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Preparing for the next Bull market – crypto investment strategies

crypto investment strategies

Picking the most suitable cryptocurrencies for your portfolio and employing the right strategies is quite complicated for beginner investors. In the present context, knowing if a coin’s price will peak or bottom, in the long run, is challenging. Crypto traders chew their fingernails down to nubs trying to predict what will happen in the market. Often, selling or buying too soon can have a negative impact on one’s portfolio. And things get even more complicated when the market enters a bull run. 

Experts use the term bull market to define a period of sustained, widespread gains of over 20%. They recommend young investors who are checking Bitcoin or Ethereum price  to stick to principles instead of trying to make predictions about individual digital assets.

Here is a list of strategies to help investors profit in a crypto bull market. 

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Stay away from novel coins and turn your attention to quality ones

In the bull market, all coins register a value boost as the whole market starts gaining value. Don’t let the upward trend trick you into thinking that the latest coins introduced on the market, with no real utility, will survive a bear market or maintain their value in the long run. 

As the bull market matures, only reliable performers will maintain their prices and even grow in value. Therefore, investors should make realistic business plans based on strategies that suit their portfolios. And it’s crucial to populate these portfolios with quality digital assets like Ethereum and Bitcoin, which have shown that they can keep their value and utility even in challenging times. 

However, if you employ short-term strategies, you can definitely make money with novel tokens, which gain value in their early phases. However, it’s recommended to diversify your portfolio and shift to reliable coins as the market matures. 

Look for bargains

When the market turns bullish, many tokens and coins will be traded at lower rates as they’re undervalued. It’s recommended to look for bargains at the first signs that the market is bouncing back and focus on small-cap cryptos that entered the sector recently but have utility cases and a strong community. Crypto experts state that coins sold at lower prices at the beginning of the bull phase could register dramatic growth in a favorable environment. 

Diversify your investment

Seasoned crypto investors are known for their strong opinions. One thing they all agree upon is the importance of adding as diverse cryptocurrencies as possible to a portfolio, especially during bull markets, to boost the profit chances. Additionally, diversified portfolios minimize the risk of losing finances because they enable traders to benefit from market growth in different areas. 

In the crypto sector, diversifying one’s portfolios implies adding big-cap digital assets, new coins, tokens that are used in the Metaverse, and other commodities associated with innovative technology. The bull market is characterized by conditions that favor crypto growth; however, no one can really predict which direction the sector will turn. 

Invest in projects with promising technology

Only a couple of cryptocurrencies are presented as general-purpose replacements for traditional cash. The majority of digital tokens are introduced as solutions for specific purposes like NFT management, decentralized finance, and other similar ones. Crypto developers usually incorporate advanced technology into their projects to overcome the limitations of the traditional financial sector. Crypto specialists recommend adding to your portfolio only custom-built tokens that address a market issue and have utility, as they have the greatest shots to trigger big gains in a bull market.  

Find crypto projects with growth potential

As an investor, you must learn to perform fundamental analysis to predict a cryptocurrency’s future evolution based on its past performance. When you research the market, you’ll notice that some coins have a history of appreciating in value when the market turns bullish. You should add those that appreciate more points than the market average to your portfolio because they’re more likely to drive a profit. 

You should expect the market dynamic to stay consistent for a while when the market enters the bull run and the cryptocurrencies to outperform the market in the long run. Before investing your funds, do your homework and find the digital assets that could deliver the best ROI. 

Invest in stages

Yes, the market might be on the path to recovery, but that doesn’t mean you should put all your savings into digital currencies. The best way to minimize the risk associated with trading cryptocurrencies is to invest gradually. Even if you’re a seasoned investor, approach the market gradually and enter it bit by bit. Test the waters with some well-known projects like Ethereum and Bitcoin, and if you’re satisfied with the outcome, you can approach other projects. Suppose the prices fall drastically over the night; your savings are safe. 

Develop an exit strategy

The bull market tends to entice young investors to stay more on the market, hoping to earn higher profits. And they ignore one signal that the market might turn downwards and then one more until the market correction impacts the cryptocurrency’s value and causes their portfolio to break. That’s why it’s recommended to plan the exit strategy in advance, so you can protect your finances. Establish when you leave the market, regardless of its movements or evolution, and stick to your decision. Yes, you might miss gaining some profit, but you also guard your savings in the long run. 

Establish what your personal goals are

Every investor should establish what goals they have before adding new assets to a portfolio. Do you trade cryptocurrencies because you need extra cash for a vacation? Do you want to save up to send your kid to college one day? Depending on your goals, you’ll adapt your trading strategies and decide whether you prefer high-risk or stable assets. 

Keep in mind; crypto growth is no sure thing, even in a bull market, so trade cautiously!

What do you think?

Written by Joshua White

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