How to Prepare for the Crypto Bull Run and Avoid Loss?

How to prepare for a bull market? How to seize growth opportunities, avoid false breakouts, remain poised amidst market frenzy, and secure profits when greed takes over? We’ve prepared a comprehensive guide to navigating the upcoming crypto bull run.

Global Bull Runs Typically Follow Bitcoin Halving

• The November 2012 halving reduced the reward from 50 BTC to 25 BTC, with Bitcoin trading at $12 per coin. Around that same time, a former Airbnb engineer launched Coinbase, one of the first cryptocurrency exchanges. The subsequent year, 2013, saw the initiation of the first bull run, driven mainly by speculative interest and the novelty of the new technology. By the end of that year, in November, BTC had astonishingly reached $1000, a previously unimaginable value. 

• The second Bitcoin halving occurred in 2016, with the price at $651. In 2017, the coin drew the attention of the CME Group, the world's largest derivatives exchange operator overseeing both the New York and Chicago stock exchanges. The market was abuzz with rumors of impending Bitcoin futures ETFs, and exchanges like Binance and OKX emerged. The growth was bolstered by the ICO boom and optimism about new technology, pushing Bitcoin's price over $19,000. 
• The third halving happened in mid-2020, with Bitcoin valued at $15,579. Shortly afterward, in 2021, the bull run began, marked by rapid developments in DeFi, a surge in NFT sales, an altcoin boom, and the integration of blockchain into supply chains. Fueled by renewed rumors of Bitcoin futures ETFs, the BTC price reached a new all-time high of $69,045. 

For the first time since the beginning of 2023, the Fear and Greed Index reached 70. The higher this gauge, the stronger the market's buying sentiment, driven by the belief that 'everything else is growing too!' Throughout most of 2023, the index hovered between 30 and 60, signaling a market with moderate appetites. Yet, in October, it surged to 70. Historically, such spikes often foreshadow a Bitcoin price correction, coming on the heels of its recent annual high at $34,864. 

• Remember, greed can be fatal. If the market has given you more than a 3x return, make sure to secure at least some of your profits. Stay grounded, and don’t hold out for a 100x gain. Reinvest a portion of your profits by experimenting with trading strategies, as this will increase your chances of earning more. 
• Trade on the spot market. Futures and derivatives are more suited for day trading than for long-term position accumulation. Trading on the spot market minimizes your risks as well as potential losses due to volatility. 
• Don’t open a position against the global trend. Before entering a trade, review the coin’s price chart on a weekly timeframe and verify the trend direction. For example, the crypto winter of 2022–2023 was a global trend during which there were sporadic bull rallies that wiped out high-risk short positions. During a bull market, correction phases can occur, and some projects may not gain sufficient momentum for growth. 

While this is a prevalent strategy, backtesting and statistical data suggest that if a coin has been in a downturn for over two-thirds of its entire existence, it might be best to avoid that particular project. To make this strategy work, search for coins with a market capitalization exceeding $1 million and a history of more than one year, having endured one or several bull rallies throughout their existence and maintaining a global positive trend above 10 degrees on the chart. If you find a project older than four years with a capitalization of $2-3 million, its team has likely overcome most startup challenges, increasing the chances of the project's growth. However, be cautious as even the age of a project can be misleading; some scam projects continue to operate without being isolated by the crypto ecosystem.  Certik provides an aggregator platform showcasing projects that have undergone smart contract and token code certification and audit. The platform, Skynet, is available to most users without the need for registration. Here, projects are displayed with one or more code audits, alongside results from independent evaluations. If the developers have either missed a vulnerability or attempted to hide something, it will be evident in the project’s profile on the site.

• As the case against Sam Bankman-Fried reveals new details about the FTX manipulations, it would be wise to pay attention to their top holdings. 
• Explore the portfolio of Winklevoss Capital, established by the Winklevoss twins. 
• Investigate the portfolios of Ethereum founder Vitalik Buterin and Justin Sun, and scrutinize the investment history of the Tron Foundation. Analyze how their holdings have transformed over time to evaluate the attractiveness of a project for investment.
  

• The price has decreased by 10% in comparison to the recent peak.
• There is a noticeable spike in trading activity across all currency pairs of the coin.
• There is a sharp increase in short positions for the coin, accompanied by increased trading activity. 
• RSI and MACD indicators are in the "overbought" zone, typically considered to be a level above 80 points.
• A fall in the price below the level of short-term Moving Averages (MAs) indicates the onset of a correction. 

Divide your coin purchase into parts and accumulate your long position gradually. This strategy helps mitigate risks associated with potential scams or significant market corrections. Gradual accumulation reduces financial exposure to unforeseen market volatility, enhancing your investment safety.