Be sure to do your own research and do not blindly follow others' opinions.
Author: Altcoin Sherpa
Translation: Deep Tide TechFlow
I originally planned to write this as a long tweet, but ultimately decided to organize it into an article to see if this format works better.
In the Coming Weeks:
(The following are some random thoughts without a specific order)
Your spot holdings may face significant drawdowns, and whether to hedge risks in advance is entirely up to you. This period may be very painful.
If you can hold on (hodl, the act of holding crypto assets long-term) through this painful period, I believe the next wave of increases will be very beneficial for some key coins, potentially even completely offsetting previous drawdowns.
The market is not "over," and I expect a new upward phase within the next 4-8 weeks. Reasons include Bitcoin's dominance (btc.d) being high, seasonal factors, Ethereum/Bitcoin (ethbtc) potentially rising, and market capital rotation. Additionally, the government's attitude towards cryptocurrencies is relatively positive, and there is less resistance in the macroeconomic environment, all of which theoretically create a good environment for the market.
In the next wave of increases, you need to gradually become a complete seller. If you choose to continue holding during the downturn, I can understand, but your subsequent 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, decrease position sizes, and exit the market gradually through Dollar Cost Averaging (DCA), rather than liquidating everything at once.
I do not have a clear prediction for the upcoming market rotation. From now on, I believe the market will mainly belong to traders rather than long-term holders (hodlers). This means that certain coins may attract a lot of buying, while others may rise slowly (for example, XRP compared to TIA).
It is 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 upward trend. What I mean is: ordinary AI coins will eventually see significant increases, but this may only be reflected in 1-2 coins (for example, TAO's increase may be very exaggerated, while AKT may only rise by 50%).
Do not stubbornly hold onto your coins to achieve unrealistic target prices. It is very likely that many coins will not reach their all-time highs (ATH) again. Of course, some mainstream coins may reach them, but a bull market does not mean that all coins will return to ATH levels. While anything is possible, I believe that 80% of coins (or even more) will struggle to achieve this. Following market trends and taking profits in a timely manner is the wise choice.
If your portfolio is very diversified, I recommend selling 50-75% or more of your holdings in the next wave of increases when the rotation ends. For example, when the AI sector rises, if you hold FET, you can choose to sell; or if you hold RWA (real-world asset tokenization) coins, take profits in a timely manner when ONDO performs well.
In the recent wave of increases, I have sold many coins 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 variety of holdings.
I am not sure when the next significant drawdown similar to the summer of 2024 will occur. I speculate that there are still 3-6 months left, and the market may become very bad and face another round of drawdown. As for whether this drawdown will be primarily driven by time factors rather than price factors like in 2022, I cannot yet determine.
This summer, altcoins experienced a 75% significant drawdown, mainly triggered by surrender sentiment due to price declines, rather than prolonged time leading to fluctuations. Although those 6 months seemed incredibly long for us, compared to the 1.5 years of sideways movement for altcoins in 2018-2019 and 2022-2023, this adjustment has actually been relatively quick.
The market may enter a so-called "super cycle," as some say "this time is different." But I remain cautious, so I will choose to act prudently.
My ideal goal is to control the drawdown of my portfolio from the all-time high (ATH) to a maximum of around 30%. I understand my risk tolerance; if the maximum drawdown reaches 50%, I can accept it, but 30-40% would be a more ideal range.
Your task is to continuously analyze data weekly and constantly reassess the market cycle's top and end points. When the market begins to turn, things can become very complex. Even when a bull market ends, many people will still be shouting "the bull market is still on." This situation is always difficult to predict, but you need to stay vigilant. Do not try to predict the distant future; accept market information and adjust your strategy based on actual conditions.
Finally, be sure to do your own research (DYOR), do not blindly follow others' opinions, and independently analyze and manage your own portfolio. Everyone's trading strategies are different; do not rely entirely on the exit strategies of your favorite KOLs. Some may perform well, but most may suffer significant losses. If you can exit the market with a considerable profit, you are already a winner. Good luck!
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