Bull Market Survival Guide: Don’t Get Carried Away

As Bitcoin has broken through the historical highs of $69,000 and $70,000, it is safe to say that we are back in a bull market. Although it is uncertain how high Bitcoin will rise, and whether other altcoins such as Ethereum and even meme coins will continue to follow, through rational investment decisions, every ordinary person has the opportunity to create and accumulate wealth in a bull market.

This article will discuss some time-tested strategies to ensure you can take advantage of this bull market wave without being impulsive or overconfident.

Dollar-cost averaging (DCA) is one of the best strategies for accumulating assets in both traditional and crypto markets during bear markets.

The concept of DCA is to set up automated recurring purchases over a period of time, rather than “using up all the bullets” at once. This ensures that investors enter at a more average price, rather than being exposed to wild price swings and risking their entire capital at the same time.

On the other hand, the same strategy can be used in a bull market - repeatedly and automatically sell a certain amount of positions, which can be set weekly or monthly, or related to the profit target price you have in mind. For example, a few days ago, when Bitcoin first broke through $69,000, many investors sold Bitcoin, and then BTC retreated by nearly $10,000. There is no shame in taking profits; otherwise, the portfolio is just numbers on the screen, not actual gains. It is also important to make the decision to sell as soon as possible before the excitement brought by the bull market and emotional decisions overwhelm reason.

While it seems like everyone could get rich from meme coins, the reality is that it’s closer to gambling than investing, or more accurately, gambling. There’s a survivorship bias in these markets, with five or six meme coins covered by the mainstream media, making everyone think they can easily find the next dogecoin or dogwifhat.

In fact, tens of thousands of memecoins are created every day, and most never break $10,000 in market cap. Either they have been abandoned by early investors, turned out to be an elaborate scam, or never gained traction. While there is nothing wrong with this type of speculation, memecoins are purely a bet on community behavior and psychology, and other types of cryptocurrencies may not offer as high returns, but promise to be safer and longer-term investments.

As with memecoin trading, day trading (or T, "day trading", "same-day trading") and leveraged trading often result in large amounts of money being lost in an instant. It may seem like a good idea to buy $1,000 worth of Bitcoin for $50 using derivatives or perpetual exchanges when prices are rising, but when prices fall rapidly, you are left with a margin call. Using DeFi protocols to buy, hold, or earn interest is much safer than risking leverage. Attempting to do T is also a risky strategy and is generally not recommended unless you are very good at interpreting trend charts. This strategy is far from foolproof and has far more losers than winners.

In every cryptocurrency bull run, there are always a few projects that seem to convince everyone they are the next big thing. Then, when the next bull run comes, these projects are either dead or dying.

There are many examples from 2017 and 2021 that no one has heard of today, with tokens and protocols worth billions of dollars back then being sold to nobody today. The safest bets in the crypto space are Bitcoin and Ethereum, followed by other long-established currencies with real utility or interest.

Speculative utility games are those that are not currently attracting much developer attention or user interest, or are still under construction but show the potential to create a better system than the current market leaders. Even with these tokens, investors must remain cautious because good technology does not always win. For example, Ethereum is still the market leader in the smart contract and DeFi space, despite being very slow and extremely expensive to trade. In theory, alternative L1s like Avalanche , Fantom , Solana , etc. are easy to attract investors to bet on, but the development and activity of the ecosystem is arguably more important than pure technical achievements.

Finally, many DeFi protocols will offer high percentage yields, but the tokens they issue will also increase year-over-year. Unless you use a service like Beefy Finance to compound manually or automatically, this yield will ultimately be worthless, so it is important to profit as soon as possible.

Joining the bull market and riding it is an exciting experience. For those who have accumulated coins throughout the bear market, now is the time when patience and faith will be rewarded, but only if you have enough determination and dedication, and don't get too attached to a specific coin or think it will only go up. If Bitcoin continues to soar to hundreds of thousands of dollars, it can easily fall back to the current price (if not lower), and the profits will only be a string of numbers before they are cashed in. It may sound pessimistic, but this is indeed the safest way to ensure that the bull market is not wasted and achieve personal wealth accumulation.