In the cryptocurrency market, short-term price fluctuations often leave novice investors dazzled and unable to grasp the correct operational direction. In fact, success in the crypto space does not lie in chasing short-term profits but in adhering to a steady investment strategy. Today, I will delve into how to find long-term stable profit paths in this high-risk market through my own explorations and experiences in several bull and bear cycles.

1. Grasping Market Cycles and Investment Rhythm

The price of cryptocurrencies is highly volatile, but their market cycles have certain regularities. Generally speaking, bull markets last between 6 months to 1 year, while bear markets can last from 1 to 2 years. This means that each bull-bear cycle lasts approximately 3 to 4 years.

To remain undefeated in the market, the simplest and most effective method is to position yourself during bear markets and exit during bull markets. Historical data shows that Bitcoin averages several times increase in each bull market, while experiencing significant corrections during bear markets. This provides data support for the strategy of 'buying in bear markets and selling in bull markets.' For example, during the bear market at the beginning of 2020, Bitcoin fluctuated around $5,000, while at the peak of the bull market in 2021, it once broke through $60,000. Such large fluctuations provide stable profit opportunities for long-term investors.

2. The Core Position of Mainstream Coins

Many people like to chase altcoins during a bull market, hoping to get rich overnight through skyrocketing prices. However, the reality is that the probability of striking it rich is extremely low, and most altcoins will experience significant corrections or even go to zero in the later stages of a bull market. Therefore, I have always insisted on allocating my core positions to mainstream currencies, especially Bitcoin (BTC) and Ethereum (ETH).

For example, in the data from the third quarter of 2024, Bitcoin and Ethereum continued to lead the market, especially after the Federal Reserve's interest rate cuts and China's economic stimulus policies, with Bitcoin rising about 7.5% that quarter and Ethereum increasing by 2.8%. In contrast, altcoins experienced much more volatility, with some coins seeing corrections of 30%-50% in a short period. This fully demonstrates that the stability of mainstream coins not only provides a higher margin of safety during bear markets but also yields decent returns during bull markets.

3. Bear Market Strategy: How to Determine Market Bottom?

For most investors, bear markets are the best time to position themselves. However, the problem is that many people often lack patience or fall into panic due to the long-term market downturn. My advice is to build positions gradually in phases during a bear market, rather than betting everything at once. A significant characteristic of market bottoms is that the overall atmosphere in the crypto space is extremely quiet, with no media coverage and no discussions about Bitcoin; this 'stagnant' state often lasts for months or even longer.

Taking the bear market of 2020 as an example, at that time, the price of Bitcoin once fell to the range of $4,000-$5,000, and overall market sentiment was negative, with few optimistic about the future of cryptocurrencies. However, it was the investors who gradually built positions during this extremely low period who ultimately benefited greatly in the bull market of 2021. This also validates a classic investment theory: when most people stop paying attention, that is often when you should enter.

4. The Temptation and Risk Management of Altcoins

In a bull market, the explosive growth of altcoins often attracts a large number of investors, especially in the later stages of a bull market, where these low-market-cap coins can see several times or even tens of times increases in a short period. For example, in the mid-2024 cryptocurrency market, several altcoins like REEF and PEPE experienced astonishing gains in a short time. However, the explosive growth of altcoins comes with extremely high risks.

Historical data tells us that most altcoins typically experience a cliff-like drop after a bull market ends. After the 2018 bull market, once-popular altcoins like Bitconnect and Verge quickly lost market attention, with prices plummeting to near-zero and eventually disappearing completely. For ordinary investors, the high volatility and unpredictability of altcoins make them more like gambling rather than a long-term investment choice.

Therefore, chasing altcoins in a bull market is a double-edged sword. If you really can't resist trying it, you should only participate with a very small proportion of your funds, avoiding heavy bets, and do not expect to get rich through altcoins. As stock guru Warren Buffett said, 'Don't take unnecessary risks for a little extra return.'

5. How to Sell at the Peak of a Bull Market?

Deciding when to exit the market is the most critical timing for every investor. The mid-point of a bull market is generally the safest time to exit. At this stage, the prices of Bitcoin and Ethereum have steadily risen, market sentiment is high, and mainstream coins are in an upward trajectory. Selling at this time can ensure a good profit margin without getting caught in the crazed bubble of the bull market's end.

Taking the bull market of 2017 as an example, Bitcoin reached nearly $20,000 at the end of the year, but many investors chose to hold on due to greed, ultimately experiencing a drop of over 80% at the beginning of 2018. A similar situation occurred in 2021, when the price of Bitcoin exceeded $60,000, causing extreme optimism in the market and many investors hesitating to exit, resulting in heavy losses during the subsequent correction.

Rational investors should gradually reduce their positions at the peaks of bull markets, rather than trying to predict the absolute top of the market. After all, no one can accurately grasp when a bull market will end, but gradually exiting can effectively reduce the risk of being trapped.

6. Preserving Principal is of Utmost Importance

In any investment market, the safety of your principal should always be the top priority. Especially in the highly volatile crypto space, preserving your principal means you can continue to participate in the next bull market rather than being dragged into the abyss by the collapse of the previous market. Many people end up turning a small loss that could have been mitigated in a bear market into an irreversible large loss because they were unwilling to cut losses.

Take LUNA as an example. At the beginning of 2022, this coin was once very popular, attracting a large number of investors to heavily bet on it. However, with the ecosystem collapsing, the price of LUNA plummeted from $80 to nearly $0 in just a few weeks, leaving almost all holders deeply trapped. This painful lesson reminds us once again that in the crypto market, preserving capital is essential to ensure the opportunity for a comeback.

How to steadily profit in the crypto space in the long term?

The crypto space is a market full of opportunities but also a battlefield fraught with risks. To survive and profit in this market in the long run, it is crucial to adhere to the strategy of buying in bear markets and selling in bull markets, focusing on mainstream coins while maintaining a rational investment mindset. Do not be swayed by short-term market emotions; what truly enables you to profit in the long term is your patience and discipline.

No matter how the market fluctuates, remember the essence of investing: steady profit is the ultimate goal, and preserving your principal is the foundation for achieving this goal. I hope my experience can help you make more rational investment decisions in the future cryptocurrency market.

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