Don’t Wait!
One of the worst mistakes in a bull market is not making the preparations required for a smooth transition near the cycle top. This is especially true if you have multiple positions, opportunities, and yield-bearing investments. Every situation is unique, so one must devise a plan that addresses each position or opportunity within your portfolio. Not every portfolio is an investment portfolio.
Many Crypto enthusiasts have yield-bearing portfolios of opportunities such as DePIN, DPoS, and other DeFi and passive income ideas. Income ideas that earn fiat currencies or stablecoins can be excluded unless altcoins are being utilized to produce a stablecoin income. Many investors within the Hive ecosystem will liquidate their altcoin positions in favor of HBD once they discern a cycle top.
Because each situation is unique, points of interest must be highlighted in advance. This is related to price, time frame, and other key levels. Many investors have a figure in mind regarding their profit-taking strategies. This can be a good idea. However, an unrealistic expectation will mean your target won’t be realized so that you will suffer the same fate as those without an exit strategy. This reveals how important it is to remain up-to-date and prepared.
Perfection Is An Illusion
Ideally, everyone would like to call the market top, unload, and experience maximum profitability. This, however, is unrealistic. Planning and paying attention to each aspect of your portfolio is your best chance at maximizing the bull market effect. I have only timed a market top ideally once. This was in 2017 when BTC hit $20K. I knew this was a psychological number and wasn’t going any further.
I sold on the day of the all-time high. I must check if I can access that account, as the records should still be available. In the previous cycle, I made a significant exit at $65K before the market topped at $69K. This was a partial exit and incorporated various favorable elements. The remainder of my portfolio was sold once I discerned the top was in, and another bounce was unlikely.
Many dead cat bounces followed, which gave way to lower lows. This is classic bear market behavior. The point is that I was watchful and decided to capitalize on profitable positions. With the affirmation of hindsight, this was an imperative decision regarding surviving the bear market that followed. You have to plan and be watchful.
Drawing lines in the sand is essential for any financial market participation. Emotions have to be kept in check. Discipline is the name of the game, and without any predefined decisions and strategies, emotions will rule. An emotional investor stands very little chance of getting anything right. They will always hold on for more or avoid selling out of fear. Disciplined investors have a game plan and make disciplined decisions regardless of emotion. This should always be your aim.
Very few investors can begin executing disciplined strategies from the start. Time and experience can produce effective and beneficial behavioral habits. Disciplined decisions become habits, and they are continuously executed according to pre-determined conditions.
One of the most effective ways to secure profits is to average out of the market. A thoughtful way to accomplish this outcome without selling assets is to utilize DeFi as an exit strategy. As counterintuitive as that might sound, it’s possible. Yield-bearing assets, including DeFi and Proof-of-Stake assets, make this possible.
Final Thoughts
Planning is crucial in a bull market. Thinking that you can sell at the peak is foolish. How will you know it is the peak? How will you discern the appropriate course of action if you have not pre-planned it? The truth is, those who fail to plan don’t sell. These are the bagholders that news agencies mock during a full-blown bear market. Don’t be that guy.
Positions that experience better-than-expected returns can also be used to scoop a little cream, simultaneously securing profits. This capital can also be used as a stablecoin DeFi position. This will lock in the value while simultaneously producing additional yield. The onset of a bear market will now have zero impact on the dollar value of this allocation.
However, the yield being generated will likely suffer a blow, but the principal allocation will remain untouched regarding its dollar valuation. Creativity and planning are essential. Please don’t put it off. Begin designing your escape before it’s too late! All the best, see you next time!
Sapphire Crypto 