Today, we’re going to go through some profit-taking strategies for the alt season, which may (or may not) be coming soon
Also, the Trump administration has proposed giving $1000 to parents of newborns to boost the population. Such policies can be short-term bullish for the economy during a Bull Run.
“If it’s not here yet, then why are you going through profit-taking strategies?” you may ask. Well, many crypto investors are burdened with euphoria during bull runs. Very few of them will be taking profits, which leads them to “round-trip” their bags. By learning and committing to profit taking now, you’ll have a clear head whilst many others do not amid a bull run.
Let’s say you have a high-conviction coin. We should have the habit of DCA by splitting our stables into 3 or 4 entry points. For example, when we buy a coin at $1, we have enough stablecoins to buy again at $0.80 and $0.60, as and when it falls 15-20%. If it goes to the moon from $1 before hitting $0.80, you’ll still make a profit. With your stables, look for other high-conviction coins that’ll multiply your capital. Buy coins that have not yet taken off.
What happens if you’ve DCA-ed 4 times into a high-conviction coin? Now, I stop DCA-ing further. The coin may have run into issues that you did not foresee. By limiting your capital to a coin (no matter how much you love it), you won’t wreck your whole portfolio. Otherwise, you won’t have enough stables for other real chances.
Knowing when to cut your losses is important, too. When something disastrous happens to the project (E.G., Major hacks, leadership dissolves, etc), analyze the situation carefully. If you think the project can’t recover, cut your losses before the coin goes to zero. Remember OM.
Similarly, be ready to sell when the coin you buy moons. Be aggressive when taking profits, as you’ll be realizing your gains. Don’t hold on to your coins thinking that it’ll go to 1000X, when it’s likely that it won’t. More on that in the next section.
During a bull run, when your coin goes up 2.5x, take out 40% of your bag. This secures your initials, and it’ll be impossible to lose money on this trade. Take out the next 40% when your coin goes up 4x. Leave the remaining 20% for a moon bag. Usually, we can sell all or part of this at a 10x.
Follow this strategy, and you’ll be able to make a 3x-5x for each coin you invest in during the bull run.
The previous section was a very generic but useful way of taking profits for altcoins. However, you’ll have to be flexible with Take Profit (TP) targets. For Low Caps (which are more risky), you may choose to secure your initials earlier. For High Caps (which are less risky), you may be more comfortable holding them for a little bit longer. But, one true principle remains – You must take profit.
During the bull run, prices move fast. For your coins, set price alerts so that you can react in real time when you need to buy or sell coins. Remember, the earliest bird gets the worm when prices are going bananas.
Another handy tip, never sell your coins at psychological levels (E.G., $10 or $50). Set them a little bit lower (such as $9.90 or $49). This allows you to take profit earlier when the majority of sellers are setting exits at these levels.
Alternatively, you can set limit orders at such zones.
There are some tell-tale signs that the bull market is reaching its peak. When you see these, you should sell your coins more aggressively. As the fear and greed index reaches extreme greed, memecoins are 100x-ing everywhere, and you’re constantly screenshotting your portfolio, it may be wise to start selling more.
The crypto space, especially the altcoin markets, is a zero-sum game. For each and every person taking profit, there is another who either got in too late or round-tripped their bags due to euphoria.
Regret of not taking profit will be far greater than the regret of taking profit early.
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 risk tolerance levels of the writer/reviewers, and their risk tolerance may differ from yours. We are not responsible for any losses you may incur due to any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments; therefore, please conduct your due diligence. Copyright Altcoin Buzz Pte Ltd.
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