7 Major Concerns to Keep in Mind During a Crypto Bull Run
A crypto bull run can mean significant gains for your portfolio, but you must also watch out for these pitfalls
A friend of mine got overconfident during a bull run. Bitcoin has always been in his portfolio. But he started buying into a wide variety of rising altcoins without researching. Then, two months later, the market turned bearish. Some projects disappeared utterly, and while some remained, it almost completely wiped out his portfolio. So, he learned the hard way that you can’t get too greedy during a bull run.
If you want to make the most of a cryptocurrency bull run, you need to do your research and remain careful at all times.
In this article, I focus on the seven biggest concerns facing you today.
#1: Keep up with financial news for any insights into what might happen next in the crypto market
Digital assets are volatile and unpredictable, so you must stay informed about developments in the space. Additionally, it would be best to look at other financial news for insights into what might happen next.
Remember, buying, selling, and trading is different from Bitcoin mining. Instead of computing power, you need brainpower.
Start reading all kinds of news and stay informed so that you can make critical decisions about your cryptocurrency investments using reliable data. Also, it would help if you considered bookmarking or subscribing to the following resources:
#2: Re-allocation is an excellent way to keep your portfolio in line with your goals during a bull or bear market
Unlike a bear market, a bull market is when digital assets go up. However, it would help if you did a portfolio re-allocation every 3 to 6 months when trading, no matter which way the market goes. When you do, you move your money around in your account to be more like the kind of investment you want. See my article here.
The market has been on an upward trend for the last year, but that doesn’t mean you should be putting all of your eggs in one basket. Re-allocating at least once or twice per year can help you maintain balance and reduce volatility.
For example: if you currently have 50% of your portfolio in Bitcoin and 50% in Ethereum, but after a year, the market is up 25%, you will sell off some of your crypto and put that money into fiat or another coin to maintain the 50/50 split or do a new one.
#3: Be careful of investing in too many new tokens or projects during a bull market
Missing out on the next big thing can tempt you to invest in every new project that emerges. But this can lead to over-investing and not enough research into each token.
Be careful about investing too heavily when markets are bullish, especially if you don’t have much experience with cryptocurrency price action. Instead, develop a strategy before you do any trading so you know what projects are worth your time and investment! I did an example of crypto research here.
#4: Make sure you’re not over-extending yourself financially to participate in the bull run
The last thing you want is to over-extend yourself just for the sake of getting in on a hot trend. Instead, make sure you’re only investing what you can afford to lose and that you have a solid plan for when the market inevitably turns bearish again.
Steady and slow investors rise while risky traders fall.
#5: Look out for crypto scams, and rug pulls, especially during a bull run
You don’t have to go all-in with trading because everyone else is doing it. Instead, you must harness the proper process and tools that point to the correct data. Then, you can get a bigger view of the cryptocurrency markets and now when to buy or sell.
Be vigilant about scammers who may take advantage of your enthusiasm in this market. Also, be aware that prices can change quickly, so don’t get too attached to one investment. You can safely trade in the cryptocurrency market by being cautious and informed.
#6: Don’t forget that the crypto markets are subject to sudden, dramatic changes
It’s hard enough trying to find the best investments for your portfolio without having the added worry of whether or not those investments will be worth anything tomorrow.
Don’t invest in the promise of a moonshot. The best type of investment is one that will grow with the market, allowing you to keep your head above water when there are dips. If you are hesitant to invest because of recent changes, look at the top cryptocurrencies by market capitalization over at CoinMarketCap.
#7: Finally, remember that a bull market is not an excuse to become complacent with your crypto portfolio
It’s easy to think you don’t need to worry about anything else because the markets are up. But this can be a dangerous mindset and lead you to make mistakes like selling too early or buying at the wrong time.
The best way to protect yourself from these pitfalls is by diversifying your portfolio and sticking with it for the long haul.
Beware of FOMO and FUD.
This article showed that cryptocurrencies and digital asset markets have high volatility, so it’s essential to research before making any decisions. Then, diversify your portfolio with investments, so they grow no matter what happens in the future and stay informed about changes in the market.
Don’t forget crypto markets are highly volatile and are subject to sudden, dramatic changes. Stay vigilant about scams in the market, but don’t let them scare you away from investing entirely. If the markets are too wild for your liking, remember, the demand for Bitcoin always makes it a store of value.
Finally, remember that a bull market is not an excuse to become complacent with your crypto. Instead, diversify your investments and stick with them for the long haul.
A rising tide lifts all boats.