Bitcoin – This Next Move Will Reveal A Lot!
Bullish Formation
Looking to the charts, one can see that a traditionally bullish formation is in play in the form of an ascending triangle. These formations statistically break to the upside 70% of the time, essentially making them bullish reversal patterns. This pattern is busy playing out on the 4-hourly chart and should have an answer for us fairly shortly. Currently, there appears to be some weakness, which could see BTC breakdown. However, “fakeouts” are also a possibility in any formation. As I have mentioned a few times, Bitcoin could actually reach as high as $38K and the bearish scenario would still be in play. This could provide the market some temporary relief, as a breakdown from $38K is extremely likely at this stage.
A breakout might also be short-lived and brought to an abrupt halt at $34k. We need to watch this level very carefully because there is a further underlying message being delivered.
What If The Pattern Fails?
This would be more of a warning than many are perhaps aware of. In a bullish market, bearish patterns are often negated. They often form but ultimately fail. The same applies to bear markets. If a bullish pattern fails it is often because the long-term underlying trend is dominating price action. This would ultimately provide further support that Bitcoin is in fact in a bear market, as opposed to a bearish trend.
Final Thoughts
This is a very important moment and so I have simply posted a very quick update to let you know that this next move is rather important in deciding a longer-term direction. Please exercise caution and do your own research!
Statera – A Concern For Publish0x Publishers & Readers?
Opinions Abound
People will always be quick to offer their opinion in regards to a particular matter that affects them. Obviously, there were numerous suggestions offered by the Publish0x community when ETH gas fees initially began to surge and consequently began affecting payments. My own personal opinion is that the platform should have never removed ETH. Cross-chain activity is everywhere and the platform could have maintained its “0x” branding and simply processed payments on a number of viable alternatives. “Earning ETH” is a tremendously powerful drawcard and conveys a very strong message. I personally believe that Crypto participants really need to stop thinking in terms of the base layer. This is 2022 and there are a lot of solutions to various problems such as scaling and fees to mention a few. However, the decision was made and users have seen various tokens come and go.
Statera Is Incorporated
Earlier this year Publish0x chose to add Statera as a rewards token alongside AMPL, which for the first time I haven’t minded earning. AMPL has remained relatively stable during the recent carnage, so it has offered some value. Credit where credit is due and all that good stuff! Statera, on the other hand, has not been performing too well and I will get into a few reasons and observations shortly. Before I do go there, it is important to note the general performance of Statera and not only during its time as an earning token on Publish0x.
Let’s Rewind
In February this year I posted the article, “Is It Time To Begin Thinking About Altcoins?”. What we then saw a few days later was the local bottom for altcoins. Major altcoins went up as much as 75% from this point and then topped out before heading back down. The LUNA fiasco went on to extend that downside to some pretty crazy lows. What I want to address is the performance of STA during this mini altcoin run. Statera delivered approximately 600% to traders who bought the bottom in February. This also happened to coincide with Statera making a shift to cross-chain activities and being available on the Fantom network. when you look at the price history of Statera you will also note that it is performing as an oscillator, which is generally great for and attracts traders.
A Closer Look
When a project fails or is dying you will see a graph that spikes initially and then proceeds to just continuously hit lower levels. Usually, the lower levels are so low that the graph just begins to flatline. Looking at Statera is rather interesting. Below is the complete performance of Statera, as recorded by CoinGecko. Please note that any performance prior to being added on CoinGecko will not be displayed by CoinGecko. In other words, data that is displayed on CoinGecko is from the time of any particular listing on CoinGecko. All prior activity is excluded.
You will note that after an initial surge, which is quite normal, the price action becomes subdued. What is also evident though is that STA has consistently risen to significant previous levels. This is a typical oscillator and is generally a very good sign when assessing altcoins. If you view the price action of STA in the Logarithmic chart it becomes a bit more impressive.
The initial surge is now very clearly visible and shows STA trading in a relatively modest range when compared to the all-time low. At the time of writing STA is up 925420% from its recorded low.
Why Is It Performing Badly?
Quite simply, all alts are performing badly. What also needs to be factored in here is the fact that Statera is a micro-cap. These things get pummeled in downturns. You are looking at a project with a market cap of $1 million dollars! This is tiny and when you actually zoom out the performance is relatively good. Traditionally, blue chip projects perform the best in bear markets. Looking back over the past year reveals that Cardano is down 72%, while Statera is only down 69%! That’s fairly impressive by any standards. One needs to look at something from as many angles as possible.
