If you have been into Crypto , you are accustomed to the heart-breaking market crashes which happen from time to time. It hurts to see your portfolio down by 80% right? And it hurts even more when you realize that you are 100% invested in alt coins with all your funds and there is pretty much no reserve fund left to buy the dips.
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If you are a long term holder, none of these market falls should be bothering you, but what if you are someone who is looking at Crypto as a part time income source like I do. Let's get straight to the point and figure out ways to play it smart.
Usdt/Busd should be your supporting friend: Yes, befriend stable coins as they could be the supporting hands in a market fall. Make sure at least 40% of your portfolio is in stable coins, so that you could buy the dips when it goes crazy out there. This also avoids your portfolio from shrinking into small numbers if the market falls.
Dollar Cost Averaging(DCA): It you would follow my previous point you would have enough funds to buy coins in a fallen market. Instead of waiting for the right time to get the coins at the cheapest prices buy them in parts, i.e if you have $1000 in Usdt/busd buy some coins for $250 usdt instead of spending the entire $1000. This saves you from further crashes , as we have seen sometimes the market dips never end as they keep falling when you buy the dip. So if it crashes further you can buy a little more or wait to get better entries. And in case if it recovers quickly you wouldn't look like a complete idiot as you have accumulated some coins for $250. But usually after sudden flash crashes market wouldn't do a U-turn recovery and it takes time, so keep doing DCA when it keeps dropping. No matter what don't spend your entire funds in dip buying always keep some reserve funds.
20% of your portfolio should be in Btc and Eth: IMO these are the safest Crypto currencies , as they are the top 2 coins in market cap and have survived many market cycles. These 2 won't fall like 80% or 60% like alt coins, and even if they do they would be quick to recover . Many alt coins on the other hand mind not even survive a bear market no matter how famous / reputed they are (those who were in market during the 2017 crash would be able to relate to this ).
Book your profits : Another rookie mistake made by many is to not book profits . Always remember that your profits are not real unless they are realized by booking profits . Yes you might be against converting profit into Fiat, but unless crypto becomes 100% mainstream you need to cash out some profits from time to time. Also don't reinvest your booked profit during a market crash as this could get you rekt if you are buying in a crash which leads to a bear market .
Avoid signal groups and trading calls: Avoid paid or free trading signal groups and call givers at any cost. Because not only would you be over dependent on them , they won't be able to alert you before a market crash no matter how good they are. Of course they might help you make some quick buck once in a while, but being depended on them you will learn little to nothing .
Identify market trends / patterns: This is a small tip from my personal observation. There are always trends in market like De-fi, nfts, web 3.0, metaverse etc. If you have seen certain category coins are pumping at the same time you could identify ongoing flow of money into certain categories. Keep observing the market to identify ongoing trends as trending coins are likely to pump and recover quicker even after a market crash.
So these were some points i wanted to throw out here to help fellow crypto enthusiasts to avoid getting rekt in market crashes or looking clueless wondering how you ended up in huge losses. Try my points and see yourself taking less damage in the upcoming crashes ✌️.
