To stand a better chance of surviving or benefiting from the crypto winter, here are some of the best crypto winter investment strategies.
Dollar Cost Averaging (DCA) And Long-Term Holding.
Dollar Cost Averaging involves splitting up your capital and purchasing an asset gradually over time. While buying or selling, DCA enables investors to capture key price points and minimize losses or maximize profits depending on the price development. Due to the irregular price movement during crypto winter, DCAing is a good technique and offers several advantages in addition to capturing the different price points.
After DCAing, holding on to your investments for the long term is another viable strategy, however, the efficiency of this depends on the fundamentals of the project you DCAd into. If the is one of the reliable cryptos for the bear market, it will stay resilient during the crypto winter, it stands a high chance of growing impressively when the market recovers.
Gradual Taking Of Profits
During the crypto winter, crypto assets tend to experience perioding spikes in prices, usually, this is followed by a pullback. Considering the state of the market, it is recommended to set personal and realistic targets when the asset you invested in starts going up, when each target is reached, ensure to take profits according to factors that apply to you.
Day Trading
Day trading involves purchasing an asset and selling it within the 24hrs mark, this strategy enables traders to benefit from the periodic changes in the value of an asset. The crypto winter is known for fluctuations in the value of assets, by day trading during this period, investors stand a chance of avoiding significant losses and accumulating the asset as the market moves sideways.
Momentum Trading
The irregular movement of the general market during the crypto winter follows a loose pattern. Between the lows are periods where the asset gains significant momentum. A popular strategy to use in such cases is momentum trading, this can be done manually or using crypto trading bots. You can set up your trading systems to detect market momentum and trade accordingly.
Capital Preservation And Trading Without Emotion
Another winter-time investment strategy is capital preservation. This involves protecting your initial investments as you trade or accumulate an asset. To preserve capital during crypto winter, investors take profit that is equal to or close to the initial amount they invested and allow the remainder of their position to run with the market.
This strategy is primarily a risk management strategy and protects investors from significant losses. It is also advised to avoid trading with emotions and adhere to set targets. Preserve your capital where possible, regardless of the level of confidence you have in an asset.
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