Final Thoughts
This is by no means a guarantee that STA will pump again but there are some fairly good signs. What you need to understand is that if this market goes lower these smaller projects will suffer. Depending on your investment horizon, this may or may not be a good idea to hold. Personally, I consider the risk/reward ratio very good, so I am prepared to hang on to my STA. This article aims to give you a bit of an overview and nothing more. Please do your own research in relation to your own investment decisions.
Gaining A Better Perspective Of This Current Market
Multiple Indicators
I use technical analysis quite a lot, as well as fundamentals, and emotional intelligence to try and navigate my way through this market. I believe that due to recent events the market has shifted to a more emotionally interpreted perspective. This has encouraged me to shift my decision-making towards interpreting human behavior, rather than other metrics. It is difficult to explain or unravel one’s approach to the market in one single blog post. It’s a puzzle and I have mentioned numerous ideas, strategies, and viewpoints that all fit into one another at some point. Readers often gravitate towards one or two points and then go on to completely misinterpret my thesis. Furthermore, things I have mentioned in previous posts are imperative to understanding my approach and viewpoint.
Can Charts Lie?
Well, no matter how you wish to interpret the charts you have to agree on one thing and that is that charts are a record of past behavior. Charts are in essence a record of human behavior and because people are creatures of habit and rather predictable we base future predictions on past behavior. In essence, this is exactly what is taking place when traders and investors utilize charting to plan their trades and investments. So, no charts don’t lie but they only communicate the past. This is not nearly as powerful as we would like it to be but it’s the truth. Psychologically, investors will be drawn to the bargains on offer in the market. Most will find it difficult to resist. I am choosing to resist at this point, as I am interpreting human behavior and expect this emotional response to continue in the market prior to reality setting in. In reality, this market only shifts bullish above $40K. Any move up now, I am interpreting as a “long trade” in a downtrend. That is exactly why I am choosing to trade and lay off accumulation.
Why Not Now?
When BTC was trading in the mid 30K to $40K zone things looked a lot healthier. You don’t buy something because it’s cheap or oversold but rather because of confluence. In other words, other factors combined with the fact that it is cheap or oversold provide sufficient confluence to step in confidently. Currently, the fact that the market is oversold is to me an isolated event in a bearish backdrop. It’s just not sufficient enough for me. That being said, it can go up but at the current moment, I would be violating my own “rules” to open new long positions. As mentioned, I am approximately 60% in the market. It would be foolish and irresponsible to increase that based on a single indicator.
Final Thoughts
Come hell or high water, I am waiting for more data and confirmations from the market before I increase my exposure. I am not a gambler.
Crypto Market Triggers Alarm Bells – Time To Short?
What’s The General Mood?
Looking at what analysts and others are currently suggesting only serves to provide more confusion. Some are extremely bearish, while others are fairly bullish. Analyzing this behavior does however offer more value than the predictions being made. If you have been through a few Crypto cycles before you will know that there is one very clear indicator that a bottom is approaching and that is complete desperation. At this point, altcoins are usually so far down that investors literally feel sick. Hope has been ravaged and portfolios obliterated. The fact that many are still bullish tells me that maximum pain is still much further down.
The Greatest Misconception
Many still can’t understand the reasoning behind holding stablecoins and cash in a Crypto portfolio. The common response is always wondering how money is made holding stablecoins. If your portfolio is only designed to profit it’s simultaneously designed to fail somewhere down the line. People who don’t understand what is going on in such a scenario are one-dimensional investors. These are also the ones who get wiped out in a market crash. There is absolutely zero risk management, I mean how can there be if such a question is posed. I am not going to go into further detail apart from mentioning the obvious. Those who rebalanced their portfolios above $50K are doing a lot better than those who hold zero stablecoins or cash.
Let’s Look At The Basic Math
As mentioned, I am currently sitting at just over 40% in stablecoins and cash. I am positioned in such a way that I am able to operate no matter which way the market decides to go. Forget about gains for a second and focus on loss. This may be a shocker to those who have never done the math. If you are fully exposed and your coin drops 90%, which is still fairly modest in a bear market, you lose your muscle completely. Let’s use $100 as an example. The all-in investor will see his holding drop to $10 in a 90% drop. The investor holding a 50% allocation in stablecoins will see his portfolio drop to $5 in coin allocation plus another $50 in stablecoin allocation.
