Stay Calm in the Bull Market: How a Bitcoin Savings Plan Smoothens Your Investment Journey

By Ben Knight October 30, 2023 In Bitcoin, Bull Run
Image: Shutterstock
  • Bitcoin tends to perform the best during bearish market conditions, while altcoins often rule the market during uptrends.
  • Dollar-cost averaging is an excellent strategy for beginners because it allows them to avoid trading based on emotion and attempting to time the market.
  • Diversifying a portfolio, especially when investing in risky altcoins, is an excellent strategy for navigating a bull market.

Compared to a bear market, it can seem like navigating a crypto bull run is extremely easy. Many look around on social media and see their peers making money during such a trend and believe that profits are guaranteed. In reality, this mindset often results in a feeling of investment “immortality” which inevitably leads to losses regardless of the market conditions. Investors should apply the same fundamental principles in both a bear and bull market, just with some minor tweaks. Working toward a plan can help newcomers and experienced crypto investors avoid emotional trading and secure a low-risk portfolio with a long-term view in mind.

Dollar-Cost Average to Avoid Timing the Market

There’s an age-old saying that applies to basically all financial markets – time in the market, not timing the market. Timing the market – that is, peaking the peaks and troughs of a crypto’s price action – is extremely difficult. While fundamental and technical analysis can help veterans predict trend reversals as accurately as possible, it is far from a perfect science. 

This is why dollar-cost averaging (DCA) is a powerful strategy that should be applied no matter the market conditions. In fact, that’s the whole point of DCA – to build a portfolio regardless of an asset’s short-term price trends. By purchasing a set amount of a crypto at set intervals, investors will capitalise on bull runs while avoiding massive falls that can come with only investing during an uptrend. 

Admittedly, successfully timing the market is far more profitable than a DCA strategy. However, lump sum investments should generally only be attempted by experienced traders with risk mitigation strategies in place. 


Diversification is the name of the game

Most people associate bull runs with massive gains on altcoins, while Bitcoin’s peaks tend to be a little subdued. This can make riskier projects more appealing –however, it’s important to be careful when selecting altcoins to invest in. Never put all your eggs into one basket. For example, continuing to DCA Bitcoin while making well-researched investments into innovative altcoins can help avoid the massive ups and downs of the crypto market. 

In addition, stick to altcoins with good fundamentals. This is perhaps the most important element of navigating altcoins through a bull market. While meme coins can run up hundreds of percent based on social media hype, those without any long-term viability will almost always bleed money sooner rather than later. Usually, it’s the high net-worth investors that make a killing off such “pump and dump” coins, while inexperienced investors are left to languish with a relatively worthless asset. Factors like the project’s development team (and their experience), its real-world utility and supply/demand tokenomics are all things to consider for investors.

Ben Knight

Ben Knight

Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.

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