You must do your own research and not blindly follow the opinions of others.
Author: Altcoin Sherpa
Compiled by: TechFlow
I originally planned to write this as a long Twitter thread, but ultimately decided to organize it into an article to see if this format works better.
The Next Few Weeks:
(Here are some random thoughts in no particular order)
Your spot holdings may face significant drawdowns, whether to hedge the risk is entirely up to you. This period may be very painful.
If you can hold on (hodl, the act of long-term holding of crypto assets) through this painful period, I believe the next wave of uptrend will be very favorable for some key coins, potentially even erasing the previous drawdowns.
The market has not "ended", and I expect a new uptrend phase within the next 4-8 weeks. Reasons include high Bitcoin dominance (btc.d), seasonality, potential rise in Ethereum/Bitcoin (ethbtc), and market capital rotation. Additionally, a relatively positive government attitude towards cryptocurrencies and fewer macroeconomic headwinds create a favorable environment in theory.
In the next wave of uptrend, you need to gradually become a complete seller. If you choose to continue holding during the trough, I can understand, but your upcoming selling plan should gradually shift towards safer assets.
Safer assets include Bitcoin (BTC) and stablecoins.
As the market cycle progresses, you need to gradually reduce risk, scale down your positions, and exit the market gradually through Dollar Cost Averaging (DCA) instead of a one-time liquidation.
I don't have a clear prediction about the upcoming market rotation. From now on, I think the market will mainly belong to traders, not long-term holders (hodlers). That is, some coins may attract a lot of buying pressure, while others may rise slowly (e.g., XRP vs. TIA performance).
It's difficult to predict in advance which coins or sectors will become market leaders. From a rotation perspective, it seems that all coins will rise, but there is no overall uptrend. What I mean is: ordinary AI coins will eventually see a big rally, but it may only be reflected in 1-2 coins (e.g., the rally in TAO may be very exaggerated, while AKT may only rise by 50%).
Don't hold on to your coins just to achieve unrealistic target prices. Many coins may not reach their all-time highs (ATHs) again. Of course, some mainstream coins may reach them, but a bull market does not mean that all coins will return to ATH levels. Although anything is possible, I believe 80% of the coins (or even more) will find it difficult to achieve this. It is wise to follow the market trend and take profits in a timely manner.
If your portfolio is highly diversified, I suggest selling 50-75% or more of your holdings when the next wave of uptrend ends and the rotation is over. For example, when the AI sector is rallying, if you hold FET, you can choose to sell; or if you hold RWA (real-world asset tokenization) coins, you can take profits when ONDO performs well.
In the recent rally, I have sold many coins that I have low confidence in; I will later reallocate the funds to other higher-quality coins.
In the coming period, you should try to consolidate your investments, reduce the number of new positions opened, and lower the overall diversity of your holdings.
I'm not sure when the next major drawdown similar to the summer of 2024 will come. I estimate it may still be 3-6 months away, and the market may become very bad and experience another round of drawdown. As for whether this drawdown will be driven more by time factors rather than price factors, as in 2022, I cannot judge yet.
This summer, Altcoins experienced a 75% major drawdown, which was mainly driven by a capitulation in prices, rather than prolonged time-based volatility. Although those 6 months felt endless to us, compared to the 1.5-year sideways period for Altcoins in 2018-2019 and 2022-2023, this adjustment has actually been relatively fast.
The market may enter a so-called "supercycle," as some have said, "this time is different." But I remain cautious about this, so I will still choose to act prudently.
My ideal goal is to keep the drawdown from the all-time high (ATH) of my investment portfolio around 30%. I understand my risk tolerance, and I can accept a maximum drawdown of 50%, but 30-40% would be the more ideal range.
Your task is to continuously analyze the data weekly and constantly re-evaluate the top and end points of the market cycle. When the market starts to turn, things can get very complicated. Even when the bull market ends, many will still be shouting "the bull market is still on." This situation is always difficult to predict, but you need to stay alert. Don't try to predict the distant future, accept market information and adjust your strategy accordingly.
Finally, be sure to do your own research (DYOR) and don't blindly listen to the opinions of others, analyze and operate your investment portfolio independently. Everyone's trading strategy is different, don't rely entirely on the exit strategy of the KOLs you like. Some may do very well, but most are likely to suffer significant losses. If you can exit the market with considerable profits, you are already a winner. Good luck!
