Unless you are an insider trader or a whale moving the market, I would say it is unwise to focus and hunt short term gains when it comes to the crypto market. By taking a peek at how crypto has performed during extraordinary times can be illuminating. How, for instance, have our favorite crypto assets hold on and even improved during the first quarter of the year, which started optimistically and ended with uncertainty and hard falls generated by the war in Iran and AI risks. The entire macro economics changed and the financial and crypto ecosystem are shook by that. Yesterday I was yielding from my investments, next day I am losing. And in such conditions only the powerful survive. But maybe there are some recipes to weather such times and keep ourselves above the water until the storm passes. So let's see..
In such bearish and volatile market conditions, solid projects separate survivors from hype driven projects. My goal is to pick assets that already confirmed in the previous bull run, or step into new ones which are moving differently that the overall market. But nevertheless I try not to hype like in the past and simply focus on a handful assets.
Through three crypto cycles, I ended up understanding that volatility is part of the crypto market and that emotional reactions often lead to poor decisions. My behavior is to stay patient and stick to a strategy in order to avoid locking in unnecessary losses. My horizon is long term aiming the next bull cycle, so I would say somewhere around two years.
One thing that I did before the last bull cycle and that worked for me was DCA which allowed me to build positions without trying to time the bottom. It turned market dips into opportunities rather than sources of fear. Not crazy gains, but X2 was an average due to some loses as well.
My overall strategy includes generating yield in order to offset market downturns and keep the portfolio growing. Reinvesting the returns compounded long-term positions without adding new capital. This helped me invest less and not elevate the risk.
In such bearish markets and like I did before, I try to less time the market which is very difficult and rather focus on discipline and consistency. These paid off in the end and I hope that I will get well positioned when the tide eventually turns. Learning from past experiences that's all we can do and I am trying to replay and improve the success from the previous bull cycle.