You Might Want to reconsider
This means that the all-in investor has to experience 1000% growth in order to regain his $100 valuation. The investor who hedged his portfolio only has to realize a return of 82% in order to regain his $100 valuation. Can you even compare the two? That’s how you make money holding stablecoins! Not to mention that you can earn interest on top of that while you wait. One-dimensional strategies are weak and much like gambling. A portfolio that is not carrying any “Dry Powder” is handicapped in my opinion.
Am I Shorting?
Despite already having a good hedge in place I am very slowly beginning to build a short position in order to further cover my “long” portfolio. This will however be very marginal and reserved. My decision to include a small short is that I don’t see how we can avoid further downside. As mentioned before, even if BTC moves to $38K in the short-term it can still suffer further losses in the medium term. Either way, I have a number of planned moves for certain levels and certain market conditions that will trigger prepared strategic responses. You know the old saying, “failing to prepare is preparing to fail”.
Wishing you all well as we make our way through this challenge, simultaneously remembering that fortunes are made at the greatest point of pain!
Portfolio Construction In A Bear Market
Diversification Is Key
So, I have tallied up my different stablecoin and cash holdings and am a lot higher than I expected to be, which is great! I am currently at approximately 40%, which is where I was when I made the initial shift in May of 2021. I have somehow managed to time the market fairly well this time around. Without Knowing, I made a few shifts literally days before the LUNA fiasco, which has helped a lot. What you need to remember is that the larger you are able to grow your portfolio, the more you are able to protect and hedge it. Let me explain. Someone with a $10K portfolio will look to have as much exposure to BTC and alts as possible. Someone else with a $100K portfolio can have the same level of exposure by only needing to risk 10%. The small portfolio holder battles to exercise good risk management based on what I have just stated. However, this is exactly why it’s so important. As your portfolio grows, you should be looking to decrease risk.
Cause & Effect
In a market crash, the smaller portfolio will be decimated, while the larger portfolio will barely experience any real loss. This is why I am always looking to slowly increase my stablecoin holdings. Building a portfolio that can skyrocket in a bull market and offset the loss in a bear market is all about diversification and appropriate holdings in stablecoins or cash. This is why I think it is a better idea to apply the 50/50 rule at this point. Bitcoin is not bullish and will not be until we settle above $40K. This means that even though there may be surges to the upside there is still a very real risk of dropping a lot lower. There are some calling for a bottom at $20K, $15K, and even $12K.
What is important to note at this point is that all three targets are actually within the realm of possibilities. There has been a lot said about the death of the four-year cycle but it still looks very much intact at this point. A typical bear market drawdown is approximately 80%, which would bring BTC down to the 13 800 level.
What If BTC Pumps From Here?
So, what happens to a well-hedged portfolio if the bullish scenario plays out? Quite simply, it pumps! If your holdings are perfectly balanced in that 50% is allocated to stablecoins or cash, then your portfolio will increase at half the speed of the market. A 30% rise would imply a 15% rise. If it does however decide to dump, a 30% drop would only imply a 15% drop. Appropriate portfolio construction is what removes the gambling aspect. Once a confirmed bull season is in play, investors can choose to disengage stablecoins and begin deploying. There is tremendous safety in this approach and you will notice that one particular element is kept very well in check.
Greed
That’s right, the culprit of pretty much every sad story. Keeping greed in check is in line with remaining unemotional. Emotions will get you rekt every time, which is why a well-planned portfolio and investment strategy are key because without them you have nothing but emotions. That being said, formulating a strategic approach as a reaction is not nearly as effective as a predetermined strategy that is already in place. Many will be learning a few hard lessons at this point but that’s how it goes. We’ve all had to pay our “school fees” at some point and even still experience hard knocks from time to time.
Final Thoughts
The best way to find out how well you have structured your portfolio is to ask yourself two very simple questions. What happens to my portfolio if the market pumps and what happens if it dumps? An honest answer will paint a very clear picture of how effective your risk management is. Experience will help you to make better decisions over time and simultaneously become more effective as an investor. These are merely my own thoughts and opinions and should not be considered investment advice. Wishing you well on your investment journey!
