Market Update: What’s Going On And How To Position Yourself
Markets are fragile right now, but that’s exactly when positioning yourself within the market matters most. In this post, I’ll break down what I’m currently buying (Layer1s, stablecoins & leveraged tokens), how I’m generating passive income, and what I expect to see unfold in the market. I must say, I was personally hoping the bullish action at $70K would have continued for another month or so. It would have been the perfect exit point for my medium-term holds that I have been waiting to cash out.
Unfortunately, it was not to be, and I missed out on what would have probably been a great trade. Anyway, as I have mentioned multiple times, downtrends are simply perfect for building and accumulation. As mentioned in my recent post, utilizing passive income mechanisms is a great way to accumulate fresh piles of crypto without any personal expense. DePIN, of course, is one of the most prominent and rewarding free opportunities. Get started with DePIN here!
This is a point that I will keep drumming because it is so vitally important. When prices drop, it is difficult for even the most experienced of us to go in and purchase more. However, this is exactly what you need to do. The closer to the bottom, the better. If you have passive income rolling in, it is much easier, as no actual expense is incurred during the acquisition. You really could not ask for a better opportunity, which is why passive income is an absolute must!
Modest Additions: A Smarter Way To Build Positions Over Time With Solana & Avalanche
When it comes to acquiring new crypto holdings during this dip, I am modestly adding to a few Layer1 blockchains I am quite bullish on in the future. Being able to stake these coins is an added benefit that seals the deal. Despite all the recent drama with Solana, I am slowly building up my stack. Fantom is another Layer1 that I really like for the long term. I began adding to my existing stack again at the $1.35 mark about two months ago, just before it broke out to $3.30!
I am also considering Avalanche (AVAX) at these prices, especially since I said that if it dropped, I would pick some up. These allocations are very modest and are performed every few days, especially as further downside is expected. Top Layer1s are also a strong choice, as they are established leaders. Furthermore, Layer1s are foundational and essential for alternative crypto projects. Solana is also a strong competitor to Ethereum.
My Current Focus In The Market: Why Stablecoins Matter Right Now
I am choosing to shift current passive income into stablecoins. I have a stablecoin allocation that I never sell, which serves as a hedge to soften downturns and bearish market cycles. However, I would also like to have a stablecoin coin allocation that I can deploy in the event of a significant crash. Buying the absolute bottom of a gut-wrenching dump is actually the most effective strategy there is. Forget high leverage; this works well with little risk. A dump will always get a bounce, even if it is a dead cat.
It is always wise to have stablecoins on hand, even in a bull market. This is something that I have alluded to in many of my writings. Furthermore, if you are also earning yield on your stablecoins, you are in an even stronger position. Yield generation becomes even more powerful when this practice is paired with a bear market. Such a strategy can place one in a very powerful position at the base of a bear market. For free passive crypto income ideas, visit this article.
Hive Backed Dollars (HBD)
The Hive stablecoin is also an option, especially when the price falls below its $1 peg. This stablecoin also offers 15% savings, which is the highest I know of. Nexo might be higher, but that is relative to loyalty level status, so it is not available to everyone. Even if the market enters a prolonged sideways trend, it is still a good idea to have stablecoins on hand. Even a sideways market will dish out the occasional bargain.
HBD often loses its peg by a few percent, making for an opportune time to acquire a stablecoin at a discount. This is usually a momentary occurrence, as HBD usually trades between $0.98 and $1.00. Apart from the Hive platform, HBD can be acquired on Upbit, a centralized exchange.
Why Leveraged Tokens Matter (And How They Really Work)
I am also keeping an eye on a few leveraged tokens that could perform relatively well if the market goes higher from here. Entry points are beyond vital with these instruments. If the market does, however, break down, the bearish version of these tokens can also be used to profit from the negative price action. These are very effective instruments, provided the move is significant. A prolonged trend can also compound profits significantly.
I would suggest that inexperienced traders avoid these instruments, as the outcome could be quite devastating. One needs to have some experience trading with leverage and an understanding of its effects. Due to compounded leveraged returns, capital allocation here can be very modest. With not much at risk, decent gains can be realized, ultimately boosting your portfolio.
Conclusion
So, to wrap it up, my current focus is to purchase stablecoins with freshly generated passive income. I am also picking up a few Layer1 projects when the price is right. On top of that, leveraged tokens are in the picture but not yet entirely active. Preparing for any market condition is an approach I actively endorse and use. Markets are, in essence, binary, and being on the wrong side without a hedge can be difficult to endure.
That being said, a lot can happen between these two points, which is where even more planning comes into play. However, I find a stablecoin-heavy approach wise given the market’s condition. Furthermore, they will be producing additional gains. Thanks for stopping by, and see you in the next one!