There is a tangible sense of excitement among cryptocurrency enthusiasts as the market prepares for another predicted bull run.
But it’s important to approach this bullish phase with caution and strategic thinking. Avoiding common mistakes can make a significant difference in maximizing gains and minimizing risks during a bull market. Here are some common crypto bull run errors to prevent.
1) Invest in Projects That Retail Can Understand
The crypto market is fast-paced, and we all want to get ahead. So, there’s a temptation to follow the trends set by expert investors and dive into complex projects. However, during a bull market, it becomes even more crucial for retail users to focus on projects they can comprehend rather than relying solely on expert opinions.
Lesson #4: Avoid becoming a bag holder.
Altcoins are a great proxy to make money (and more $BTC), but they aren't a great store of value, as history has shown.
As I said earlier, it's just as important to know when a narrative is exhausted, as when it's beginning.
— Miles Deutscher (@milesdeutscher) August 23, 2023
You need to invest in projects that are transparent and that you understand their use cases. This way, it goes beyond investing in the hype and is more about their solid fundamentals. Investing in projects with clear goals, functionalities, and roadmaps allows for a better grasp of where your money is going and how the project aims to deliver value.
Furthermore, complex projects often come with higher risks, especially for retail users who may not have the same level of expertise as seasoned investors. In addition, during a bull market, speculative hype can drive the prices of projects without a solid foundation. So, it’s important to focus on projects with tangible use cases, real-world applications, and a clear value proposition.
2) Don’t Engage FOMO
Crypto investors must resist FOMO (Fear of Missing Out) and prioritize strategic decision-making. During a bull market, there’s a tendency to jump into investments hastily due to the fear of missing out on potential profits.
This may sound odd to some, but one of my biggest mistakes last cycle was not betting big enough when I had conviction.
Just as it is a mistake in crypto to bet too much at the wrong time, it's also a mistake to not bet enough at the right time.
— Miles Deutscher (@milesdeutscher) August 23, 2023
Avoid impulsive decisions and stay disciplined. By staying level-headed, investors can secure gains, protect their portfolios, and make informed decisions in the volatile crypto market.
3) Always Know Why You Are Bullish on a Certain Crypto
Everyone is buying and trying to make a profit in a bull run. But you must identify why you are bullish on a specific altcoin or crypto and stick to it. Resist the temptation to succumb to market hype and impulsively alter your portfolio.
Lesson #3: Know when to take risks, and when to be risk-averse.
The only way to succeed in crypto is to be calculated and selective regarding when you choose to take risks, and when not to.
I still go back to this clip featuring @0xWangarian as a reference to this. https://t.co/8ys30gbKas
— Miles Deutscher (@milesdeutscher) August 23, 2023
You need to have a clear understanding of the fundamentals of the altcoin you’ve chosen. Stay committed to it. Don’t alter it because a new memecoin is pumping hard. This is the reason most top traders journal. Do a thorough analysis of a project’s strengths and weaknesses. Then decide if that’s your buy.
4) Target a Specific Niche
Niching down is one of the best things you can do in a bull market. Focusing on specific projects or sectors enhances expertise and minimizes risks. Diversification is wise, but a targeted approach ensures a deeper understanding, strategic decision-making, and the ability to capitalize on opportunities within a rapidly evolving market.
5) Know When to Cut Your Losses and Have an Exit Strategy
Having a clear exit strategy and the self-control to manage losses is important. You can avoid significant downturns by recognizing when an investment is becoming negative. Clever investors protect profits and maximize earnings by establishing clear exit points.
5️⃣. Never marry your bags.
Let your winners ride, and cut your losers.
This is a lesson many of us have learnt the hard way. I'm sure many of you "held the bag" too long during last bull run.
The market will always humble you and find a way to take your gains.
— Miles Deutscher (@milesdeutscher) November 23, 2023
The cryptocurrency market is unpredictable. So, you need to take preventative measures to ensure that you can successfully manage volatile patterns and protect your portfolios from abrupt changes in the market.
Staying away from these common blunders can help you successfully navigate the bull market. You’ll need discipline and a focus on your investment goals to get through them. But ultimately, never invest more than you are willing to lose. Check out this article for our previous list of mistakes to avoid.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.
We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.
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