Hive – The Best Place To Spend Your Bear Market
It’s Not Looking Good
The market continues to show signs of fear, uncertainty, and doubt and to some extent, it is to be expected. Yes, in time, recent events will be yet another victory for Crypto. However, it is a process and not one that will unfold overnight. The Terra fiasco was just the final blow to confirm where we would be heading next. What is important is for the community to remain positive and engaged. This is where Hive comes in and provides the stage for the community to engage, encourage, and discuss what’s happening in the Crypto world. There are just so many benefits to being a part of this community, especially now!
Maintaining Focus & Commitment
It’s actually amazing how every time the market heads into a new winter the majority jump ship. What this actually reveals is a lack of conviction, dedication, and stubborn persistence. One can’t actually argue that it is foolish to remain committed because every single bear market has been followed by a significantly higher bull market. Those who have persisted have always been rewarded. Hive helps to make a difficult discipline more attractive. Earning HIVE and Hive-based tokens while you continue to push forward is another motivation that perhaps many still underestimate.
One of the most important dynamics of Crypto is accumulation and this is something that is always best executed in a bear market or correction. Perhaps I am different but I become even more bullish during bearish times.
The Best Of Both Worlds
Perhaps this is because I understand and have experienced the powerful dynamic of “stacking” when the price is being dragged along the floor. However, this is only powerful if you have the capital to deploy. Exhausting your capital too early is a lot worse than a little too late. That’s a mathematical certainty. Hive provides the opportunity of being able to earn the native token of an up-and-coming Web3 project, as well as a stablecoin in the form of HBD. This can all be achieved without any financial risk, as anything freely earned cannot incur a loss. I decided early on that I would maintain my earned HBD as I find increasing my stablecoin allocation alongside my portfolio very important. Hive not only provides a Crypto income source but also a hedge for those who maintain their 50/50 earning ratio.
Those with not much capital could actually find this to be an amazing opportunity as they are given the opportunity to grow their portfolio and have a “built-in hedge” thrown into the deal. The recent price action in the altcoin market has left those without stablecoins wishing they had allocated at least 10% when they had the chance. Hive offers an opportunity to begin working on this idea and even if not this time around, will at some point provide much-needed support. I will actually be rebalancing my portfolio over the weekend or at least documenting the changes I have made over the past month. I am interested to see where my stablecoin allocation will be. It will definitely be over 25% and that includes a small allocation in HBD. An allocation I am only looking to increase.
Insights & Information
Not only are members of the community able to interact and earn but Hive is also a great resource for information, news, data, and opinions related to the Crypto world. Leofinance is a great wealth of information and data, with a number of authors who consistently produce high-quality content. Those who push through this time and find creative ways to accumulate Crypto along the way are the ones setting themselves up for the next bull market. Once you embrace this mindset it actually becomes difficult to leave the bear zone because you are wanting to accumulate as much as you possibly can. This is the time to get active on Hive, especially if you haven’t been doing so already. Many of us arrive daily and will continue to do so regardless of what the market does.
Final Thoughts
Spending your bear market on Hive is something that will most definitely reward you at a later stage and even in the present. It’s a great place to be and I hope to see more growth in the ecosystem and community, regardless of market conditions.
The Shift To Quality Will Now Commence
It’s Always The Case
During any bearish or brutal season, one will always see and experience a shift to quality. Traditionally, when the market drops, there is a move to Bitcoin, stablecoins, and cash. This ultimately causes Bitcoin dominance to rise. Despite the great bounce today, it is simply one day and does not change what has taken place over the last number of days. As mentioned in my previous post, the breakdown to $25K has opened the door to further downside. I would be thinking more bullish had we remained in the sideways “box”. A few months ago I predicted that we would experience strong moves in May. I revisited this prediction about a month ago in a post published on the 12th of April when the market was looking a lot healthier. Note that at the time I was leaning more towards the bullish side but made it clear that if the mood of the market were to change we should expect the strong moves to be to the downside.
That being said, an extension to the downside should also be factored into an extension of the previous range. My expectation has been and continues to be in May, as outlined a few months ago. My expectation is a strong break to the upside towards the end of May. However, that could also be to the downside depending on what transpires closer to the time. At this stage, I am still expectant of a strong move north sometime in May.
I think we can all agree that the Crypto market has suffered a blow and that significant knocks require time to recover. A good bounce is a healthy reaction and does not necessarily imply that the market will continue edging higher. This can be likened to a person in an accident. The person maintains composure and makes decisive decisions, only to later lose composure once reality kicks in and the adrenaline has worn off.
