In general, bull markets are the easiest time to make money. New participants are constantly flowing into the market, every dip gets instantly bought, and all news is good news. You can also expect new projects launching at crazy valuations that, at the moment, make sense. And best of all, bull markets feel like they’ll never end.
However, as the saying goes, it’s not how much you make – it’s how much you keep. Bull markets are notorious for lulling people into a fall sense of security that causes them to roundtrip their profits. When things are going good, it feels like they’ll never end – this can cost you more money than anything else.
This article will look at 3 different things you can do during bull markets to maximize your returns and protect your profits.
A great way to set yourself up for success in a bull market is by joining different crypto groups. Whether it’s joining discords or interacting with people on Twitter, finding people to talk crypto with will pay off in the long run.
Finding quality information (alpha) on crypto isn’t easy. If you rely on big news outlets for your Crypto news, you’re going to be behind the trends. While websites like CoinDesk, Forbes, Cointelegraph and others are popular for news, these websites don’t give any information on new trends and new projects that are currently emerging. You’ll never see these websites talking about a new project until it’s already listed on a Centralized exchange – by this point, the majority of your advantage is gone. In fact, when these outlets start posting about your investment, it’s usually a sign that it’s time to sell.
Participating in crypto groups is an excellent way to spot where the “hot ball of money” is going. There are always a few projects that capture the mindshare of regular crypto users – these are the projects that start slowly and gain massive amounts of momentum when the general public discovers these projects.
Try New Things
In crypto, trying new projects and protocols is one of the best ways to maximize your chances of making money. When investing in an old token, you’re also aligning yourself with old bagholders and old narratives that impede the growth of the token. Old tokens also have larger market capitalizations than newer tokens, which limits how much appreciation you can expect from them.
Now, I’m not saying old tokens aren’t going to pump, just that new tokens are always going to pump harder. During a bull market, it’s worth your time to research upcoming protocols and projects that are slowly gaining traction. Investing in new projects gives you the chance to get in at a very low market capitalization.
Let’s go back to near the end of the bull run in August of 2021. At this time, AVAX was considered a new project, and you could buy AVAX tokens for between $10-$15 USD. By November 2021, AVAX was up over 600%.
Many people missed this run-up because they dismissed Avalanche as a new project that wasn’t worth their time. Instead, they wanted to stick with their “proven” investments that they already made money on.
Simply trying the AVAX blockchain would’ve made you money. Thousands of people got an airdrop of between $2000 – $3000 dollars just because they used the official Avalanche bridge to bridge funds over from the Ethereum blockchain. A lot of people also got airdropped NFTs like Chikn that were worth thousands of dollars.
Needless to say, not every project will end up being AVAX, but these are the types of returns you can expect when you invest early in a bull market. These are also the type of returns you get when you invest early in a protocol.
Now, to end this thought, let’s continue with the AVAX example. Right now, as you read this, many people are buying AVAX, hoping it will run up again from this $10 range back to over $100. And it might. But the fact of the matter is many new projects are launching within the next year or two that will outperform AVAX.
A token going up from a $50 million market cap to $500 million will make you more money than trying to hold AVAX from a $3.4 billion dollar market cap (current price) to $5 billion.
Keep in mind, it also takes less money to move assets with smaller market capitalizations. A token going from a $25 million market cap to a $50 million market cap requires less money (fewer new buyers) than a token going from $2 billion to $3 billion (needs more new buyers to move the price). Of course, investing in these smaller assets mean taking on more risk, but that’s where you get the most outsized returns in crypto.
What does trying new things look like?
- Bridging funds to new blockchains
- Downloading and trying new wallets (Core, Phantom, etc)
- Interacting with new protocols after verifying their safety
- Actively using projects you believe in
Study Trading Concepts
Trading is a skill you can use to learn how to read markets and make better decisions with your portfolio. Learning basic concepts such as risk management, market structure, support/resistance, and volatility will make it easier for you to hold on to more of your profits during a bull run.
What does it look like when a market is exhausted? What kind of news influences the market? Which assets move in sync? These are questions you’re better prepared to answer when you study trading concepts and keep up with developments in the markets that you’re trading.
There’s no formula that will help you find the perfect time to sell, but you’ll be better equipped to identify risky times in the market using the skills you develop from trading.
Getting familiar with trading concepts is one of your biggest weapons against bagholding your profits. During a bull market, it’s easy to think things will just keep going up no matter what. Learning technical analysis and trading concepts will help you look at the market from an unbiased perspective. Without trading skills, it’s easy to panic on every move that the markets make.
- CryptoCred YouTube
- Emperor BTC Telegram – Search for PDF’s
- Read books related to investing and trading