Welcome to the fourth quarter of 2024, the price of Bitcoin has exceeded $80,000, and the much-anticipated altcoin season has finally arrived.
But when should I sell my crypto? You might rely on your intuition to determine when the bull run peaks, but is there a better way?
Remember: "Failing to prepare is preparing to fail."
The pitfalls of price prediction
It is a common mistake to rely solely on price targets to manage your investments. Such targets are often subjective and can be driven by emotion or influenced by social media.
It is extremely difficult to accurately predict prices and predict the timing of price changes.
As a portfolio grows, so too does the investor's fear and greed.
The struggle to think rationally escalates with each drop and rise.
Price targets keep changing, cognitive biases keep growing, and investment discipline keeps weakening.
It's you versus yourself, and as the stakes increase, so does the difficulty.
The power of investment ideas
Are there any solid strategies besides price predictions?
We have many options: sentiment, technical indicators or on-chain analysis.
However, strategies centered around an investment philosophy often prove to be the most reliable.
Forming an investment philosophy
An investment thesis is a rational argument for a project's potential over a defined time frame.
The factors that shape this argument are varied and not always price-related.
Good ideas should be testable to allow for precise and flexible management.
Why concept investment is more reliable
Idea investing is reliable for several reasons:
Scales with your growing portfolio
Eliminate the influence of emotions and feelings
Provides a clear verification method
Eliminate short-term noise
Example 1
Let’s say you are very optimistic about the prospects of a particular L1.
Instead of looking at its past ATH#ATH. (all-time high), you can look at:
TVL, transaction volume, or number of active wallets. Going a step further, you can focus on related indicators such as its market share or mind share.
Next, set up validation based on your chosen key performance indicator (KPI). This helps check if L1 follows the path you predicted or deviates from it.
For example, you could use 30-day growth of a KPI as a benchmark.
Example 2
Imagine a new project with an artificial intelligence agent.
Instead of price, you can focus on KPIs like number of proxy transactions. Based on your beliefs, you set a benchmark, such as reaching 1 million on-chain transactions.
What if you like lesser-known and more volatile coins?
Many companies have only a minimum viable product (MVP) or no active product at all.
In this case, focus on the roadmap nodes or milestones.
Also, if your investment philosophy focuses on event execution rather than metric growth, as they say, "buy the rumor, sell the news."
Sometimes it is wiser to exit immediately after confirming a date rather than waiting for the event to happen. You can then set new indicators and develop new ideas.
Other strategies
If you feel that complex idea strategies are not for you? You can consider the following alternatives:
Time-based strategies
Fear and Greed Strategy
Relative performance
Time-based strategies
Time-based strategies offer a simpler and more reliable approach.
You can sell a small portion of your portfolio on a weekly or monthly basis.
Adjust the timing and amount of your sales based on macro factors, liquidity, and your goals.
Fear and Greed Strategy
Market sentiment fluctuations are like ocean tides, which can exacerbate greed.
The fear and greed strategy is to ride the rising tide and secure gains before it recedes.
You could consider a weighted DCA-out strategy based on the Fear & Greed Index.
Relative performance
Imagine the market is a race, and each token is like a speeding car.
Now, the key point is to determine which car accelerates faster relative to the other cars.
One way to realize profits is to sell it when it reaches a certain circulating market capitalization ranking.
Final Thoughts
Cryptocurrencies are highly speculative, and sentiment often takes over.
A risk system that operates independently of prices can provide peace of mind.
Therefore, please prioritize forming your own investment philosophy rather than guessing, which is an essential quality for successful investors. #meme板块关注热点 #贝莱德IBIT比特币持有量反超灰度GBTC $BTC $ETH