I Don’t Believe The Bottom Is In
It definitely does appear as if we are to go lower, it might only be in the coming days or weeks but I don’t think it can be avoided at this stage. I would really love to be wrong in this instance but it does appear to be rather unlikely. I address this scenario in more detail in my recent article, “My Strategic Approach To The Current Crypto Market”. Once we experience another correction, I believe the market will reconsider. At this point, I would expect to see a “shift to quality”, as investors will now be extremely cautious. The recent events surrounding LUNA are causing investors to reconsider their own personal risk profiles.
If the market is thrown into a violent downturn unexpectedly shortly after losing two Top 10 projects it will initiate a shift to what is perceived as strong and of real value. At this point, speculation would take a back seat. This is why my passive income models that were being utilized to buy alts will now shift to funding trading accounts. I believe that I will be able to secure excellent entry points by utilizing this approach.
It Works Both Ways
Just as an event like the one we have just experienced can strike from nowhere, so can a bullish event. Always remember that news or announcements trump technicals and even fundamentals, at least in the short term. A bullish pattern can be invalidated by a bearish event or announcement and vice versa. This is why the committed are often the ones to succeed. They are watching, taking note, and are able to react timeously.
My Strategic Approach To The Current Crypto Market
Welcome To The Wild West
There is not a single person in Crypto who has not been affected by the LUNA fiasco. This is a typical example of how quickly and “easily” things can turn in this market. I have quite strong opinions in regard to LUNA and Do Kwon but won’t elaborate any further. I will however mention that Luna was a project that I avoided throughout the hype of 2021 and 2022. For whatever reason, I just had a “check” not to invest in it. I respected it and chose to go with my “gut”. Hindsight has obviously exposed the flaws, to some extent, responsible for this disaster. As I am writing, Bitcoin is trading above $30K, which is a comfort. However, this might be temporal, as you don’t simply “bounce back” overnight from a situation like this, especially in this current economic climate. The charts also seem to be echoing that there is a tremendous struggle ahead. Bitcoin once again is faced with a fresh challenge.
Let’s Pull Up The Charts
So, if we zoom out and take a look at the weekly chart, we can begin to see how this could potentially play out. Bitcoin traded predominantly sideways, which I predicted when it first began trading the range. Those reading my posts will be familiar with my personalized term, “Bitcoin’s Box”. This can be seen in the purple channel below. Losing the support and breaking down is where things began to get shaky. However, the real blow came when we broke the 29K support level. As you can see, Bitcoin had respected this level extremely well over an extended time frame.
The falling wedge plotted out in blue, reveals a very scary scenario for Bitcoin. I will say that in these particular pattern formations the breakout often occurs earlier and does not necessarily imply that BTC has to hit the $12K level. Bouncing off of the support of this wedge is at least a good sign but I would not get excited just yet. Bitcoin could go as high as $38K before being rejected at the top of the wedge, which could bring us down a lot lower than $25K. However, a breakout from this wedge could also happen but is the less likely scenario due to obvious reasons.
That breakout would also need to be confirmed because if it’s a “fakeout” then we fall back into the wedge and are subject to the “rules” within, which forces bearish price action until such a time as the resistance is broken and definitively confirmed.
Isn’t This Good For Traders?
Exactly, which makes me extremely happy about a recent decision to convert all my XTM to USD in order to fund trading accounts. Obviously, my trades are underwater at the moment, which brings me to my next point of how I am choosing to play this. A few days ago, just prior to the Luna carnage, I sold some ETH at a relatively decent price and am holding it in fiat. This is an emergency allocation that I am hanging onto as Dry Powder. In the event that the market really crashes, I want to swoop in. I still hold my stablecoins, which have been of great assistance during this chaos. As mentioned, these simply do not get sold.
Minor Adjustments
So, I have chosen to utilize smaller passive income models to further fund my trading accounts. I am aiming to get these into the green by slowly adding capital and pulling my average down. I trade leverage very cautiously with a rather unique strategy that gives me an advantage against the “liquidation dynamic”. Ultimately, I want to begin increasing my trading activity and am fine with waiting out my long-term portfolio appreciation.
