Tried & True

One of the best ways for anyone to get ahead in their Crypto journey is to identify and accumulate the “winners of tomorrow”. This often becomes exceptionally risky, as it is often a case of “all or nothing”. I have previously addressed some of the most important “identifiers”, at least in my opinion, when it comes to selecting potential altcoin gems.

Whether or not another altcoin season is on the horizon or not, it is however time to begin preparing for the next cycle peak. During the early months of 2022, I published my bear market bottom predictions. The chart below was initially posted almost a year ago and seems to have aged relatively well.

I did however remain cautious during 2022 and warned that a drop to $13.8K was a possibility, due to the macro picture, as well as my initial target being triggered so “suddenly”.

Looking at the chart above, there does appear to be a fairly convincing bottoming formation in play. However, one does still have to factor in recessionary concerns, and a possible stock market correction. In the same breath, one cannot remain forever cautious. At some point, one has to look at long-term altcoin accumulation, while simultaneously remaining vigilant.

This Is When You DCA

A dollar-cost averaging strategy is for ranging, or appreciating markets, not collapsing markets. I mentioned this a number of times last year. This has everything to do with risk management, and nothing to do with “luck”. Statistically, Bitcoin retraces 85% during a bear market. Anyone accumulating altcoins when BTC has only retraced 60% is going to get hurt, plain and simple.

Bitcoin Is looking relatively good at $28K. However, altcoins are still heavily discounted in relation to their all-time highs. Investors underestimate the enormous difference between a 90% correction and a 99% correction. They appear to be almost as equally severe. However, looks can be deceiving. A coin that is down 90% needs to appreciate 10X in order to regain its previous high.

On the other hand, a coin that is down 99% needs to appreciate 100X in order to regain its previous high. This is massive, it’s a lot easier to experience a 10X return than a 100X return, and this is what investors need to consider when they begin entering the market. Everything is relative, and if you have not studied the relativity ratios in play, you are likely to experience a rather unpleasant surprise later on down the road.

However, much seems to be aligning in favor of altcoins, at the moment. I must however stress that this is not a guarantee, and one has to be mindful of the potential risks associated with an extremely sensitive macro backdrop. I have begun moving into my altcoins of choice, but am simultaneously still aware that we are not necessarily out of the woods just yet.

Final Thoughts

Even in the best of times, investing in altcoins is risky, and investors should always keep this in mind. When an altcoin moons it makes the whole “idea” look so easy, doesn’t it? However, when an altcoin is decimated, it makes the idea of investing in altcoins appear rather careless and dangerous. Once again, good risk management is imperative and can mean the difference between carnage and survival. All the best, catch you next time!