In the last 6 months, the crypto market has been heading south, with minor upside bumps here and there. In that time, there are people who have lost more than 60% of their portfolio values, while HODLing. There are also people who have made thousands, and even millions of dollars actively trading crypto. Someone who short Bitcoin in January has made more than 100% on their money, and if they had leveraged their trade, then it’s many times more.
That’s why if you are HODLing, maybe it’s time to rethink your strategy, and learn new tricks for thriving in the markets. It may be hard work, but it’s definitely way better than losing money on a daily basis, by betting all your money on hope, hope that at some point the market will rebound.
You are probably thinking, but the market will rebound, and prices will rise again at some point in the future. That is true, the bull market will return, but it might take some time. Once the bear run comes to an end, the market will likely enter into a multi-month consolidation phase. This is a phase in which, prices bounce up and down in a tight range, denying HODLERs a chance to profit. In short, by simply buying and holding, you are betting on the very long-term, while missing out on the chance to make a decent profit in between.
On top of that, the dynamics of the crypto market completely changed with the entry of the Bitcoin futures. While many people were excited that the futures market would lead to a push higher above $20k, it actually brought in the opposite. That’s because the futures brought in massive liquidity that was hitherto not available in crypto. The cash settled nature of the futures markets means that the volatility that characterized bitcoin in 2017 is no longer there, which makes things a little complicated for the buy and hold strategy. On top of that, the altcoin market is so much correlated to the price of bitcoin, which means that altcoins too will continue to trade in a similar manner to bitcoin, in that when it drops, most of them drop too.
The best thing about adopting a more active approach to crypto trading is that this strategy works quite well in this market, and with a good degree of accuracy. You just need to know what you are doing, and you could make good money day trading cryptos. Besides, there are more tools today, which can help you increase your potential earnings in this market. For instance, more platforms now allow you to short cryptos, and with a healthy degree of leverage. That’s a pointer that the market is increasingly becoming mature, and more favorable for traders.
Don’t live in denial, learn and earn. With dedication, you can learn the rules pretty fast, and make some good money in the process. Lambo dreams are still valid for those who put in the work!