A bull run in the crypto market is one of the most awaited moments for an investor. All prices are constantly rising, everyone is confident with their investments, and there’s demand everywhere for most assets. Depending on the market’s condition, this can go on for a few months or even years. Several factors define the crypto bull run, such as the unemployment rate or the economy’s state. What’s sure is that everything goes smoothly, and crypto transactions are peaking.
During a bull run, you can buy Ethereum with credit card and expect the returns to be considerable, which will later help balance your credit. Even selling is more accessible, facilitating the exchange between buyers and sellers. However, things don’t always go so well, especially for those who have never been through a bull market, therefore not knowing how to leverage their advantages. So, if you’re one of them, here’s how to get prepared.
Learn to expect bull moments
Considering that Bitcoin is the leading cryptocurrency on the market and halving events happen every four years, you should expect bullish movements after the event. The halving was created to cut the reward for Bitcoin mining transactions in half to slow down the supply, impacting the market. The next halving is about to happen in 2024 when the reward will reach 3.125 BTC per block. As the supply decreases, the demand is expected to increase, especially since Bitcoin has a limited coin supply of 21 million BTC that’s slowly reaching an end.
Besides closely watching Bitcoin’s course, you should look around and analyze the economy’s state. Are prices of certain assets increasing? Or is there a strong demand for certain products despite less supply? This means the economy is flourishing, with the unemployment rate decreasing and more investors ready to take over the crypto market.
Modify your portfolio accordingly
When the bull market is about to burst the market bubble, you don’t just sit and wait for the assets to get better but are actively seeking ways to improve your investments. You must diversify your portfolio correctly during this period to manage risk better and avoid investing in useless cryptocurrencies and assets. Most of the time, the average user is interested in Bitcoin and Ethereum, which already make up almost 80% of the investment portfolio. But you don’t have to limit yourself, so the remaining 20% should go to smaller crypto projects that speak out to you the most.
But before assessing new choices for the portfolio to be ready for the bull run, consider your risk prevalence because a beginner will be more exposed to losing their winnings than a professional whose portfolio base lasted for years. Hence, take your time to research promising altcoins and try not to get too fearful of missing out on better values.
Approach a suitable strategy
While you may be the type who invests based on feelings and vibes, sometimes it’s best to stick to mathematical and logical methods, even if they’re complex to approach. These fixed methods will ensure you a certain level of safety and money, helping you mitigate the risks of the bull market. For instance, most investors choose to use the dollar-cost averaging strategy, which allows investors to make smaller investments during a longer time frame, contributing to more considerable holdings and lower risks during dips. Weekly and monthly recurring purchases are the most recommended, but daily ones are also doable.
The amount of investment you’ll make should be set in accordance with the market’s volatility, which may not be that severe during the bull market, but that doesn’t mean it’s not present anymore. At the same time, consider your monthly budget and commitment to create the perfect strategy.
Watch the market
Unfortunately, sometimes you just can’t forecast when the bull run will end and how much it will take until the trend turns into a bearish period. Therefore, it would be advised always to watch the news and be prepared with an exit strategy if things go wrong. For instance, during the FTX collapse, most investors weren’t aware of the situation’s gravity, leading to millions of dollars’ worth in crypto being lost in a few days. Hence, if you use certain crypto providers for your investments, make sure you’re up to date with the latest news about them.
At the same time, engaging and communicating with other crypto investors will help you get more anchored in investing, getting more advice and help towards the safest investing way. However, your implication level will be based on your expectations, so ensure they’re as realistic as possible.
Don’t be the victim of FOMO
FOMO (fear of missing out) is more prone during a bearish market, since investors are selling their assets from fearing they’ll lose value rapidly. This rush affects not only their portfolio but also their confidence levels, so they won’t be able to make the right decision during a stressful period in crypto. However, FOMO can also be present during bull markets because you want to leverage every opportunity that arises, so you may find yourself buying assets at higher prices, which will increase the loss risk if the market suddenly turns into bear mode.
There are four phases of the bull market. First, it starts with expansion, then continues with a peak, the best buying moment. The market will then contract and end up with through, a stage when prices go down. Sometimes, the late stage will be followed by a rise in prices and development, but this is not always the case, so the risks are enormous.
Final considerations
In crypto, the bull market brings plenty of benefits for investors, with increasing prices, low unemployment rates and high liquidity. However, not everyone is prepared to make the most out of this period, therefore losing the opportunity to gain more assets. So, if you want to leverage the bull market period properly, do your homework and learn more about used crypto providers, diversify your portfolio accordingly, and choose a strategy that lowers risks.