59
views

Best Cryptocurrency Trading Strategies for A Bull Market

Crypto trading is as huge a hotcake as any other hot stock. Players from the average Joe to the richest individuals and institutions are clamoring for a piece of the action. The massive attention of late paints a very different picture than the nascent 2009 launch of Bitcoin, the first cryptocurrency.

It has switched from a geek’s part-time occupation to an all-around credible investment, attracting investors in droves. As people venture into crypto trading, terms like bull and bear markets pop up. One may wonder just what trading strategies to utilize, more so during a bull market. That’s where this article comes in handy.

Understanding Crypto Bull Market

Before one can even dive straight into the strategies to use, it is wise to get to terms with a crypto bull market. Crypto trading isn’t exactly like normal bourse trade. Like any other bull market, a crypto bull market is a period in trade characterized by strong price gains. The gains are expected to be 20% price increments or more from trough to peak.

The opposite of this is termed a bear market. The bull market period may be punctuated by slight price dips but without the effect of halting the overall price trajectory. However, the market situation’s causes differ from those of a normal stock exchange by quite a bit.

Depending on the cause, the price gains may be long and sustained or predicted to be a little shorter by market analysts. This plays a key role in determining what strategies to follow.

Strategies for a Long Bull Run Prediction

Market analysts have the role of making predictions on market movements with better accuracy than the average person. While all bull markets generally call for buying the dip and going for a crypto Hodl, the bull run’s predicted length may influence the specific strategy.

To hodl is basically to keep holding onto your crypto assets. A prediction of a long bull market run is usually based on strong incentives for continued price gains in the market. Causes could be major blockchain overhauls, sustained huge interests by large investors, and blockchain-specific events like the Bitcoin halving.

Below are some of the recommended strategies to follow in the event of a long-drawn-out bull market prediction.

Implementing a Systematic Investment Plan

A Systematic Investment Plan (SIP) is a widespread wise investment strategy associated with Bull markets. It involves making periodic investments of similar sums into the crypto asset of choice. This strategy helps avoid various common investment pitfalls associated with bull market investments. The first is a potential late entrance.

Pumping small predefined fixed amounts will mitigate a potentially huge loss if the bull market has already run its course and suddenly swings to a bear one. The second is a hodling for too long. Some investors may hodl for too extended a period that all their gains get wiped out.

Sticking to One’s Financial Plan

A wise investor always has a financial plan stipulating the allocation of scarce financial resources. The prediction of a long bull market is a delicious temptation to go all-in, but it may not be a sound idea.

While market analysts are usually right, they many times make predictions that fall short of reality. It is never good to see one’s investments lose value fast, especially if they are the bulk of one’s financial assets.

Keep Tabs with The Whales in The Market

A whale trader is either an Ultra-High Net Worth Individual (UHNWI) or a large institutional investor in a cryptocurrency. They are characterized by the huge liquidity they hold in the crypto they invest in. Whales move huge investment sums and influence market conditions by their actions.

Such players’ reactions regarding an ongoing bull run should be of key not to any investor. It is a wise strategy to always react to market conditions similar to the whales, for they may spell a continued bull market or its end. If they invest more or hodl, it is safe to continue with one’s investments. If they start making exits, it’s time to sell one’s cryptos.

Strategies for a Shorter Bull Run Prediction

A shorter bull may be because of various reasons that undermine the price gains’ strength and sustainability. The more common ones include a slight system upgrade by the parent blockchain during a bear market and an incentivized asset swap with a time frame. Trading strategies for such bull markets include;

Always Making Periodic Profit Withdrawals

A shorter bull market prediction tends to have more unpredictable conditions. It may suddenly swing to bear even before the predicted lasting period.

It is wise for investors always to make periodic profit withdrawals when trading here. The crypto’s price may suddenly swing down, wiping out one’s gains. Making periodic withdrawals leaves one with some gains.

Hedging Risks Using Crypto Derivatives

Due to the higher risk of shorter bull markets, utilizing crypto derivatives to hedge risks is wise. It is, however, advisable to always hedge risks, even with longer predicted bull runs. The process may reduce one’s profits since it acts as insurance against sudden loss from price dips. The step, however, serves to lessen the severity of losses when the dips do occur.

Since the predictions of a shorter bull run are based on higher possibilities of market dips, hedging risks is a perfect strategy here. But as stated earlier, it is wise to always hedge risks in all market situations. One may reduce the number of derivatives when the bull market is predictably strong and long.

Always Following Market Reactions

In such bull market conditions, it always pays to be vigilant and follow market trends. A weaker bull run leaves the market jittery, raising the possibility of a premature end in the price gains.

The saying to follow here is “the crowd is always right.” If the market starts dumping its holdings, it is wise to do so since such actions trigger price dips and gloomy cryptocurrency analysis.

Conclusion

Cryptos have proven to be a very sound investment venture and are here to stay. Knowing how to trade in them and eat one’s slice of the pie is a wise decision for any potential investor out there. Trading during a bull market when prices are making strong gains may not be as easy as it sounds.