Due to recent adjustments and holding a very large percentage in stablecoins, my portfolio continues to only be down 3% in BTC terms. The dollar value is more but ultimately, I am most concerned that I maintain my “peg” to BTC, as dollar fluctuations are temporal. As always, this is simply my approach and interpretation and not financial advice. All the Best as you consider your own options and path forward.
The Beauty Of “Real Stablecoins”
Portfolio Construction
I tend to repeat myself sometimes but it’s only because I consider certain approaches and practices absolutely imperative and I want people to “get it”. One of the most important practices that I continue to drive home is the need for a healthy stablecoin allocation. I am not talking about algorithm-based stablecoins like Terra’s UST but rather stables such as USDC and BUSD. Personally, I have always felt the safest around these two options. Constructing your portfolio is in many ways an art form and something that requires thought and planning. Today has been an absolute bloodbath and to be honest, I was avoiding looking at my portfolio. However, when BTC retested 29K, I decided I better take a look. My stablecoin allocation is now approximately 25% and so was feeling very thankful that I have managed to avoid the temptation to utilize this particular holding.
Did You Notice?
One thing that I noticed is how well ETH performed today in comparison to the rest of the market. This can obviously change but at the time of writing, ETH is down 9% for the day and is only down 2% more than Bitcoin over a seven-day period. I currently hold an equal amount of Ethereum as I do stablecoins, which means that these two holdings make up approximately 50% of my portfolio. This has worked out tremendously well for me during this time. Looking at my portfolio in BTC valuation, I have only lost 3% and this is all due to my stablecoin and ETH holdings. Obviously, in dollar terms, I have lost more as BTC has also dropped. However, the BTC value is important. If I can hold alts and offset the loss by holding large holdings in stables then I am happy.
It’s An Insurance
As I have mentioned before, I intend to hold my stables as insurance. In other words, I am never looking to sell them. Celsius is a great choice to hold stablecoins and earn a fairly good interest rate. If you choose to earn your rewards in CEL when the market is low you can actually increase that percentage by selling your CEL tokens in a bull market. What you are in essence doing by utilizing this simple strategy is buying “altcoins” with your interest. So, you are not spending your stablecoins and yet simultaneously growing and accumulating an altcoin holding without using any of your own capital.
BlockFi Has An Added Benefit
Being able to earn all of your interest in BTC is a great perk that comes wrapped up in the BlockFi service package. Users can also choose to earn their interest in ETH if they so choose. This enables you to earn Bitcoin via your stablecoins with little risk. There is always risk involved but the risk is considerably less. DeFi and stablecoins can work but then it’s basically the same as going into the market anyway, which defeats the objective. It’s about preserving value, while simultaneously gaining further value by earning interest in BTC or ETH. This dynamic can be very profitable over time and is able to hedge against inflation.
Don’t Only Consider The Bullish Case
Most investors make their decisions based on how high a certain project can go. They look for projects with great upside. I do this as well but you have to get your allocations correct. You can’t be allocating large percentages of your portfolio to projects with great upside potential because as the saying goes, “high risk, high reward”. Portfolio construction is imperative to success and on a day like today, there is no better example. These things happen and you have no control over them. What you do however have control over is how you structure your portfolio.
See you all soon and remember, “this too shall pass”.
How To Protect Yourself & Even Benefit In A Market Crash
It’s A Given
Even the most bullish and groundbreaking market will experience corrections. This is the reality that so often escapes consideration. After being involved in markets for some time, I began to see how important it was to factor this dynamic into my strategies. These events can be triggered by multiple factors, making them even more difficult to discern. That being said, as traders and investors, it’s still wise to try and keep in touch with the market. However, that is simply not enough, as everyone gets taken by surprise at one point or another. So, what do we do then?
Factor It In
It seems rather obvious but the only way to protect yourself is to plan for failure. This sounds counterintuitive and even strange to some but it is actually one of the most valuable lessons I have ever learned. It’s not that you don’t plan for success but that you also plan for failure. When you are in a mall, school, or even office block you may be required to take part in a fire drill. This is where an evacuation plan is put to the test. Yes, planning for failure, not because you want it to happen but because it does happen.
You have to have a plan or course of action if you wish to survive. This applies to markets as well and you will be surprised at how many individuals lack this basic wisdom. I will outlay a few examples of how to structure a basic plan of survival that can even be beneficial in some instances.
