A Clear Plan
No matter what you decide to tackle in life you always need a plan. When I take a closer look at my own analysis of Bitcoin I can see a potential bottom around September. So, I am working around that timeframe. This could come sooner, or even later. However, September appears to be an acceptable target. Time is not the best metric for discerning price action but it is the one everyone seems to be interested in. It is also helpful in planning your course of action, as I am busy doing. I have been posting articles addressing further downside since the LUNA debacle. The breakdown, unfortunately, opened up the door to unavoidable further downside. This tragic event caused me to cease altcoin accumulation immediately and begin focusing on trading.
Trading & Waiting
My game plan for the next couple of months is to simply trade while I wait for the bottom to arrive. I am obviously also remaining busy with content creation and other small ideas. Portfolio valuations suffer tremendously in a bear market. Being able to trade, especially shorting, can really be of significant assistance. Those who remain busy and focused during these times are able to enjoy additional growth once the market turns. I have heard a number of people mention that a bear market is a great time to take a break. I however do not agree with this type of approach but prefer to push even harder during bearish periods. Waiting does not necessarily imply inactivity. I prefer to remain focused and committed while I wait for specific moments in the market.
An Opportune Moment
Ultimately, I am holding out for much lower prices, especially in regard to altcoins. It takes quite a lot of self-discipline to not deploy one’s Dry Powder, as alts continue to plunge. Having decent exposure already in the market definitely does help, as you are assured of gains. However, you can’t compare it to buying the absolute bottom of a bloodbath. Buying prematurely can cost you, whereas buying late will simply mean that you miss out on gains. This is an example of risk management that the majority of retail investors don’t seem to understand. It’s that “all or nothing” mindset, which works well in a casino but not for investment strategies.
How 5% Matters
Waiting for a bottom confirmation is very important when it comes to alts due to the extent of the losses experienced in altcoins. Most don’t consider mathematic percentage relativity. Thinking that buying 5% higher is not a big deal and that’s true when it comes to modest gains and losses. Here’s an example that shows how 5% can literally change the entire ROI horizon. An altcoin that drops 90% needs to generate a 1000% return in order to break even. An altcoin that drops 95% needs to perform a 1900% return in order to break even.
Once losses reach heavy double-digit losses it becomes more and more difficult to regain previous levels. LUNA was a good yet exaggerated example of this. Buying a bit later when the market is heading back up is much better than buying too early. Not all coins recover and I think many take it for granted that they do. When you consider this reality it definitely helps to motivate astute investment strategies.
Although I am expecting a bottom within three months, I am generally open to the idea that this can play out within two to six months. I will be able to revisit and assess once more time has passed. The stock market is also going to play a part in how quickly this rolls out. We could see the FED become more dovish in the next few months which will also be an important contributing factor.