Bitcoin live price
Btc
Bitcoin
$36.300
price
7.13967%
price change
BUY NOW

The predicted length strongly influences the right strategy, hence the strength of the bull run. While all these strategies are tinkered to fit the prevailing conditions, the overlying formula is buying the dip and hodling. All the while, careful analysis of market trends is necessary.

Stay up to date with our latest articles

More posts

What Is CBDC In Crypto?

The cryptocurrency trading revolution exploded more than ten years ago and led to an almost unprecedented economic and financial earthquake. As a result, people are learning to change their approach to payment and investment systems, pushing up the price of many cryptocurrencies. Such a rapid change has not gone unnoticed on the boards of the world's major central banks. In fact, in an increasing number of countries, central banks are working on launching centralized digital currencies, known as CBDC. This…

How Social Leaders on Shrimpy help Investors Maximize Profits from Crypto Trading

The emerging trend of social trading allows millions of investors to interact with their peers and learn from accomplished traders in the crypto market. Every market participant wants to become a profitable crypto trader and maximize earnings from the ongoing crypto boom. Unfortunately, navigating the highly volatile space while grasping the complex learning curve that involves fundamental/technical analysis can be rather daunting. Becoming successful in the crypto market requires time to develop a working strategy that empowers investors to execute…

Decentralized Exchanges 2022: Which is the Best Crypto DEX to Trade on?

Market experts believe that the survival and growth of crypto largely depend on decentralization. The good news is that decentralized exchanges or DEXs have become highly popular, and the crypto market sees this as an opportunity to save the essence of traditional blockchain. Each decentralized exchange platform has the potential to revive and thrive crypto market. Moreover, each new DEX platform comes with its own set of features. There are several methods to use DEXs and make money.  Decentralized exchange…

Top Crypto Exchanges for Beginners in 2022

Investing in crypto is not as complex as most people think. So if you’re curious and optimistic about the rise of crypto, there is no reason to hold back and dive into it. Remember, it is normal for beginner investors to get caught in the cobweb of endless crypto exchanges. As a beginner investor, your objective should focus on the best crypto exchanges to make the right investment decisions. Whether it’s Bitcoin or Ethereum, cryptocurrencies continue to be at the…

Top 10 Cryptocurrencies in January 2022

Cryptocurrencies had a great year in 2021. In this period, we have seen the market go from being classified as a billion-dollar economy into a trillion-dollar economy. Aside from that, cryptocurrencies are gaining visibility in the mainstream world with, for example, El Salvador's adoption of Bitcoin as the official digital currency. As a result, investors are looking for the "new Bitcoin" on the market, hoping to find a great alternative in so-called altcoins. Unfortunately, many traders value an altcoin exclusively…

The Story Of Bitcoin And Ethereum’s Reversed Blockchains

Decentralization is the primary selling point of the three worlds of Bitcoin, crypto, and the web. There are several reasons for this. Some are related to the increased transactional efficiency that decentralization can provide. Others are related to creating permissionless, censorship-resistant digital networks. The most important is that decentralization weakens any single-point-of-failure, hence bolstering network security. This not only keeps a network as close to unbiased and ‘neutral’ as possible but almost guarantees its immutability. Yet the crypto world hasn’t…

What Are the Best Crypto Prediction Sites?

There are now several websites that provide, besides crypto live prices, some forecasts on the future of the leading cryptocurrencies. However, considering the market’s high volatility and the few analysis tools available to the public for formulating these forecasts, it must monitor these portals carefully. This article will report some of the primary sources of price forecasts in the crypto industry. However, we remind you that the information contained in the text does not constitute financial advice, and we invite…

Why Do the Cryptocurrency Prices Go Down on the Weekends?

If you have been in the crypto world for a while, you will probably have noticed a typical behaviour of the market during weekends. With some exceptions, we are used to seeing the price of significant cryptocurrencies drop over the weekend. The phenomenon is known to those who operate in this market, but understanding precisely the causes seems to be rather complex. Therefore, this article will discuss a definitive answer by analyzing the various main factors involved in this market…

How to Track and Stay Updated with Cryptocurrency News

Cryptocurrency is a young market and, as such, very fast-moving. If we exclude the phenomenon of stablecoins, the prices of cryptocurrencies change continuously, with sometimes very high volatility. Since a volatile investment is, by definition, a risky operation, traders usually look for ways to reduce the possibility of incurring significant money losses. In this context, it is vital to stay up to date with market events, even if this can be complex. As seen in the past, a single tweet…

Keeping Consensus: Explaining Ethereum’s Difficulty Bomb

Ethereum’s difficulty bomb is a tool for maintaining network consensus between all classes of participants. This is a challenging task for Ethereum compared to Bitcoin, which performs frequent backwards-incompatible hard-forks. The most significant of these – Ethereum 2.0 – is yet to come. When it does, the difficulty bomb will be crucial in ensuring the community’s smooth transition to the new protocol. Review: Ethereum 2.0 and Proof Of Stake To understand the necessity of the bomb, we must review some…