Bull Market Corrections – Fundamentally Different
Avoid The Fear
Bull markets are amazing! Prices rally to unimaginable levels. The average no-coiner thinks that when, we as Crypto investors, speak of enormous gains we are speaking of 100% or more. They are unable to perceive the levels we are referring to. In the last cycle, I called a few 30000% percent gainers, as well as a whopping 800000% in the form of Solana. Picking up Solana below $0.30 just after its ICO was my best move in 2020.
As I have mentioned, I believe this time around it might just be Taraxa. I called this one at $0.001, as well as scooped up my initial position at this level. If TARA goes on to reach a dollar, it will be 100000%. Yep, that’s one hundred thousand percent. This is the crazy world of micro-caps and that is why I pay little attention to blue chips. A modest allocation in a micro-cap project that performs well can easily outperform a large portfolio of blue chips.
The key to realizing enormous gains comes down to three key aspects.
- Early entry
- Ongoing Accumulation
- Staying the course
I have addressed the first two points on several occasions. However, the final point is equally important. You have to be in the market if it is to reward you. It’s critical not to get shaken out. One thing you have to remember, is that bull market corrections are heavy. Often brutally heavy! A typical bull market will experience a few significant corrections of 30% to 40%. This can be overwhelming, especially if it’s your first time.
You have to monitor the stage of the cycle, as well as its maturity. As the bull market matures, the risk of being left holding your bags increases. However, there will be serious corrections on the way to the new all-time high. In 2021, I stepped out of the market with almost half of my portfolio when BTC hit $65K for the first time. Although many months followed, 65K was fairly close to the all-time high at $69K.
It was a disciplined and calculated decision that played out well. What I am trying to say is that arriving at a cycle peak doesn’t unfold without multiple corrections and serious corrections at that. It’s important to keep track of these corrections, as well as the timeframe of the cycle. Is there still time, historically speaking? Generally speaking, from the bottom of the bear market to the cycle peak is historically, on average, a thousand days.
To realize significant gains you are going to have to survive a few heavy corrections. This is an unavoidable reality of a bull market. Nothing goes up in a straight line. Investors have to prepare themselves mentally and emotionally. You can just imagine the pain of watching your portfolio shed 35%. This is especially difficult because, at this stage of the game, the dollar valuation has risen quite significantly. Many investors will jump ship prematurely.
It really is a difficult decision, regardless of how many times you have done this. In my case, I have decided to scrape 5% after monster moves. However, I am only likely to initiate this ongoing process in the final stages of 2024. Essentially, I will begin rebalancing profits into trading accounts, as well as cash accounts. This is to ensure survival for the next bear market. It’s important to not be premature, but also not to miss the bus completely. A process of very modest and ongoing harvesting makes a lot of sense to me.
This is especially true, regarding what I am looking to achieve in this bull market. Laser focus and isolation will be an imperative aspect of the journey to the top. Remember, you are journeying to a mountaintop. It’s a difficult and challenging path. Yes, the gains are amazing. However, I saw how many investors became hypnotized by the gains… and before they knew it were back at the base of the mountain, and they never cashed out.
Final Thoughts
Get these key factors wrong, and a bull market can very quickly become a wasted endeavor. Focus, discipline, and immersion are critical. It would be best if you were in sync with the market, and this is usually accomplished by complete immersion. Even at this stage of the game, I am heavily engaged. Unless the Binance situation becomes increasingly worse, nothing changes. Anyway, all the best for the journey ahead… don’t get shaken out, and don’t miss the bus! See you next time!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
