Understanding the Current Crypto Landscape
The current crypto landscape is marked by various factors. Bitcoin (BTC) is on an upward trajectory, Solana has experienced significant gains, and there's positive news surrounding Bitcoin ETFs. On the flip side, geopolitical tensions and high inflation rates remain pressing issues, which can impact the overall economic and financial landscape. These concerns make the macroeconomic situation appear less than ideal, and they are factors that could influence the crypto market.
What to Do If You Have No Position!
First off, all, you are still early.
Many altcoins are currently not doing much, but they are likely to start following Bitcoin's lead soon. In fact, quite a few of these cryptocurrencies have the potential to perform better than Bitcoin during a bull market.
Now, it's important to be aware that some people keep talking about a bear market, predicting that prices will keep dropping. Surprisingly, Bitcoin has actually increased by about 130% since last November. Some still call it a bear market, but I don't see it that way anymore. I focus on what's happening right now in the market, not on what might happen in the future.
Here's the thing: Some folks let their pride get in the way, and they struggle to accept when the market changes direction. People with this mindset often lose money over time and miss out on good opportunities. The key is to focus on what's happening at the moment and not overthink things. Also, it's crucial to manage the risks in your investments by adjusting the size of your positions and making smart trades that offer good risk to reward ratios.
My current focus is on the upside, but I won't hesitate to switch to a more cautious approach if the market changes direction. I do this for these main reasons:
Risk Management: It's crucial to safeguard your investments and prevent big losses by managing your risks in trades.
Leave Your Ego Behind: The market doesn't care about our egos, so it's important to put personal biases aside to make smart financial decisions.
Profit Matters More Than Being Right: Ultimately, our goal is to make money, not to be right all the time. Adapting to changes in the market is an important part of this journey, and I encourage you to do the same."
Let’s dive in further and assess why you don’t have a position open yet.
Assessing Your Situation
If you currently find yourself without any crypto holdings, it's important to understand why this is the case. Your approach will depend on your experience and perspective.
Scenario 1: Relatively New to the Market
If you're relatively new to the crypto market, consider the following steps:
Avoid FOMO: Fear of missing out can lead to impulsive decisions. Remember, the market is highly unpredictable, and it can shift rapidly.
Start Dollar-Cost Averaging (DCA): Initiate a core position in major cryptocurrencies like BTC, ETH, and Matic through regular, small investments. Create a short-term portfolio for faster returns with specific stop-loss orders, targets, and invalidation points.
Customize Your Strategy: Financial situations and objectives vary among individuals. It's essential to determine when and how much to invest based on your unique circumstances. Consider beginning with well-established large-cap cryptocurrencies.
Wait for Pullbacks: Patience is a virtue. Wait for significant price pullbacks before entering the market and riding the trend. You can refer to my charts and analysis that provide invalidation points and pullback levels.
Explore Promising Altcoins: Some altcoins, like Ethereum itself, are still haven’t moved much. Allocate a portion of your funds to altcoins that demonstrate strength compared to Bitcoin. For example, coins like SOL/BTC and RUNE/BTC appear robust. You can put aside some fund and start investing in these alt coins.
Plan Your Exit: When entering a position, define profit-taking targets, exit strategies, and predetermined invalidation points. This structured approach will help you manage your investments effectively and reduce risk.
Scenario 2: Experienced Through the Bear Market
For those who have been part of the crypto landscape throughout the bear market, a different set of considerations comes into play:
Understanding Psychological Barriers
Psychological Hurdles: Reflect on any psychological barriers that may have prevented you from entering a position earlier. Understanding these barriers can help you make more informed decisions.
Overcoming Psychological Barriers
The Fear of Loss: One common psychological barrier is the fear of loss. Some investors hesitate to enter the market unless they receive clear "confirmations."
Focus on Long-Term Goals: It's important to recognize that waiting for the "perfect entry point" on short-term charts, such as the 1-hour chart, may not be necessary if your intention is to participate in a long-term bull run.
Establish a Comfortable Position: Consider establishing a position that you're comfortable with, even if Bitcoin's price were to drop to around $18,000 and Ethereum's price to around $1,200.
Diversify and Plan: Maintain a diversified approach, comprising a long-term (HODL), medium-term, and short-term portfolio. This strategy allows you to adapt to market fluctuations and align your investments with your financial goals and risk tolerance.
In Summary
In conclusion, the key is not to let psychological barriers or the quest for the "perfect entry point" hinder your journey in the crypto market.
By following a structured and diversified approach tailored to your individual circumstances, you can effectively navigate the crypto landscape while minimizing risks. Additionally, remember that long-term investments in established coins like BTC and ETH can provide a stable foundation for your crypto portfolio.
