It’s Friday afternoon and here’s a quick debrief of where we are in the crypto markets. Since my post on Wednesday, prices have gone down slightly in Bitcoin & Ethereum and also in altcoins.
From a big picture perspective we are in a full blown bull market and prices have gone up so much this year that mini dips in price are to be expected and completely normal for this stage of the cycle.
The BTC all-time high around $20k was a significant resistance zone and unsurprisingly we’ve bounced off this and are consolidating beneath which is normal for this type of price action.
In fact, if prices fall quite a bit from here (e.g. towards $14.5-16.5k), I see it is an ideal entry point to buy some more.
The crypto markets are all about timing. You don’t need to know exactly what’s happening and follow things closely at all (that’s what we’re here for!).
To maximise profits, understanding the big picture is the key. Getting in early, riding the trend to the end of the cycle and having the right balance of coins at the right stages. Market cycles reward being decisive at the right times and patient pays the rest of the time. Being able to switch between the two is one of the key skills of a successful trader & investor.
When is Alt season happening?
The short answer is nobody knows for sure but it’s on the horizon! There will come a point in the not so distant future that alt coins will start to rocket, this is affectionately known as an “Alt Season”.
This stage of the cycle typically happens when Bitcoin and Ethereum have reached significant highs (e.g. new all-time highs) in an established uptrend and are consolidating sideways and then it will be alt coins time to shine.
Right now I have roughly 35% Bitcoin, 40% Ethereum & 25% altcoins. However when alt season kicks off I will look to divest some BTC and ETH into alts and change up the value of my portfolio.
I then eventually expect to take any profits and put them back into BTC & ETH before exiting into £GBP when we near the end of the overall market cycle.
This whole cycle could take 1-2 years to play out, let’s see. This is what has worked in past cycles and I expect a version of it to happen again. Compounding gains at each stage can turbo charge your profits.
I’ll be keeping a close eye on the timing of the overall market cycle. As well as this, there are a lot of really promising innovative coins which are coming of age soon and we’ll be releasing our alt coin watchlist next week with target prices for entry and more.
If we take a look at the classic market cycle diagram (see image below), we are still early in this cycle and somewhere in the awareness phase.
What’s moving the markets?
Slowly, and then all at once. Large public companies are putting crypto (mainly BTC and to a lesser extent ETH) on their balance sheets as a hedge against inflation and global Governments printing money out of thin air. I expect more and more to join in as they fall like dominos in 2021.
Trading Proverb – “Buy the Dip in bull markets and sell the bounce in bear markets.”
As always, if you have any questions, thoughts or comments let me know on the Facebook Group.