An Encouraging Start
Altcoins have been on an absolute tear of late, especially Solana, and Solana-based tokens. With Bitcoin still trading below $40K, it’s an encouraging start, and is perhaps indicative of some serious altcoin moves this season. Yes, markets are seasonal, and we have endured a long and cold Crypto Winter. However, the sun is breaking through, and the tide is beginning to turn. Many altcoins are up hundreds of percent over the past month, with some even experiencing triple-digit gains.
That’s the altcoin market for you! Exciting, volatile, and extremely risky! It gives as good as it takes. Actually, it usually gives a lot more than it takes, especially if you know how to maneuver your way through its challenging terrain. Personally, I have been doing a ton of research, while still endeavoring to trade, as well as create content. I am already starting to feel the heat, and we are only getting started.
My day begins at 5 am and sometimes only ends at 1 am. This is standard practice during a bull market and extends over weekends as well. Needless to say, it can become rather strenuous. However, I still seem to require more time. There’s so much I am hoping to accomplish during this season, and it’s definitely going to take work. That being said, I understand that altcoins are the lifeblood of any bull market. It’s all about being in the right coins, and at the right time.
We have discussed early entry points on a number of occasions, and it’s a simple formula of gaining early exposure to potential altcoin gems, and then slowly building upon that solid foundation. Allowing enough “room” before adding to a position is important if you wish to protect your entry. If you are like me and are also building leveraged long positions, it’s no longer important, but imperative. Fortunately, in terms of my 10X Solana position, I managed to begin building between $18 and $22.
Now that Solana is trading above $60, I have plenty of play to add to my position every time the market makes a serious correction. In regard to Solana, it has only really experienced a decent correction of approximately 15% during the initial stages of this pump. Eventually, it will retrace. It’s at that point that I will add to my position. Adding after a dump increases the safety of your trade, and ultimately works to promote excellent risk management.
A Defining Difference
Hodlers are unable to understand this approach because they are not working with leverage. If, as a leverage trader you don’t allow time for maturation, a 10% dip will liquidate you. That doesn’t mean that you are now sitting in a loss like a hodler waiting for a recovery, but your entire capital allocation is gone, never to be returned. It’s game over. Due to my risk management practices, I can now endure a 65% correction without being liquidated.
I can also add margin, if necessary, and ultimately reduce that level. An inexperienced trader who goes in guns blazing is wiped out on a 10% dip, which often happens, by the way. As I mentioned, altcoins are the secret weapon in this market, and if you are able to build and protect a leveraged position early on in the bull market, you are pretty much set for significant gains. Yes, nothing is perfect, and there are no guarantees, but this is an incredibly powerful strategy, provided it is well executed.
Fortunately, it’s still early days, so I am looking to create as much distance between my entry point and the current price. Once that chasm is significant enough, I modestly add to my foundation, while simultaneously protecting my entry point. Once the bull market matures, I can halt building, and begin skimming 5% at a time with every significant pump. This way, I regain my initial investment, along with some decent profits. Remember, I exited half of my portfolio in 2021.
When Bitcoin first hit $65K, I pulled the plug on well over 40% of my portfolio and moved into stablecoins. If you don’t recoup and harvest you can end up holding your bags all the way to the bear market bottom, which is usually a 95% drop for altcoins. This is, of course, measured from the peak. I will offer this warning early on in the game:
Be careful of greed!
It can rob you of everything and has done it many times before to ill-prepared investors. It’s all about predefined disciplines and then sticking to them, regardless.
Final Thoughts
However you go about creating exposure to altcoins, please ensure you have done your due diligence, and are well acquainted with the risks involved. Even in bull markets, the corrections are heavy. Usually between 30% and 40%. You have to be prepared, both mentally, and emotionally, for the Rollercoaster that lies ahead. Anyway, that’s it for this one. See you next time!
Sapphire Crypto 