The Basic Hedge
Those who have been following my journey will know that I began shifting to stablecoins the first time BTC crossed $50K in 2021 and have maintained a healthy allocation ever since. At my highest level, approximately 40% of my portfolio was in stablecoins. Currently, my exposure to stablecoins is just below 20% and I intend to keep it that way. Actually, it will continue to grow as I am busy building up a few trading accounts, which are denominated in USD. This brings me to the next viable option.
Trading Futures
The great thing about futures is the ability to profit regardless of what direction the market chooses to take. However, this is perhaps not one for everyone, as you should ideally be experienced when it comes to trading with leverage. That being said, there is no better time to open up a position than after a massive move. Trading is not the best way to generate an income but it can be a great wealth builder. Big moves up or down ultimately create tremendous trading opportunities. The only problem is that this is not a daily or weekly occurrence, which is what is required if you are looking to generate a monthly income. The upside then to a collapsing market is that it simultaneously creates opportunity. The best trades or even investments are those made after a big correction or crash.
You can read my recent article, “How To Build A Trading Account From Zero” if you are thinking about traveling this particular path. You will also find the best exchanges to utilize as a beginner.
Creating Content
This can actually be one of the best methods but only if you are prepared to rack up tokens and forget about them. Looking back on some of my articles from Publish0x, I was somewhat surprised. Some of the articles that I published in 2020 were displaying earnings of $60 to $70 each when BTC was up at approximately $60K. This is a good investment of your time but only if you are prepared to hodl. Obviously, at the time of writing, they were worth a lot less. There are also multiple opportunities available to content creators outside of Publish0x. Hive is an excellent option because it also incorporates stablecoins. With your earning ratio set to 50/50, you are able to receive 50% of your earnings in HBD! This means that your stablecoin allocation is growing with the additional investment of capital. So, half of your earnings are safe in terms of depreciation outside of inflation, while the other half is captured in an asset that will hopefully increase in value over time.
This idea becomes even more attractive when you consider that HIVE is currently trading at $0.64 at the time of writing and has been as high as $3.41! Another important aspect to remember is platforms such as Publish0x, Read.cash, and Noise.cash all operate on a USD model, which brings me to the next approach.
Dollar-Based Earnings
In relation to the platforms that I have just mentioned, there is a dynamic that works extremely well in downturns. Due to these platforms operating on a dollar-based model, the amount of coin or token that you receive increases as prices depreciate. The lower the price, the more coin you receive. However, as previously mentioned the power of this dynamic is only truly realized when prices recover. For instance, Statera is currently trading at $0.017 and can be earned on Publish0x. The all-time high is $0.46 and even if STA were only to return to the $0.10 price range it would make a significant difference to the value of your holdings.
Another side to the dollar-based model is platforms that not only pay you based on a dollar model but also retain and record the value in dollars. What this in essence means is that if you earned $10 prior to this recent crash, you would still have $10 regardless of price action. In other words, your capital would only be exposed to market conditions once you withdraw it. A popular platform that uses this model is Cointiply. Cointiply displays your earnings in USD and BTC but hold them in USD. This causes your BTC valuation to go up and down with the market. The USD value is however unchanged and can only increase as you earn more. Cashing out from Cointiply and other similar platforms is best to do at the base of a crash. This way you are able to receive more BTC, Doge, or whatever coin you decide to choose. FireFaucet earnings are also locked in USD.
Passive Income Structures
This is one of the best ways because a guarantee of new capital every day allows you to buy the opportunities that you manage to identify. Capital can be used to DCA or wait for a confirmed bottom. A reversal can be an even safer point of entry. Some passive models will generate alts by default and can simply be hodled, or swapped for a preferred project. Heavily oversold projects can also be an option, provided they are quality. It is also wise to once again have passive models that also generate stablecoins. Be sure to maintain a healthy allocation to stables. If you have a lot of skin in the game then increasing your stablecoin allocation makes even more sense, as you won’t really be sacrificing potential gains. Greed will entice you to put everything in alts, or even BTC but maintaining a level of stability is vital.
Final Thoughts
Some of these ideas will be smaller, while others will be larger, in terms of dollar value. What is important to remember is the sector that you are exposed to. There will be many projects that still go on to realize massive surges in price. In these particular instances, it becomes less important to have “heavy bags”. This is also why doing significant research is imperative if you truly wish to benefit in time. Investing is an exercise that requires time, even within the Crypto space.
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