Crypto
Seven good crypto resolutions for 2023
September 6, 2023
Investing and trading in crypto, especially for starters, is incredibly exciting and educational. But even though it can turn out to be very lucrative for some, by far most do not get rich within one year. Successful crypto investing requires study, self-knowledge, discipline, experience and patience. Crypto isn't called a"rabbit hole" for nothing. But don't get discouraged: with clear goals and perseverance, you can learn to understand the technology better and better. Which of the following good intentions will you make the most of your investment goals this year?
It sounds simple but is one of the biggest challenges of crypto trading: buy coins low and then sell them high. Well, but what is low? And when exactly does a coin's price reach a (temporary) peak?
Technical analysis is a popular tool that attempts to make price predictions based on the past. By applying technical analysis, you can gain insights about certain price levels that a currency's price might reach, for example. Investors who want to take advantage of the undulating price movements can find a foothold with an understanding of technical analysis and better recognize the different stages the market is in.
A well-known way to save your crypto together is the Dollar Cost Average (DCA) method. This is a strategy by which, by investing periodically, you are less affected by price volatility. By dividing the investment into smaller units over a period of time, the average price can be "smoothed out. This prevents you from picking an unfavorable time - in retrospect - to make a large purchase all at once.
With low market prices, saving crypto goes a lot faster than when the coins are high in value again. After all, you get more value for your money then. Convinced investors therefore do not mind at all when the prices of their favorite coins drop. They see this as the ultimate moment to buy some extra. Keeping some extra budget for "bargains" - if well timed - can work well in combination with a DCA strategy.
Even if you have made a plan, keeping yourself to it is not always easy and sometimes not possible due to circumstances. Exceptions aside, the longer you are in crypto, the better you learn to deal with panic feelings. It may sometimes be necessary to walk away from your screen or at least sit on your hands so you don't act thoughtlessly.
Investors who take a lot of risk or invest disproportionately in crypto are generally more prone to panic actions. Therefore, put together a well-considered portfolio and consider in advance when and in what way you will act when the price changes. As much as possible, stick to your own predetermined plans regarding buying and selling crypto. Greed and fear(fear & greed) are insidious emotions that can lead to impulsive decisions with painful consequences!
Remember which influencer promoted that promising coin whose price broke down less than a week later? And who was the one who correctly warned of an unfortunate outcome?
Social media are invaluable for gaining knowledge. But there's also a lot of nonsense out there. Start the new year with a cleaned-up list and only follow accounts that have proven themselves with quality content. Doubting the integrity of an influencer? Take a look at @zachxbt 's timeline on Twitter, for example. This crypto-detective has already unmasked many scammers and shitcoin shillers.
Crypto meetups are regularly organized in various places in the Netherlands. Since crypto takes place mainly online, it is extra nice to physically meet other investors . No matter if you are new or experienced, meetups gather passionate people of all levels and ages. You always come home a little wiser, with new perspectives that can come in handy when "orange pilling" people in your own community. Clearly explaining what crypto and blockchain technology mean takes quite a bit of practice!
At www.meetup.com you can check the agendas of meetups at home and abroad. Highly recommended is Arnhem Bitcoinstad. They regularly organize events and combine them with tours of the city center, for example, or a bitcoin pub quiz.
Saying goodbye to mispurchases can be quite difficult. Yet it can also be cathartic. Many smaller coins hyped during the bull market disappear off the radar during a bear market, simply because there is no more money to keep developing them. Saying goodbye to such projects is not always easy, because it means you will then have to sell your coins at a loss. If a project proves unable to rebound any more, it sometimes makes more sense to shift your focus to projects that continue to grow in the background, being adapted to rapidly changing market conditions and techniques. By no means all altcoins will match the value of the last all-time high again.
Do you ever get caught up in the cascades of news surrounding crypto? Or do you sometimes peer endlessly at the price of bitcoin, which only seems to be going sideways? Sometimes a helpful thing to do is to "reset" your mind so you can see all the happenings in the market in perspective again. There are handy tools for that, such as the image below, for example:
The Wall St. Cheat Sheet
The Wall Street Cheat Sheet depicts the emotions associated with the ups and downs of a market cycle. Most of us recognize these emotions by now and know what they can do to you! A periodic, introspective look at the Wall Street Cheat can keep you from making mistakes and gives peace of mind. What you feel is usually normal and belongs to the phase crypto is in at the time. According to many analysts, we are currently (Jan. 4, 2023) somewhere on the line between Anger (anger) and Depression (depression). How long these phases last cannot be read from the chart and varies by market cycle.
Bitcoin adoption curve (source: Blockware Solutions)
The Bitcoin adoption curve also deserves a printout on the wall. The percentage of the world's population owning crypto is still only around four percent, and that number is set to grow exponentially, according to many statistics. Compared to other network-based adoption curves that are now fully established, such as those for radio, the Internet, cell phones and social media, we are (still) very early!
Disclaimer: This article does not contain financial advice and is for educational purposes only. Investing is never without risk. Therefore, always do thorough research.
