directional decisions.
Here are some commonly used indicators.
1. AHR999: Practicality in bull market 3 stars, bear market 5 stars. It is not very accurate in a bull market; as BTC's market capitalization increases, the highest point of each cycle tends to retreat compared to previous highs, making it difficult to determine the upper range. However, it is suitable for dollar-cost averaging and bottom-fishing (at 1.2), with the main focus in a bull market being when it drops below 1.2 as a good buying opportunity.
2. Rainbow chart: Practicality in bull market 2 stars, bear market 4 stars. It is also useful for observing big trends. It is more accurate in a bear market; the highest point in each bull market cycle tends to retreat. Similar to the ahr999 indicator, as the volume continues to grow, the volatility of the indicator gradually decreases.
3. 1-year HODL wave: Bull market 4 stars, Bear market 3 stars. It is a useful indicator for observing bull and bear trends, but still remains a trend indicator.
The proportion of accounts holding coins for more than a year is continuously decreasing, often accompanied by a large influx of retail investors during a bull market, leading to an increase in market capitalization.
It is an indicator that measures the investment heat of BTC.
4. Pi cycle top indicator: Bear market 3 stars, Bull market 5 stars.
Currently, it is a relatively accurate indicator for quantifying the timing of escaping the top of a bull market. By comparing the 111-day moving average (MA) of BTC prices with 350-day MA * 2, when 111 MA exceeds 2 * 350 MA, it indicates overheating, meaning the medium-term increase over the last four months has been too high.
Historically, this indicator has accurately predicted top positions in the three BTC cycles, making it worth paying attention to. It aligns with the trend logic of short- to medium-term MA90 and MA5 golden death cross. When the medium-term increase far exceeds the long-term, it indicates overheating.
In a bear market, since MA350 is always greater than MA111, it lacks reference value.
5. MVRV Z-score: Bull market 3 stars, Bear market 4 stars.
Look at the difference between intrinsic value and actual market value. The actual market value is calculated as price * number, while intrinsic value is the true equilibrium price calculated based on the actual circulating amount of BTC (excluding long-term non-circulating BTC) and the average trading price of BTC.
The Z-score is a statistical method used to judge whether the volatility between two indicators (short-term market sentiment) is excessive.
However, also due to the continuous growth of BTC's market capitalization, the volatility of the indicators is gradually decreasing. The highest in December 2017 was 179.1, and in February 2021 it was 219.7. The cycle in 2017 was very accurate, while in 2021 it was not the highest point; relative high points, if triggered, are good warning signs of an upcoming high point.
6. USD premium rate situation: Bear market 4 stars, Bull market 4 stars.
The USDT premium rate in the bull market is mostly positive, indicating that off-exchange funds are entering the market. Conversely, the market is usually at a negative premium rate.
Therefore, after escaping the top of a bull market, it is best to convert BTC into fiat currency rather than USDT (during winter storage, USDT may further depreciate due to negative premiums. It is best to wait until late winter, then convert funds into USDT to prepare for entry).
7. Annualized USDT borrowing rate: Bear market 3 stars, Bull market 4 stars.
The normal USDT lending rate is roughly equivalent to the yield on short-term US Treasury bonds, indicating that there is no speculative situation of leveraging USDT to buy coins during this halving cycle. The market that started after October 20, 2023, coincided with the annualized start of USDT borrowing, peaking at a daily interest rate of 0.18% on March 3, with an annualized interest rate of 65%.
8. Changes in the expected US Treasury bond yields: Bear market 5 stars, Bull market 5 stars.
US Treasury bond yields act as a barometer for the world economy; any changes in interest rate expectations will directly affect the prices of risk assets.
For example, when interest rate hike expectations emerged in October 2021, all risk asset prices fell sharply. In March 2023, the expectations of interest rate cuts brought on by the bankruptcy of US banks pushed risk assets into a new round of bull market.
In contrast, relatively stable high interest rates (after July 2023) can continue to raise the valuations of risk assets as long as expectations of interest rate cuts persist.
In the crypto space, there are no permanent winners, only those who keep learning and adapting to changes. Blockchain technology is constantly evolving, with new projects and models emerging; it is essential to maintain the enthusiasm for learning and keep up with the times.
Finally, always remind yourself that investing in the crypto space carries enormous risks; have a sense of reverence. Do not be blinded by the myth of getting rich, and rational investment is the key to long-term survival in this market.
In summary, the road in the crypto space is full of thorns; only by continuously summarizing experiences and learning lessons can one find their own place in this challenging field.
$AGLD $POL $ETH
