Bitcoin (BTC) price rose over 300% after reaching the bottom in March and came to the fore. Especially the BTC / USD parity, which saw over $ 16,000 again this week, continues to put salt in the wounds of altcoin investors. Although the altcoin rally expectation from investors has peaked since August, the expected increase similar to the expected 2017 has not come. So, what should investors pay attention to when this rally begins?
Estamina (@ estamina04), one of the experienced names of the crypto money ecosystem, warned investors against 10 dangers in her article she shared on her blog. So what are the possible altcoin rally traps and mistakes Estamina experienced at the end of 2017?
Do not invest in cryptocurrencies with loans or loans
In fact, this may be the rule not only for the altcoin rally, but for all cryptocurrency investments in general. It is a known fact that the crypto money market is very volatile. Investing in this sector with credit or loan money may therefore be much more risky than you think. Estamina recommends the following to investors in this regard:
“Do not get involved with loan money and credit. Especially in times when the dollar is at these levels, if you are going to get involved, regardless of your own money, if you are lost, at least your only problem is the money you lose, not the debt you pay. “
Says: Do your own research
This situation, also known as DYOR in the crypto money industry, actually aims to prevent investors from being fooled quickly. Altcoin projects “recommended” by well-known names during the bull period, that is, during the peak of FOMO, may act unexpectedly. Eminence or Hotdog projects are examples of this during the DeFi craze.
Estamina, who advised “Use the recommendations only to speed up your work in the research”, also stated that she was hurt by the above error.
Don’t be fooled by the pink world of Twitter
Another recommendation of the experienced investor is that the purchased altcoin project is not searched on Twitter and the hopes for it are not raised. Indeed, regardless of the project, there will be those who both disparage and praise it on social media. It may be in your best interest to minimize the impact of this on your investment decisions.
Look at the history of analysts, not the number of followers
Estamin, who uses the expression “Everybody becomes a technical analyst in the bull, is actually right in a way.” During the DeFi craze, almost every project had a record rise, causing too many “technical analysts” to appear suddenly. In the possible altcoin rally, it may be in the interest of investors to take into account not the analysts with a large number of followers, but the analysts who were not mistaken in their predictions in the previous months and especially during the decline known as the bear market.
Don’t get caught up in FOMO
The experienced name, who spoke to those with poor technical analysis knowledge, warned the crypto money industry about falling into the FOMO of other projects while the invested crypto money was counting. Estamina says “Greed is the biggest enemy in the bull” and implies that patience is the key. Setting a sell or stop target before investing can prevent this.
Never do all-in
One of the most common mistakes made in the bull era is “to print crypto money with what is and what you don’t”, in the words of all-in. Estamina, who put forward the VANTA project as an example, stated that the CEO lost all his money when he died in an unfortunate traffic accident. This shows that the portfolio should be divided into different cryptocurrencies and even different investment instruments.
Make regular follow-up habits
It can also help investors to identify projects that can be invested without any investment, and to follow their prices for a while through crypto money price applications such as Blockfolio. Although not as much as technical analysis data, it is possible to have information about resistance or support points. In addition, how BTC affects the market and which altcoin price has experienced sharp ups or downs can be followed here.
Don’t miss the pricing of the big news
It should not be forgotten that fundamental analysis is as important as technical analysis. Important developments of projects such as hard fork, transition to the main network or such can be followed on websites such as Coinmarketcal. Estamina, on the other hand, states that it is not the day of the development, but a few days ago, that is, when the pricing is completed, it earns more by selling the crypto money in its hand.
Attention to Uniswap and DeFi projects
DeFi projects, which were hit hard in September, started to come to life again. Estamina also emphasized that there will be too many fraud-focused projects on Uniswap during the altcoin rally. This is actually DYOR, which once again reveals the importance of doing your own research.
Withdraw your earnings and continue with your main money
The last recommendation of the experienced investor is to withdraw the remaining earnings from the increase achieved. In this way, while your main money is still remaining in our first investment, you may have minimized the amount of loss you will incur in a possible sharp fall. Of course, the stop order will also reduce the loss in this regard.